Export sales in Boeing’s legacy fighter business have revived since Leanne Caret was appointed president and CEO of the company’s Defense, Space & Security unit in February 2016. And the business is well positioned for the future, thanks to three multibillion-dollar contract wins in 2018—the U.S. Air Force’s UH-1 replacement and T-X trainer and the U.S. Navy’s MQ-25 carrier-based unmanned tanker. She met with Aviation Week editors at her office overlooking the Pentagon in Arlington, Virginia.

AW&ST: How are you strategizing for the upcoming U.S. Air Force programs such as the Next-Generation Air Dominance, Sixth-Generation Fighter and Advanced Battle Management System? Will you use the same kind of low-cost approach that you did on MQ-25 and T-X?  The easy premise for everyone was, “Boeing bought in.” The reality is that the investments we’ve made in our model-based systems engineering and our assembly processes allowed us to do what we did. And we’ve had several generations of advancements in each of those areas. We decided a few years back that perhaps Sixth-Generation is more about the design and build process. We shifted some of our investments over to doing just that.  

The real change was how we did it. Think about an F/A-18. It takes three shifts to merge the forward and aft fuselage, 24 clock hours. T-X takes less than an hour. No shimming. No holes being drilled.

So essentially you would be able to offer the same kind of low-cost bid on future programs because of your advanced techniques?  We believe we will be extremely competitive. Because who knows how the government is going to evaluate. But it’s not just on the acquisition, because 70% of any program is the life cycle, the support and sustainment. What we also did on T-X and MQ-25 has provided the digital thread through the life cycle. Customers are already looking at that angle. That’s never been done before. And it really is revolutionary.

Is it simply a case of bringing commercial practices to the defense side, or is there some tweak you’re bringing from commercial manufacturing?  It is a hybrid. We have incredible commercial advancements. We’ve also been doing complementary advancements on the defense side. And we’re bringing them together. What we do well on defense is the up-front development. What our commercial enterprise does is large-scale production. So, it’s how do you merge the best of both of those worlds? Then, you add in the services side. It really has changed the way we look at the value stream. We’re looking at areas of opportunity to drive out cost, drive in efficiencies for our factories and to help with support so the Navy, Air Force and Army have a better chance of reducing their ownership and maintenance costs.

The KC-46 tanker program has not been a smooth ride.  I was not thrilled with how we have performed throughout the years. We were late, and you all reported on much of that. Then, to have the issue of foreign object debris was unacceptable. It is not who we are as a company. It was humbling. It was embarrassing. I have made apologies in person to the Air Force leadership. As a team we are using this as a catalyst. This is about daily execution on every level of the business. Not just on new franchises, our big deliveries, but about first-time quality in everything we do.

How do you ensure you execute on time and maintain the focus on the Space Launch System rocket program to keep it on track?  Space is hard. Having a program that starts, stops, starts, stops provides impediments along the journey. This is about bringing the very best daily execution that we have. But it is also about making certain we are focused on robust systems engineering and understand the qualifications required. You’re talking about something on a scale that’s never been done before.

Do you really think we’ll see boots on the Moon in 2024, as the Trump administration is planning?  If we don’t, it will be because of a collision of all the environmental factors. I believe the technology will be there. But we all know that this is about more than just the technology. It’s about making certain there is a focused approach. I don’t know exactly what that will mean, but we’ve had boots on the Moon before, so we know how to do that as a nation, right?

What do you think about the Moon lander concept announced by Blue Origin owner Jeff Bezos? Is that a threat to your business?  I don’t view it as a threat. This is going to be a community effort. There is going to be manufacturing in space. I am firmly convinced that before we die, getting on a vehicle and going up to low Earth orbit is going to be no different than if somebody wanted to take a helicopter ride to see the Grand Canyon.

Can we turn to the 737 MAX, from your Boeing Defense and Space angle? In a business sense, do you feel more pressure now that your division has to perform because the other side of the company is under stress?  The short answer is ‘no.’ I have the same focus on how I run this business every day. It starts with safety and integrity. Those are the core tenets of who we are. One of the things I’m not sure our country understands is how much we are One Boeing. In 2018, we rolled out the “Boeing Behaviors.” From leadership all the way to mechanics on the floor, we all are held to the same expectations and standards. When [CEO] Dennis [Muilenburg] asked me to come into this job, it was with a focus on restoring the business to a growth trajectory. That meant delivering on our promises to customers. He gave me two things to focus on: Earning trust and execution. You can’t be on a growth trajectory if the customer doesn’t trust you and you’re not executing.

You and other Boeing leaders talk often about One Boeing. Have resources from your team been brought to bear to help the company bring the MAX back?  Absolutely. This is a one-company effort, and it is bringing forward everyone and anyone who brings value, whether from engineering to manufacturing to supply chains. We did the same thing on tanker. If I have needed help on a commercial crew, or on T-X or on Chinook, we have brought the company together.

What are you helping Kevin [McAllister, CEO of Boeing Commercial Airplanes] with?  I’m not going to go into any of the details. But good try.

What are the biggest challenges facing suppliers?  It’s making certain, that the Tier 2, Tier 3, the sub-tier suppliers, understand the stability of work going forward, because many of them don’t have the same liquidity as the Tier 1s. One of our goals as we approach a supplier is to talk about our work across the company, so they understand all the different puts and takes. Similarly, when you look at a supplier, you also want to understand their supply base across all of industry. [Pentagon acquisition chief Ellen] Lord has studied the industrial base to understand risk areas that may need to be addressed. But for them, we remember that when budgets were in a steady state of decline it was about making sure there was inside transparency so they could plan their investment profiles, their staffing, whatever technology instruction they want to do. It’s really hard to make decisions with less than a year-long cycle time.

Do you see underinvestment in the sub-tiers?  No, not at all. If you look at it simply through a program lens, you may find some areas of opportunity, but when I look at the industry, the biggest opportunity we have is continuing an infusion of talent. Part of this is how we attract people to the aerospace industry and make it as exciting as some of the high-tech companies. We tie that to our purpose of what we do, what the nation does, and that is where you get a lot of the energy and enthusiasm. Similarly, with space, folks thinking that they can have a part of being on the next rocket ship or engine, that’s a great recruiting tool.

What are you doing to prepare for 2020 if U.S. defense spending dips?

About 31% of my business is outside the U.S. That benefits both the international and U.S. customer. What we did with the Canadians on Chinook benefited the U.S. Army immensely. Saudi Arabia and Qatar continue to buy F-15s, and they are buying the more advanced versions. We are able to bring that technology back as the Air Force talks about what they want in their F-15s. We’re able to bring the benefit and the value from what we’ve done for other customers already. And then that just causes other international customers to want to have the opportunity perhaps to look at those aircraft as well.

Funding for Block 2 Chinook has been a struggle this year. What does that mean for the CH-47 production line, for that program and for international heavy-lift helicopter competitions? 
I continue to be a strong believer in Chinook. I used to run the program, the whole site and the factory, so Chinook is near and dear to my heart. We’re having great conversations with the Army in terms of modernization and next steps across all of our rotorcraft platforms, and I remain confident in the Chinook production system and the benefit it provides.

Boeing had been the industry leader on hypersonics and directed energy. We haven’t heard much from Boeing with the announced programs such as the Advanced Rapid Response Weapon, the Hypersonic Conventional Strike Weapon and on the directed energy side. Why has the company been so quiet?  We continue to invest in that area. It’s important to get signs from the government on where they are going. It’s important that we understand where we’re going to bring the best value and where we’re going to compete. We have some focused efforts in those areas, but there’s more going on on the classified side than out in the white world. Don’t you all hate it when we do that to you?