LONDON — The new head of Boeing’s defense unit said the company has learned lessons from contracts on programs such as the new Air Force One and will take different approaches to contracting in the future.
In a roundtable with reporters in London on July 17, Boeing Defense, Space and Security Chief Executive Officer Ted Colbert said the company will make decisions on contract vehicles on a case-by-case basis, and go with what it feels is the best approach.
“We have learned a ton of lessons, especially around contracting,” Colbert said. “And we will use those to inform our way going forward. If we learned something that didn’t work out this way, we’ll take a different approach going forward.”
In April, Boeing Co. CEO Dave Calhoun expressed regret for the company’s decision in 2018 to accept the Trump administration’s terms on the VC-25B Air Force One program. In its most recent quarter, Boeing recorded a $660 million charge on the Air Force One program from schedule delays, rising supply expenses and higher costs to finalize technical requirements. Calhoun said that deal represented “a very unique set of risks that Boeing probably shouldn’t have taken.”
On Sunday, Colbert said he wants Boeing to look forward to finishing the Air Force One aircraft, and said the employees who work on that program make up “one of the proudest teams in the whole company.”
Boeing has made changes to the Air Force One program and is focused on delivering the airplanes by 2027, he said. The new schedule for, which slipped from the original goal of delivery in 2024, takes lessons on supply chains, talent and facilities into account, Colbert said.
“With all these long cycle programs, you learn lessons along the way, and you adapt as you learn those lessons,” hesaid.
The unexpected severity of the COVID-19 pandemic prompted Boeing to rethink how it manages supply chains of crucial components such as microelectronics, and make greater use of digital data sharing to better plan for future supply needs, company officials said Sunday.
Boeing Global Services chief CEO Stephanie Pope said the company had to change how it plans in advance for the demand and stocking of the parts it relies upon to build its systems.
“The way we provisioned and purchased three years ago is very different than how we do it today,” she said. “That doesn’t minimize the risk, but it allows us to manage the risk differently.”
In the past, Pope said that Boeing used historical long-term trends to plan for what parts and other supplies it would need. COVID showed that no longer works, she said. Instead, the company is taking advantage of new digital tools to identify what components it must plan to have on hand in the future, so it can build what its military and other customers will need to have in coming years.
“In addition to COVID, the macro environment has been so dynamic,” Pope said. “We’ve done a lot of partnership with our customers, where we’re [digitally] sharing data back and forth, and looking at how we fly, where we fly, where we see the threats, and the missions evolving and making sure that we’re getting ahead of that.”
Boeing has been working with microelectronics suppliers throughout the pandemic to ensure it has enough components to keep working, Defense CEO Colbert said. That has included maintaining safety stocks of microelectronics, or stores of extra components that would allow it to weather a supply chain shortfall.
Colbert said Boeing has also kept a close eye on the availability of microelectronics and the status of their production process – and sought to manage the expectations of customers about the potential for supply chain snarls. The company is continuing to invest in and keep talking to its suppliers and, to make sure they are able to maintain their staffing levels where its most necessary, he said.
Stephen Losey is the air warfare reporter for Defense News. He previously covered leadership and personnel issues at Air Force Times, and the Pentagon, special operations and air warfare at Military.com. He has traveled to the Middle East to cover U.S. Air Force operations.
