Boeing Creates New Avionics and Electronics Unit -- Update
July 31 2017 - 4:56PM
Dow Jones News
By Doug Cameron
Boeing Co. is creating a new unit to develop and build aircraft
avionics systems, expanding its strategy of insourcing key
technology to cut costs.
The new Boeing Avionics unit will expand the aerospace company's
existing offering of electronics systems, focusing on areas such as
navigation and flight controls for future commercial and military
jets.
The move, announced in a memo to staff Monday, takes Boeing
deeper into the territory of big suppliers such as Rockwell Collins
Inc. and Honeywell International Inc. following the recent
expansion of its services business.
While Boeing Avionics will focus on equipment for future
products entering service over the next decade, it could also be
used to produce more advanced parts for existing aircraft currently
supplied by third parties.
Boeing said the avionics business had been established in
consultation with suppliers.
Shares in Rockwell Collins extended an early decline and were
recently down more than 6%. A spokesman said it didn't expect any
impact from Boeing's move in the "foreseeable future," and said
they would continue to work collaboratively.
With most aerospace sector shares down, Boeing shares continued
the advance that has lifted the stock by more than 20% in July,
buoyed by a firmer outlook for cash and profits.
Chicago-based Boeing already produces a range of aircraft
electronics, and the new unit will have an initial staff of 120,
growing to an expected 600 by 2019.
The company is pursuing more vertical integration of its
aircraft manufacturing business, standing up internal operations in
areas such as advanced materials, propulsion systems and actuators,
which move the flaps on a jet's wings.
Boeing Avionics will be headed by Allan Brown, a senior defense
executive, reporting to Chief Technology Officer Greg Hyslop.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
July 31, 2017 16:41 ET (20:41 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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