PARIS — Boeing Chief Executive James McNerney on May 12 asked whether the company’s space division could meet the challenge of Silicon Valley.  Interrupting the question-answer session with analysts at the Boeing 2015 Investor Conference, held in Chicago, McNerney threw a zinger at Chris Chadwick, head of the Boeing Defense, Space and Securty division. 

“Is Silicon Valley going to destroy your space business?”  McNerney asked Chadwick. “ I just thought I’d throw that out there.” 

It is unclear whether Chadwick had been warned of the question ahead of time.  Here is his response: “No, actually we see that as an opportunity.  You look at Elon Musk and what he’s doing.  He’s brought some new energy into the space business and we’ve competed head to head very successfully.  Look at the last two and one-half years.  We’ve been rock solid in [Ground-Based Missile Defense], solid on launch and won SLS [NASA’s next-generation Space Launch System], won commercial crew” — as did SpaceX — “with very good contractual deals. 

“We know that ‘More For Less’ is the world that’s coming at us and we’re going to get ahead of that.  At the same time we’re going to leverage where we can the technology that’s coming out of Apple, Google, Amazon and Facebook and see how we can compete going forward.  There’s a lot of innovation inside of BDS.” 

As part of his answer, Chadwick said the U.S. defense budget had shrunk by 32 percent in the last four years, while the BDS division continued to grow and to increase its profit margins.