Boeing is reportedly trying to cut its losses by selling parts of its operations, including programs like its ailing Starliner space vehicle.
All eyes in the aviation industry remain on Boeing, with machinists at its aircraft manufacturing sites voting to continue their strike this week. But on the same day that vote took place, Boeing’s CEO Kelly Ortberg announced that the company was critically examining many of its operations.
The Boeing CEO said that he would like to see Boeing “doing less and doing it better”. And according to a Wall Street Journal report, Boeing started by looking to sell part of its space operations.
The company consists of three main branches. The one making airliners is Boeing Commercial Airplanes. Then there is Boeing Defense, Space and Security. The third branch is Boeing Global Services.
In practice, the split between the three groups is more complicated. Some activities and personnel are shared between them, including Boeing’s research operations. Some have suggested that Boeing could “do a GE” and split all three operations completely.
Boeing Space Programs – Not All Trouble!
But this could be hard to do and hold less promise than GE’s move. Boeing’s units do share more common ground than GE’s overly diverse units, which previously made everything from lightbulbs to hospital equipment and jet engines.
In Boeing’s case, Global Services (BGS) is probably the least… relevant branch to the other two. However, BGS has been profitable over the past few turbulent years, making its divestment hard to justify. The company’s defense branch includes other troublesome programs but would be difficult to divest, too.
However, it now appears that Boeing is taking a less radical approach. Boeing is only exploring the sale of some space programs, like its Starliner, whose performance this summer embarrassed the company and appears to have caused the dismissal of Boeing’s Defense and Space CEO. Boeing has suffered cost overruns of $1.8 billion on the Starliner program alone.
Boeing could also sell other space operations that relate to Starliner. However, the company doesn’t want to divest its operations relating to the Space Launch System (SLS). Boeing makes a number of components for the SLS program, which also includes parts from Lockheed Martin and Northrop Grumman.
Separately, Boeing also has a 50% share in United Launch Alliance (ULA), which has previously operated the Atlas and Delta family of space rockets, along with the newer Vulcan Centaur. Boeing has previously explored the sale of its share of ULA, with Lockheed Martin and Northrop being possible buyers.
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