Boeing has put its chief financial officer in charge of a newly formed group called Enterprise Operations, Finance & Strategy, as part of a reorganization aimed at streamlining the company’s top leadership and preparing for what Boeing calls “the post-pandemic industry footprint.”
CFO Greg Smith will lead the Enterprise Operations group as executive vice president, effective May 1, Boeing said Tuesday in a news release. The group brings together teams responsible for manufacturing, supply chain and operations, finance, enterprise performance, strategy, enterprise services and administration.
Smith’s portfolio includes Boeing HorizonX, which has invested millions of dollars in startups relevant to Boeing’s aerospace aspirations. He served as Boeing’s interim CEO for three weeks at the turn of the year, between Dennis Muilenburg’s resignation and David Calhoun’s assumption of his roles as CEO and president.
One of the group’s top agenda items will be to “restore production and supply chain health as Boeing and the broader aerospace industry recover from the COVID-19 pandemic,” Boeing said.
Jenette Ramos, senior vice president of manufacturing, supply chain and operations, will take on a special assignment in support of Smith and Calhoun.
Corporate Audit will join the new group and continue to report directly to the Boeing board of directors’ Audit Committee.
The company is also combining its legal and core compliance programs into a single organization led by Brett Gerry, chief legal officer and executive vice president of global compliance. Boeing says it will soon name a chief compliance officer who will be responsible for leading compliance, ethics and trade control activities.
Boeing Government Operations, led by executive vice president Tim Keating, will assume responsibility for the company’s global radio-frequency spectrum management activities.
“I am confident these changes will drive greater alignment among our functions; better equip our commercial, defense and space, and services businesses to deliver on customer commitments in a changing marketplace; and support our continuous efforts to develop talent through challenging leadership assignments,” Calhoun said in Tuesday’s announcement.
Coincident with the organizational changes, Diana Sands, senior vice president of the Office of Internal Governance and Administration, will retire from Boeing later this year after nearly 20 years with the company.
Boeing is facing a wave of change that’s arguably as big as anything it’s faced in the 104 years of its existence. That wave includes recovering from the effects of a 95 percent drop in air traffic brought on by the coronavirus outbreak, including a weeks-long shutdown of airplane production amid workplace safety concerns.
Employees in the Puget Sound area began returning to work on the assembly lines for commercial aircraft just this week.
In a letter distributed to employees earlier this month, Calhoun said “it will take time for the aerospace industry to recover from the crisis.”
“When the world emerges from the pandemic, the size of the commercial market and the types of products and services our customers want and need will likely be different. We will need to balance the supply and demand accordingly as the industry goes through the recovery process for years to come,” he said. “It’s important we start adjusting to our new reality now.”
Part of the adjustment involves a voluntary layoff program, and the potential for further layoffs if not enough employees take Boeing’s buyouts.
As if that weren’t enough, Boeing is also more than a year into the worldwide grounding of its 737 MAX passenger jets, sparked by safety concerns in the wake of two catastrophic crashes. The company has developed fixes for the MAX onboard software, and is working toward getting the planes recertified and flying again later this year.
Due to the effects of the COVID-19 pandemic and the 737 MAX groundings, Boeing’s flow of net airplane orders has slumped to less than zero for the year to date.
The outlook is better on the defense and space side of Boeing’s business, thanks to positive developments relating to the P-8A Poseidon and KC-46 military airplane programs. But the company has a long road ahead for further testing of its CST-100 Starliner space taxi, which flew a flawed demonstration mission last December.
Boeing hasn’t yet announced exactly what sort of pandemic-related assistance it would seek from the federal government, although it said it expected to need $60 billion in access to public and private financial liquidity. Last week, The Washington Post quoted an unnamed Boeing official as saying “we’re trying to figure out what the process and the protocol will look like with Treasury, and what will be the best way to approach it.”
