Two major US defence companies are shedding 1,000 executives in a high-profile effort to slash costs as top Department of Defense officials raise pressure on suppliers to raise efficiency.
Only one day after Boeing's defence unit announced a plan to cut 400 executives and consolidate six divisions into four, Lockheed Martin announced on 8 September that 600 of its most senior managers had accepted a voluntary separation package.
Both companies expect the cutbacks to yield savings starting next year as "our customers have an urgent need for more affordable solutions", says Lockheed chief executive Robert Stevens.
Previously, Lockheed also announced plans to divest two business units - Enterprise Integration Group and Pacific Architects and Engineers - as it refocused on its core business.
In addition to slashing costs, Lockheed also expects that thinning the ranks of executives will help to advance the careers of younger employees. At the same time, however, Lockheed has disclosed that the overall payroll has declined by 10,000 workers over the past year.
Boeing also has announced plans to slash payroll beyond its 7 September statement that disclosed a 10% cut for executives. Since last year, the company has announced job cuts in Wichita and in southern California. Further cutbacks will be announced in the "coming months", Boeing says.
Meanwhile, Boeing also is restructuring the military aircraft sector, eliminating rotorcraft as a standalone unit and merging the unmanned systems and missiles groups into a single division.
The four new divisions will support the business unit's "progression from a product-based business to a capabilities-based business", BMA president Chris Chadwick says. "It is consistent with initiatives under way throughout the entire Boeing defence business that will allow us to remain competitive and grow."
Shelley Lavender has been appointed head of the Global Strike division, which adds attack helicopters to the company's fighter business. Jean Chamberlin will lead the mobility business unit, with cargo helicopters added to airlift and tanker products. Bob Feldmann will assume control of the surveillance and engagement division. Meanwhile, Debbie Rub will take charge of the consolidated missiles and unmanned airborne systems divisions.
Phil Dunford, formerly head of rotorcraft systems, will assume the new role of "operating executive" on the BMA leadership team, with a portfolio including engineering, supplier management and production operations.
Source: Flight International
