Boeing has sold its Digital Receiver Technology subsidiary, which produces surveillance equipment for US intelligence and military, to Thales Defense & Security, a unit of Thales Group, to offset challenges from production delays, safety concerns, and labor disputes that crippled its finances.
Boeing is selling its non-core assets to focus better on commercial aviation and major defense contracts to streamline operations and enhance market position.
The Digital Receiver Technology sale, for which the terms were not disclosed, comes as the aerospace giant grapples with a $5 billion loss in Q3, with the Defense and Space arms facing a $2 billion loss, reported ADN.
Boeing has embarked on a large-scale furlough initiative amid the financial pressure. This resulted in 33,000 employees being cut off from its 170,000-strong workforce since Sept. 13. The layoffs also impacted staffers from the Renton and Everett factories where the 737, 767, and 777 commercial jets are manufactured.
Digital Receiver Technology’s expertise in wireless intelligence equipment makes it a vital addition to Thales’ portfolio as it strengthens its position in electronic warfare and ISR solutions, reported Aero News Journal.
The development closely follows a Wall Street Journal story suggesting Boeing would offload a small defense unit but didn’t name the unit. The sale is part of Boeing’s recovery plan to raise $25 billion through debt reduction and stock sales, as well as the sale of non-core assets.
The ongoing turbulence in Boeing is expected to reflect heavily on its ticket prices and airfares. The company is, however, expected to weather the storm thanks to its duopoly with Airbus. Alongside the $33 billion in losses, the company is saddled with credit rating downgrades and bankruptcy which will likely affect at least 10,000 suppliers across 50 states.
Meanwhile, a 35% salary increase for employees has been agreed upon by the union, subject to worker ratification votes. However, as the business struggles to make up for the $35 billion total loss, at least 10% of employees are being laid off.
The aircraft maker has been in the news for wrong reasons throughout 2024, with its key narrow-body airliner 737 Max having mid-flight incidents like a door plug blowing off on an Alaska Airlines flight in January. In addition, fuel leaks, loose hardware, stuck rudder pedals have raised further safety concerns and regulatory scrutiny. The planemaker had to postpone the entry into service of the widebody 777X and confirm the retirement of the 767F freighter in 2027.
