Leadership Message Staying ahead of change Why market-based affordability is important to BDS—and Boeing Bob Verbeck Vice president and chief financial officer, Boeing Defense, Space & Security Iwill come a period of change in the aero- spending alone over the next nine years, with develop our team, such as boosting theand development, and capital investments.In addition, we are investing in ways totion under the Budget Control Act of 2011will cut nearly $500 billion in U.S. defenset’s no secret that fundamental change isunder way around the globe, and with it space industry. The headlines trumpet daily sequestration—or cuts—of nearly $55 bil- effectiveness of first-line managers and the scope of challenges facing us: federal lion between January and October 2013. rewarding high-performing employees. discretionary and national security spend- These spending reductions are layered It’s critical that we stay ahead of the ing cuts, an evolving global security threat, on the $500 billion in Pentagon budget cuts challenges so we can continue to invest in a halting economic recovery in the U.S. already mandated by the Budget Control our future. Our market-based affordability and a persistent financial crisis in Europe. Act. We thus face the possibility of nearly initiatives will make us more competitive These external challenges are creating a $1 trillion reduction in defense spending now while paving the way for technology a new normal—one that includes smaller over the next 10 years in addition to other investments so new defense products will federal budgets, tougher government cus- potential discretionary budget cuts to NASA, be ready when the market recovers. tomer requirements and even greater public This focus on competitive affordability scrutiny of all our programs and services— “It’s critical that has already helped Boeing win key pro- and our task at Boeing Defense, Space & grams such as the KC-46A Tanker, the we stay ahead of Security is to adapt to these new realities. company’s first international cybersecurity Among our most significant challenges the challenges so contract and a four-satellite order from is to reduce costs so Boeing becomes the Asia Broadcast Satellite and Satélites best price bidder for business we target. we can continue Mexicanos for the recently introduced The good news is that we have a solid 702SP satellite platform. to invest in our start on evolving the business. We anticipated As we approach Boeing’s 100th many of the changes accompanying tighter future.” anniversary in 2016, we must commit to budgets and are working to shape the future doing business better than ever. All of us rather than merely react to the change. the Department of Homeland Security at Boeing have to focus on delivering our BDS’ market-based affordability initiative and the Federal Aviation Administration, products on time and on schedule and work is the key going forward to providing crucial among others. with our customers to deliver solutions that defense capabilities for our customers at We have been making the changes meet their requirements. This will create competitive prices. The initiative is about necessary to compete and grow in this future opportunities for employees and doing business better by listening to the cus- environment. Throughout BDS, we continue long-term performance and growth for our tomer’s specific requirements, understanding to simplify the business as we streamline shareholders, our supply chain partners and how the market values our products and and reduce costs in all our operations so the communities where we live and work. n services, and putting specific financial targets we can deliver the same or better quality PHOTO: BOB FERGUSON/BOEING in place to win the business. at a lower cost to the warfighter. Why is this important to Boeing employ- Where we have good financial perfor- ees? All federal spending is under severe mance, we are not only reducing costs downward pressure. For example, unless to customers but also investing back Congress and the president act before into the business by adding to new Jan. 2, the second phase of deficit reduc- business funds, independent research BOEING FRONTIERS / NOVEMBER 2012 7
Frontiers November 2012 Issue
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