Boeing renames, consolidates defense unit

In a statement, the plane maker said its defense business, formerly called Integrated Defense Systems, had been renamed as BOEING (BA.NY)Defense, Space & Security.

Boeing said the renamed business would retain its current operating units: Boeing Military Aircraft, Network and Space Systems, and Global Services and Support. But within the Network and Space Systems unit, the Combat Systems and the Command, Control and Communications Networks divisions would be combined into a new Network and Tactical Systems division.

Dennis Muilenburg, who was named president of the defense unit last year when Jim Albaugh was named to head Boeing's commercial airplanes segment, said the revamp would help position the company to grow in new and adjacent markets in defense and space.

"It's Dennis Muilenburg putting his imprint on the organization," said defense analyst Loren Thompson of the Virginia-based Lexington Institute.

Boeing said there are no planned job reductions as a result of the announcement.

Many defense companies are fine-turning their operations in efforts to compete better for contracts as U.S. spending on defense is expected to slow. This week, ITT Corp said it would reorganize its defense operations and reduce its structure to three units from seven. Industry leader Lockheed Martin Corp also said a previously announced overhaul of its electronic systems business could result in the loss of about 1,200 jobs.

Additionally, Northrop Grumman this week said it would move its corporate office to the Washington, D.C., area by 2011 from Los Angeles to be closer to its key customers.

Boeing's defense unit was hit by budget cuts announced by the Pentagon in 2009. The department called for cancellation of the ground vehicle portion for the Army's Future Combat Systems modernization program as well as capping production of Lockheed's F-22 Raptor fighter, one-third of which is built by Boeing.

(Reporting by Karen Jacobs in Atlanta, additional reporting by Andrea Shalal-Esa in Washington; Editing by Phil Berlowitz)

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