November 7, 2012 / 6:08 PM / 8 years ago

Boeing aims for $1.6 billion in cost savings through 2015: memo

WASHINGTON (Reuters) - Boeing Co (BA.N) aims to reduce costs in its defense business by an additional $1.6 billion from 2013 through 2015 under a major restructuring effort, the head of Boeing Defense Space & Security told employees on Wednesday.

In a message to employees, Boeing defense Chief Executive Dennis Muilenburg said Boeing would achieve the new goal by paring the number of divisions from 13 to 10, cutting management jobs by 10 percent and closing some facilities. He said Boeing defense had already cut costs by $2.2 billion since 2010.

“We are raising the bar higher because our market challenges and opportunities require it, and our customers’ needs demand it,” Muilenburg said in a message obtained by Reuters and confirmed by the company.

He said the total savings would reach $4 billion, making the company healthier and better able to deal with a tougher marketplace.

He said Boeing would cut the number of executive jobs an additional 10 percent by the end of 2012, bringing overall cuts in executive team to 30 percent over the past two years, a move that would result in a 10 percent cut on management costs.

Reporting By Andrea Shalal-Esa; Editing by Maureen Bavdek

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