Boeing Says Caret to Replace Chadwick as Defense Unit's Chief -- 2nd Update

By Doug Cameron

Boeing Co. announced the sudden retirement of Chris Chadwick as head of its defense-and-space unit after just over two years leading the $30 billion-a-year business.

The aerospace giant on Wednesday said that Leanne Caret, 49 years old, a company veteran who currently heads Boeing's logistics business, will replace Mr. Chadwick on March 1. The company gave little reason for the departure of Mr. Chadwick, 55, saying only that he is eligible for retirement and plans to leave the company later this spring.

"He believes the business is on a solid, stable footing, and his retirement allows his successor to build on that foundation and pursue upcoming growth opportunities," said a spokesman. Boeing declined to make Mr. Chadwick available.

Boeing hadn't previously telegraphed any plans to change senior management at its defense arm. Mr. Chadwick, who previously led the company's military-aircraft arm, has headed the St. Louis-based defense-and-space segment since December 2013, replacing Dennis Muilenburg, who is now Boeing's chief executive. The company announced this week that Mr. Muilenburg also would assume the chairman's role when predecessor Jim McNerney retires at the end of this month.

Ms. Caret, who joined Boeing in 1988, becomes one of several women running major U.S. defense businesses, including Lockheed Martin Corp. CEO Marillyn Hewson and Phebe Novakovic, her counterpart at General Dynamics Corp.

Ms. Caret has previously served as chief financial officer of the defense unit and run its helicopter operation. Her appointment was approved by the Boeing board at a meeting over the weekend, the company said.

Boeing's defense business has remained solidly profitable despite Pentagon spending cuts in recent years, and margins increased following restructuring that included thousands of job cuts. But the unit also has suffered some recent setbacks.

Last year Boeing lost out to Northrop Grumman Corp. after a hard-fought, yearslong contest to build a new long-range strike bomber fleet for the U.S. Air Force, a program that analysts estimate could eventually be worth more than $80 billion.

Boeing has another big Pentagon contract to build new refueling tankers for the Air Force. That project suffered design and technical problems that delayed its first flight and triggered $1.2 billion in pretax write-offs against Boeing's earnings, though the company has said the program is now on track.

Boeing and its partner on the bomber bid, Lockheed Martin, lodged a protest over the decision, but the Government Accountability Office last week turned it down. Analysts said Boeing could still opt to take the Pentagon to court in an effort to reopen the contest.

The bomber was one of a small number of significant opportunities for Boeing to win new big-ticket Pentagon contracts. Others include the new T-X trainer jet, a proposed Navy drone and the JSTARS surveillance plane. Boeing also is looking for additional work against the backdrop of declining orders for its existing combat jet lineup, including the F-15 and the F/A-18.

Write to Doug Cameron at doug.cameron@wsj.com

(END) Dow Jones Newswires

February 24, 2016 19:16 ET (00:16 GMT)

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