WASHINGTON ― In an email sent to company employees Thursday morning, Boeing CEO Leanne Caret announced the company will stand up two new divisions next week.

Boeing is establishing a Commercial Derivative Aircraft division and a Missile and Weapon Systems division. The Commercial Derivative unit will be based in Seattle and take over responsibility for the KC-46 tanker, which has suffered delays and deficiencies, frustrating senior U.S. Air Force officials.

The unit will also handle the new Air Force One and P-8 submarine hunter. Tim Peters, a former Boeing KC-46 program manager, will head the unit.

The reorganization was first reported by Defense One and was confirmed to Defense News by a Boeing spokesman.

The Missile and Weapon Systems unit in Huntsville, Alabama, will monitor work on the new Ground Based Strategic Deterrent, the Ground-based Midcourse Defense missile interceptors, the Joint Direct Attack Munition and other weapons. This unit will be led by Norm Tew, former head of the company’s missile defense program.

“Commercial derivatives and missile and weapon systems are being stood up as their own divisions because those market areas are priorities within our long-term strategy,” Boeing spokesman Todd Blecher said.

According to Blecher, the migration of these programs has been in the works ever since Boeing began its development organization strategy, with each change occurring according to when programs reached certain milestones. “[W]hen Development Vice President Pat Goggin told Leanne Caret of his intention to retire, she decided the time was right to make the next step in her ongoing evolution of how we operate,” he said.

The company will also be disbanding its Development business unit, which was created in 2015 to improve the “affordability and schedule performance” of new products.

This is Boeing’s second major reshuffle in 18 months, as it moves to consolidate locations and cut costs.

Daniel Cebul is an editorial fellow and general assignments writer for Defense News, C4ISRNET, Fifth Domain and Federal Times.

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