{"id":44159,"date":"2020-08-17T08:33:00","date_gmt":"2020-08-17T08:33:00","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2020\/08\/17\/ceo-of-boeings-defense-wing-talks-stumbling-blocks-from-kc-46-to-covid\/"},"modified":"2026-08-07T23:41:05","modified_gmt":"2026-08-07T23:41:05","slug":"ceo-of-boeings-defense-wing-talks-stumbling-blocks-from-kc-46-to-covid","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/top-100\/2020\/08\/17\/ceo-of-boeings-defense-wing-talks-stumbling-blocks-from-kc-46-to-covid\/","title":{"rendered":"CEO of Boeing\u2019s defense wing talks stumbling blocks, from KC-46 to COVID"},"content":{"rendered":"\n

WASHINGTON \u2014 When Boeing Defense, Space and Security CEO Leanne Caret dials into our hourlong interview on Aug. 4, she comes prepared with 15 minutes worth of opening statements that include thoughts ranging from the company\u2019s performance during the coronavirus pandemic to the state of the KC-46 tanker program<\/a>.<\/p>\n\n\n\n

She knows she has a lot to cover, and a lot to answer for.<\/p>\n\n\n\n

Caret stepped into the top Boeing defense job in 2016, after the American company lost a lucrative contract for the U.S. Air Force\u2019s next-generation bomber. Questions about Boeing\u2019s future as a producer of fighter jets \u2014 and the prominence of its defense business \u2014 lingered as the end of the F-15 and F\/A-18 production lines loomed in the near future.<\/p>\n\n\n\n

Now the tables have turned. With COVID-19 devastating the travel industry and eradicating near-term sales opportunities for commercial airliners, Boeing\u2019s defense sector finds itself as the company\u2019s model pupil.<\/p>\n\n\n\n

\u201cOne of the questions that I get a lot is, how has that changed the expectations for me and for our defense and space business?\u201d Caret told Defense News. \u201cAnd I wanted to just anticipate the question and share that, you know, as I see it, the company\u2019s expectations of our business are the same as always. We need to perform consistently, and we need to perform well. And while our progress may be viewed through a different lens for a period of time, the expectations of how we do our job and what we deliver haven\u2019t really changed.\u201d<\/p>\n\n\n\n

Under Caret\u2019s leadership, Boeing has logged a number of major wins, including contracts for the T-7A trainer jet and the Grey Wolf helicopter<\/a> for the Air Force, as well as the Navy\u2019s MQ-25 drone. New orders for a block upgrade of the Super Hornet aircraft resuscitated that production line, and in July the company got its first order for the Air Force\u2019s F-15EX jet.<\/a><\/p>\n\n\n\n

\u201cI mean, how many people a few years ago would have placed a bet that we\u2019d be building new F-15s? I say, few to none,\u201d she said.<\/p>\n\n\n\n

But amid this progress, the company has met stumbling blocks. Most prominently, the KC-46 has been hampered by a list of technical issues, including foreign object debris found in the jets and a dispute with the Air Force over the camera system that allows the boom operator to refuel other aircraft. A deal on a fix for the latter problem was agreed to in April <\/a>after more than a year of negotiations.<\/p>\n\n\n\n

\u201cI think we\u2019ve turned the corner. I really do,\u201d Caret said. \u201cWhat I want you to know from me is I want every KC-46 delivered to be perfect. We\u2019re not there yet. But we\u2019re aligned with the Air Force, and our road map is sound.\u201d<\/p>\n\n\n\n

This interview with Caret was edited for length and clarity.<\/p>\n\n\n\n

The COVID-19 pandemic is still ongoing, and there could be a second wave approaching. With that in mind, what is the health of Boeing\u2019s defense business? Where are you seeing challenges?<\/b><\/p>\n\n\n\n

It\u2019s not unique to Boeing, but our workforce \u2014 think about this \u2014 they have masks on, safety glasses, bump caps, vests, gloves, 6-feet proximity. This environment that they\u2019re working in, it\u2019s just hard. We are still right in the middle of the pandemic. You\u2019ll see states that have different protocols. From a Boeing Company position, our goal is to make certain that our employees are safest at work.<\/p>\n\n\n\n

Click here to see the Defense News Top 100 list.<\/b><\/a><\/p>\n\n\n\n

One of our biggest lessons learned is the quick benefit you can have from minimizing contact and quarantining. So when a case is identified, we do an entire trace of where the individual has been so that we can quarantine those who are potentially at risk, and then also make certain that they have the ability to go get the testing.<\/p>\n\n\n\n

Every employee, we\u2019ve made sure they have thermometers and masks as we continue to bring folks back in. We\u2019re making certain that we have lots of really great cleaning details, and folks just focused on easing the anxiousness of our teams because day in day out this is really hard. As you talk about the fall and the worry about the flu \u2014 we don\u2019t have a vaccine yet for COVID, and then you are dealing with the compounding effects of schools not being in session. We have not had a respite from this.<\/p>\n\n\n\n

\"\"
The 22nd Air Refueling Wing’s newest KC-46A Pegasus lands, Dec. 20, 2019, at McConnell Air Force Base, Kan. (Airman 1st Class Alexi Bosarge\/U.S. Air Force)<\/figcaption><\/figure>\n\n\n\n

How is the health of your second-tier suppliers and below that? Are you concerned there could be delays in getting parts, components or subsystems that Boeing needs as we head into the fall?<\/b><\/p>\n\n\n\n

We\u2019ve already seen delays. Think about what we went through in both Mexico and India. We have suppliers in both of those countries. And again, this is not unique to Boeing. As they were going through their shutdowns and their quarantines, it impacted, many times, their production rates. And so that is where we have really a great cross-sharing of information occurring.<\/b><\/p>\n\n\n\n

One big focus for us has been making sure we\u2019ve been aggressive in making certain that they have cash flow, they have liquidity. We\u2019ve actually hosted events with the Small Business Administration for our supply base. On one level, it\u2019s making certain that we help them get what they need.<\/p>\n\n\n\n

We also adjust how we do business so it makes it more efficient. A great example of that is how we\u2019re doing virtual inspections now. We have teams go out and inspect parts and do different things like that. We now do them with videos and cameras so that we don\u2019t slow the supply base down. Anywhere where we can do advances and allow our supply base to do advanced delivery, we\u2019re doing that as well.<\/p>\n\n\n\n

What\u2019s been the impact of <\/b>pauses<\/b><\/a> at your defense production lines in Puget Sound, Washington, and Philadelphia, Pennsylvania? Will Boeing be able to deliver all of the military aircraft that was the books for 2020?<\/b><\/p>\n\n\n\n

So for instance, with the Army, we actually did slow down the pace of Apache [attack helicopter] final assembly due to some supply chain impacts resulting from COVID. And most of those came from our efforts with our JV [joint venture] with [Indian defense company] Tata. But there is some realism in what you\u2019re talking about.<\/p>\n\n\n\n

Now, I\u2019m not seeing drastic changes at this point. But to your earlier point, we haven\u2019t gotten to the fall yet. So we\u2019re all being very pragmatic. We\u2019re being very cognizant of prioritizing what our customers need and making certain that we can support them. And then we just assess it on a case-by-case basis. And I\u2019ll defer to the services to let them publish any changes that have been agreed to or not.<\/p>\n\n\n\n

Is the worst over for Boeing\u2019s defense business, or is there concern that a second wave of COVID-19 could cause a more dramatic impact?<\/b><\/p>\n\n\n\n

I mean, let\u2019s be honest: If nothing else, we know the flu always hits hard in the fall\/early winter time frame. So there\u2019s a compounding effect there. And so we are planning for another resurgence, but we have the benefit of what we\u2019ve already been through, and a disciplined approach for how we manage it. That\u2019s really going to aid us. I\u2019m not going to predict, other than to say we are better positioned now to handle a resurgence than we were when the thing first started.<\/p>\n\n\n\n

Under your leadership, there was a realigning of some of Boeing\u2019s business divisions involved in the defense sector. But given that the operating environment has changed, do you anticipate more restructuring or changes in leadership?<\/b><\/p>\n\n\n\n

I think any good leader always looks at: Do you have the right structure for the business environment and for the market? And we made some very specific decisions when I first came into this role about flattening the organization, taking out layers, reducing. We were extremely top heavy. We eliminated a lot of that. I feel very comfortable. I\u2019m not predicting anything significant.<\/p>\n\n\n\n

\"\"
A worker leaves the Boeing plant where the 737 Max airplanes are assembled, on April 21, 2020, shortly after it reopened, in Renton, Wash. Small aerospace and defense firms that supply primes like Boeing are feeling a cash crush related to the COVID-19 pandemic. (Stephen Brashear\/Getty Images)<\/figcaption><\/figure>\n\n\n\n

Do you expect an impact on foreign military sales because of the global economic downturn or because countries are trimming defense spending?<\/b><\/p>\n\n\n\n

Absolutely. The industry is already seeing that nations have been affected by spending on COVID similar to the U.S., and they\u2019re having to go look at their timelines.<\/p>\n\n\n\n

We have not seen any cancellations. But we have seen some acquisitions and some contracts pushed to the right. Now, you also know that many of our international deals take \u2014 you know, they\u2019re years in the making anyways. But I think it\u2019s only pragmatic for us to look at it through the lens that they\u2019re going to face the same pressures the U.S. does in terms of spending decisions. And so that\u2019s why we really need to be flexible and we need to be innovative.<\/p>\n\n\n\n

Over the past few years, Boeing has bid very aggressively on a number of defense programs like MQ-25 and T-X. Considering <\/b>Boeing\u2019s commercial business now faces a number of financial challenges<\/b><\/a>, was that a bad move? What sort of impact will that have on Boeing as a whole over the next couple years? Will Boeing continue to employ the same bidding strategy?<\/b><\/p>\n\n\n\n

I actually remain very confident in the investments we made on both the MQ-25 and the T-7. There was a lot of commentary back at that time about how much we invested. We had already redesigned, reimagined, how are we going to use advanced modeling and simulation and digital twins. And so those investments, in terms of how we design and build, I think have paid off not only for those programs you mentioned, but for the F-15EX for the air power teaming system and for everything that follows.<\/p>\n\n\n\n

It wasn\u2019t just about the bid. We evolved ourselves in terms of how we did the work, not just the offering. And that was really the true differentiator. I think that enabled us to win. Going forward, I think you will see \u2014 as we\u2019re delivering these aircraft and additional orders come in \u2014 that it was exactly the right thing to do.<\/p>\n\n\n\n

\"\"
Air Force Chief of Staff Gen. Dave Goldfein sits inside the cockpit of Boeing’s T-X training jet during a Jan. 15 visit to the company’s production facility in St. Louis. (Boeing)<\/figcaption><\/figure>\n\n\n\n

So the investments Boeing made in advanced manufacturing processes and digital engineering make you confident these programs won\u2019t be a repeat of the KC-46 program?<\/b><\/p>\n\n\n\n

It is my goal to never have a repeat of tanker, and that was the headset that I\u2019ve gone into with pretty much every decision that we make. It started with how we design and how we build, to your point, and how we sustain over the long term. We had to go prove out those advanced technologies, and we spend our investment dollars wisely to be ready to go pursue this. So these are not the same; these programs aren\u2019t even in the same ballpark.<\/p>\n\n\n\n

With flight testing ongoing for an interim version of the KC-46\u2032s remote vision system, called RVS 1.5, when do you expect the Air Force to make a decision on adopting that?<\/b><\/p>\n\n\n\n

We\u2019re still waiting for that. They participate in the flight testing. As a matter of fact, we had [then-Chief of Staff of the Air Force] Gen. [Dave] Goldfein out in Seattle. He was with me just a couple of weeks ago.<\/p>\n\n\n\n

We\u2019re getting real pleased with the feedback. I think you\u2019ve heard [Air Force acquisition executive] Dr. [Will] Roper\u2019s comments about it, and [he\u2019s] really pleased with the path that we\u2019re on. But that\u2019ll be an Air Force decision, and so I will defer to them on that.<\/p>\n\n\n\n

The Air Force will award a Ground Based Strategic Deterrent contract <\/b>in August<\/b><\/a>, and Boeing did not bid because of complaints with how the competition was run. Is Boeing still looking at its legal options? Is it considering a protest?<\/b><\/p>\n\n\n\n

We made the decision to not bid<\/a> on GBSD due to what I was concerned about <\/a>with the process, and I\u2019ll just leave it at that.<\/p>\n\n\n\n

What do you see as the sales potential for F-15EX?<\/b><\/p>\n\n\n\n

We are already getting inquiries. We’re very excited, and they are nations that you would not be surprised about.<\/p>\n\n\n\n

Are you satisfied that the Navy is committed to MQ-25? What kind of future do you see for that program?<\/b><\/p>\n\n\n\n

We\u2019re absolutely thrilled with the partnership with the U.S. Navy. And you probably saw that in April they increased the quantity to a total of seven. So we\u2019re well on track to what we were working with in our assumptions when we bid on the program.<\/p>\n\n\n\n

We have completed nearly 30 flight hours to date, and what [Assistant Secretary of the Navy for Research, Development and Acquisition James] Geurts saw while he was out there [at MidAmerica St. Louis Airport in St. Clair County, Illinois], was the aerial refueling store already mounted under the wing of the aircraft. As as we get back into flight testing later this year, we\u2019ll be able to collect more performance data.<\/p>\n","protected":false},"excerpt":{"rendered":"

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