Considering setbacks in its defense projects, Boeing replaces its defense and space unit development president
As part of its restructuring plan, Boeing Co. (NYSE:BA) recently announced another change in its executive management. According to the current news, president of company’s defense unit development, James O’Neill, will retire and will be replaced by Patrick Goggin as early as next month.
The company remains confident that the current change in management will support the manufacturer’s growth in future. Furthermore, the company was also of the opinion that Mr. Goggin will further develop the unit on the foundation laid by Mr. O’Neill.
Boeing’s defense unit’s development group takes cares of the pre-production phases of major space and defense programs. Analysts related to the industry believe that the recent setbacks in the company’s space and defense programs might have forced it to change the unit’s head.
Mr. O’Neill was selected as president of Boeing’s Defense, Space & Security Development unit earlier last year who joined the company back in 1982 as F/A-18 Hornet program’s structural engineer. However, as the aircraft manufacturer is starting to take in charges against delays of its military projects, the management is coming under great pressure.
Earlier last month, Boeing reported that it is expected to take charge against delays in its space taxi program along with charges related to its military tanker project based on design issues. The aircraft manufacturer also reported that based on some technical and supplier issues, its CST-100 Starliner Capsule program will be pushed back till mid of fiscal year 2018 (FY18).
Based on tough market competition, Boeing cannot afford any further delays in its defense projects. The heavy industry player also reported additional charges in its second quarter of fiscal 2016 (2QFY16) earnings that affected its bottom figures. Similarly, investors are also worried that if the company reports any more additional charges by the end of this year, its net earnings would be further affected.
In addition to this, with Donald Trump being elected as the new US president, analysts related to the industry expect increase in military spending in the near future. In other words, Boeing will need to cope up with delivery schedule in order to receive new orders—when announced—by the new government.