Boeing eyes energy sector amid defense cuts

billion will support manufacturing, purchasing and installing equipment, the department said in June.

Lockheed Martin Corp., the world’s largest defense company, also is bidding for the smart-grid projects. In August it partnered with Overland, Kansas-based engineering firm Black & Veatch for the department’s program to improve the grid’s efficiency and reliability and protect it from cyber attacks, Lockheed said in a statement.

The extra business would be a boost to Chicago-based Boeing, which has faced losses in the Pentagon’s new spending plans. The $159 billion Future Combat Systems led by the company was broken into five parts, and its anti-missile Airborne Laser was curtailed from a program of seven 747-based airplanes to one test aircraft.

Missile defense
A ground-based missile-defense site in Europe that Boeing would have built was canceled. The company is fighting for a $35 billion contract for aerial-refueling tankers against a group including the parent of Airbus SAS.

Defense Secretary Robert Gates in May called the Future Combat Systems — manned and unmanned vehicles joined by a wireless network — “messed up” and split it into five programs. Boeing, which had been leading the effort, was left with one of the five.

Boeing will continue to have a role in the communications part of that program, which has worked “exceptionally well,” Muilenburg said, allowing it to be deployed on the existing fleet of Army vehicles. “That’s why we are now able to take that technology and move it to adjacencies,” he said. Muilenburg, who has been with Boeing since 1985, led the Future Combat Systems program in its early years.

Military satellites
Boeing is the world’s second-largest commercial-jet builder and maker of military and commercial satellites. Boeing is offering supply-chain management services and has other expansion plans, Muilenburg said, declining to give details.

Boeing was founded in 1916, when Bill Boeing built a float plane on the shores of Seattle’s Lake Washington. The company bought McDonnell Douglas in 1997, expanding the defense side of the business to help counter the cyclical air-travel market.

Boeing’s defense unit is leading the effort to enter the energy market, with help from the commercial side, and there are no plans to create a separate division, Muilenburg said. He and Albaugh are “very much focused on leveraging commonalities” in their new positions, he said.

Boeing also is seeking growth from the helicopters, UAV, cyber-security, and intelligence businesses, Muilenburg said. U.S. purchases of the company’s C-17 transport planes and F/A-18 fighter jets depend on yearly decisions by Congress, and the F-15 program relies largely on foreign buyers. “Any progress in taking on Department of Energy projects is likely to be initially very small, especially when compared to headwinds” like the conclusion of Boeing’s C-17 production, Stallard said.

International sales
Boeing’s international sales will rise to 20 percent to 25 percent of revenue from 15 percent in the next five years as U.S. defense budget growth stalls and the company pushes for overseas contracts, Muilenburg said.

Boeing is expanding international marketing of its Chinook transport and Apache attack helicopters, he said. Demand for the company’s ScanEagle drone is increasing, and customers are seeking unmanned aircraft that offer “significantly longer endurance, measured in days and weeks, not hours,” he said. The company is making internal investments to meet those needs and will seek acquisitions where needed, he said. “It’s not really a sea change in the strategy or approach but adding a sense of urgency,” Muilenburg said.