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Boeing Streamlining Work With Air Force

Boeing's F-15 Silent Eagle. Photo Credit: Boeing

Boeing (NYSE: BA  ) has been kind to shareholders this year, soaring 87% over the last 12 months. Its rising share price has happened despite many looming questions about how defense spending cuts will affect Boeing's bottom-line profits going forward.

Today, Boeing announced a partnership with the U.S. Air Force to reduce supply chain costs. This is the type of move investors hope to see more of as up to $1 trillion in defense cuts take place over the next nine years.

Boeing says the new partnership between the two parties is the first of its kind and enables three Air Force logistics complexes to execute and implement agreements with Boeing directly and "immediately." That will reduce administrative costs, improve efficiency, and speed processes up by as much as 10 months, according to Boeing. Previously, each complex -- Oklahoma City Air Logistics Complex, Ogden Air Logistics Complex in Utah, and Warner Robins Air Logistics Complex in Georgia -- would enter into an individual partnering agreement with Boeing, a process that took 12 to 16 months to complete, according to Boeing.

"The new partnering agreement will make our supply chain more agile so we can deliver maximum mission readiness to our customers," said Ken Shaw, vice president of Supply Chain Management for Boeing Defense, Space & Security, in press release.

Boeing's Defense, Space & Security segment is a $33 billion business and one of the world's largest defense contractors. The segment brought in roughly 38% of Boeing's revenue, which is down from 50% of revenue in 2010 and it's expected to drop as low as 32% in 2015, according to analysts at Morningstar.


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Daniel Miller

As a Motley Fool Industrial Specialist, I use my marketing and business background in the automotive industry to evaluate major automakers and other large industrial corporations. Follow me on twitter for tweets about stocks, cars, sports, and anything I find amusing.

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11/27/2015 1:02 PM
BA $146.95 Down -0.48 -0.33%
The Boeing Company CAPS Rating: ****