Boeing said Wednesday it will continue to shrink its defense business by reducing the number of managers and facilities and consolidating business units to cut another $1.6 billion in costs in the next three years.
The shake-up in Boeing’s defense division is an acceleration of a cost-cutting and restructuring process that has been going on for two years in response to reduced U.S. spending on new military and space programs.
Boeing’s ongoing cost cuts must continue even if the threat of budget sequestration is averted by the new Congress, Boeing spokesman Todd Blecher said. “No matter what happens to the defense budget, the trend line is flat to down," he said.
In a memo to defense-side employees Wednesday, Dennis Muilenburg, chief executive of the St. Louis-based Boeing Defense, Space & Security, or BDS, division, said the cost-cutting program has saved $2.2 billion over the past two years.
For the next $1.6 billion cost-reduction phase, the company is “putting everything in our business under a microscope," Muilenburg wrote.