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Boeing Shuffles Leadership for Struggling KC-46 Program

July 30, 2015 (Photo Credit: Boeing)

ID=20996435WASHINGTON — Hit with a major cost overrun charge and left with little room for error on its KC-46 tanker program, Boeing is bringing in some emergency help for the  program.

Scott Fancher, the company's head of development programs at Commercial Airplanes, has been tasked with righting a program that forms the backbone of Boeing's military aviation future.

In a letter to employees, newly minted Boeing President and CEO Dennis Muilenburg said he was tasking Fancher to "provide senior executive oversight and increased management support to the tanker program."

"Scott will work closely with Jim O'Neill, who is standing up the new Boeing Defense, Space & Security (BDS) Development Programs organization within BDS, and Pat Dolan, our enterprise Lean+/CVQ leader, to ensure that the full extent of Boeing resources and expertise are applied to meet our commitment to deliver the initial 18 tankers in 2017," Muilenburg said.

It's hard not to read the move as a sign that the company has grown concerned with the progress of the KC-46 program, despite promises that it is still on track to meet its Aug. 2017 requirement to have 18 tankers ready to go,


The choice of Fancher is an interesting one, as it hands some control over the tanker program to the commercial side of company. However, that doesn't mean he has no experience with the tanker, nicknamed the Pegasus by the Air Force. The KC-46 is a militarized version of Boeing's 767 commercial airplane, and Fancher's bio says he "leads the design, development, test and certification of the next generation of airplane models, including the 737 MAX, 777X, 787-10 and KC-46 Tanker."

It's been a rough year for the KC-46. The plane has missed a series of target dates for first flight, and has also encountered two technical challenges that have hit Boeing in the wallet.

The company's contract with the Air Force caps the service's liability for the engineering and manufacturing development phase of the tanker at $4.9 billion, with any overages paid by Boeing.

As part of a recent earnings call, Boeing revealed it had found an issue with the integrated fuel system on the plane, which led to a pre-tax charge of $835 million. When combined with a $425 million pre-tax charge from last summer's wiring issue, the company has now racked up $1.2 billion in pre-tax overages on the program.

"While the fuel system issues are well understood and we know what needs to be done, we owe it to our U.S. Air Force customer to bring the breadth and depth of 'One Boeing' capabilities to complete development, certification and delivery of the KC-46 on schedule," Muilenburg wrote in his note. "Our servicemen and women need and deserve this next-generation tanker and its mission capabilities."


Twitter: @AaronMehta

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