Boeing Defense CEO Weighs Spending More Time in DC

Leanne Caret, the president and chief executive officer of Boeing Defense, Space & Security, is thinking about spending more time in Washington, D.C., to increase her face time with federal decision makers.

Company leaders are now weighing whether Caret should keep regular office hours in D.C. or just visit more often for meetings with Pentagon officials, lawmakers, and their staffs, those familiar with the discussions say. This would cut down on the back-and-forth between Washington, where she has an office inside the company’s new Crystal City complex near the Pentagon, and her full-time office at the company’s defense headquarters in St. Louis. It also fits more with Caret’s face-to-face management style.

More D.C. time might allow Caret and her deputies to get to know some of the more than 200 new appointees who will set up shop at the Pentagon after president-elect Donald Trump takes office in January. But the Boeing sources said the options have been under discussion for several months — since before the presidential election — and no decision has been made.

The discussions follow several other recent leadership and organizational changes to Boeing’s defense and commercial airplanes businesses. The company’s year started with a shake-up in the defense ranks not long after the company lost an $80 billion contract to Northrop Grumman to build stealth bombers for the U.S. Air Force. In February, Caret replaced Chris Chadwick as the head of Boeing defense.

This week, another major shift. The firm said Ray Conner, the head of its commercial airplanes business would be replaced by General Electric executive Kevin McAllister. It’s the first time Boeing has tapped someone from outside of its ranks to lead its jetliner manufacturing business, according to the Seattle Times.

Boeing also said it would stand up a “Global Services” division, to support its defense and commercial products. Separate support divisions currently exist within the defense and commercial businesses. The new unit — which will be headquartered in Dallas — is supposed to be stood up by the third quarter of 2017.

Dennis Muilenburg, Boeing’s chairman, president and CEO, hopes the new division will boost the company’s services revenue from $15 billion now to $50 billion over the next decade, The Seattle Times reports.

“Since there is no way of knowing whether the recent softening in commercial-transport orders will be brief or prolonged, it makes sense to generate as much value as possible from the planes that Boeing already has delivered or soon will,” defense consultant Loren Thompson of the Lexington Institute writes in Forbes.

Before being named the head of Boeing’s defense business, Caret led the company’s defense services business, which she touted during a broad-ranging interview at July’s Farnborough Air Show in England.

“One of the things you’ll always see me talk about is it’s more than just the instant acquisition of the aircraft,” Caret said. “When you look at total life cycle cost, 30 percent is spent upfront on acquiring the asset. Seventy percent of the customers’ money will be spent over their lifecycle.”