Boeing’s defense business, headed by Ted Colbert, will experience further financial challenges this quarter due to the Air Force One program. The financial standing in the second quarter may resemble losses from last year, with charges from fixed-price programs and operational difficulties. Recent losses included $482 million from the VC-25B presidential jet program, experiencing delays and high costs.
Colbert mentioned challenges related to supply chains, inflation, and workforce shortages, affecting the production of the presidential jets. Despite difficulties, he believes the company’s recent changes will stabilize production programs. Future contracts with the Pentagon will be based on “reality-based assumptions,” moving away from previous lowball bids that resulted in financial losses.
To boost defense revenues, Boeing is investing in new facilities in St. Louis, Missouri, hoping to win contracts for next-generation programs. The company anticipates competing with Lockheed for the Air Force’s sixth-generation fighter jet. Colbert remains confident that the Air Force will prioritize next-gen technology to counter adversaries, emphasizing Boeing’s ongoing investment in future technologies.
