Boeing's winning bids on the MQ-25 unmanned tanker and T-X trainer programs, among others, were the result of significant changes in both the defense organization and its engineering and manufacturing processes, rather than simply low-price bids, according to the head of Boeing's defense business.
In a wide-ranging interview with Inside Defense last week at the company's Arlington, VA, office, Leanne Caret addressed concerns about how Boeing managed to land the programs. Last year, Marillyn Hewson, Lockheed's chief executive, said that if her company had won the three major programs it lost in the months prior -- likely MQ-25, the Huey helicopter replacement and T-X -- it would have lost more than $5 billion.
Caret declined to directly address Hewson's statement, but said there is a tagline that Boeing "bought in" to the programs.
"It's not the right narrative, but it's an easy narrative," she said. "It's really critical that folks recognize that we don't bid on programs to not deliver."
"What we spent our time and efforts doing is we were really retooling the organization," Caret added. "We were also looking at how we were investing and what we were investing in, and we centered around how we were doing our engineering and how we were doing our manufacturing."
She told Inside Defense the company has been able to significantly improve its manufacturing, calling it model-based engineering for the entire life cycle of a weapon system.
"We changed how do we do our manufacturing processes to make it to where the assembly is not an artisan event, and we tied in the entire aftermarket," she said. "That's the approach we took on MQ; that's the approach we took on T-X."
"Had we 'just bought in,' the write-offs people would've seen would have been -- I'm not even sure how to describe it," she said.
Last year, Boeing said it recorded in its defense unit "$691 million of charges related to planned investments in the T-X and MQ-25 programs."
"No one's going to say I didn't invest," Caret said. "What I'm saying is that we invested smartly because of what these programs are, but where we really invested is in the years preceding these."
She also said Boeing is applying its new approach to existing programs, such as its F/A-18 and F-15 programs. "This is part of how we believe there are ways to insert this new way of thinking, this new technology to advance even those programs that have been around for a period of time," she said.
Caret also pointed to organizational changes made in the defense group since she took the reins in 2016.
At the time, she said Boeing's defense group sought feedback from its customers. "What we heard back is that we are bureaucratic and that we were arrogant," she said. "When you hear those two things, you can either deny it or you can do something about it, and we chose to do something about it.
"That's when we flattened the organization, we did a very extensive site consolidation," Caret continued. "And then I moved the headquarters here to Washington, DC."
The final step of that reorganization came last year, she said, when Boeing created two new divisions and eliminated its development organization.
The intent is to ensure the organization is focused on its customer, according to Caret.
"What we found is that development crossed every one of our markets, and we had built some great processes," she said. But "we were losing the connectivity to the customer across the entire value stream."