Boeing Co. is creating a new unit to develop and build aircraft avionic systems, expanding its strategy of insourcing key technology to cut costs.
The new Boeing Avionics unit will expand the aerospace company's existing offering of electronics systems, focusing on areas such as navigation and flight controls for future commercial and military jets.
The move, announced in a memo to staff Monday, takes Boeing deeper into the territory of big suppliers such as Rockwell Collins Inc. and Honeywell International Inc. following the recent expansion of its services business.
While Boeing Avionics will focus on equipment for future products, it could also be used to produce more advanced parts for existing aircraft currently supplied by third parties.
Boeing said the avionics business had been established in consultation with suppliers.
Chicago-based Boeing already produces a range of aircraft electronics, and the new unit will have an initial staff of 120, growing to an expected 600 by 2019.
The company is pursuing more vertical integration of its aircraft manufacturing business, standing up internal operations in areas such as advanced materials, propulsion systems and auxiliary power units.
Boeing Avionics will be headed by Allan Brown, a senior defense executive, reporting to Chief technology Officer Greg Hyslop.
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(END) Dow Jones Newswires
July 31, 2017 12:34 ET (16:34 GMT)