Boeing Frontiers
November 2003
Volume 02, Issue 07
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Around the World

Look to the East


Above: Stanley Roth (left) keeps in close touch with in-country leaders such as Boeing Australia President Andrew Peacock (right). Behind the men, seated in Roth's office, is an Indonesian batik print Roth acquired in the region.
Nothing in the aerospace world—not commercial airplane sales campaigns, jet fighter purchases, or even satellite launches—happens in a vacuum. In today's environment, where the only constant is change, global enterprises like Boeing must keep geopolitical and socioeconomic factors in mind when determining both short-and long-term business strategies.

Helping provide the high-level context and counsel for these on a worldwide scale is Boeing International Relations, the Arlington, Va.-based organization headed by former U.S. Ambassador Tom Pickering. His team works in tandem with Boeing senior leadership, business units, and 18 regional and in-country Boeing presidents to establish the company's local footprint, strengthen key stakeholder relationships and, ultimately, help Boeing grow its business around the world. That's critical for a company like Boeing, which has customers in 145 countries.

A key member of Pickering's small team is Stanley Roth, International Relations vice president for Asia. With an extensive, Asia-Pacific-focused background that includes service in the U.S. Department of State, the National Security Council and the Pentagon, Roth uses the network he's cultivated over decades to Boeing's advantage within his sphere, which includes northeast Asia (Japan, China, Korea), Southeast Asia (Malaysia, Singapore and the eight other member states of the Association of Southeast Asian Nations), Australia and India. And he's doing it by helping Boeing develop a mindset that values local knowledge and its impact on the bottom line.

"As with the business units, 'intimate customer knowledge' is the key," Roth said. "We try to utilize our specific expertise about countries and regional issues to help support the [sales] campaigns, working closely with the business units."

While supporting campaigns remains a top priority, Roth's other activities include building a team of country executives to coordinate Boeing cross-enterprise activities in key regional markets (the Asia team is nearly complete, he said, with an India appointment on the horizon). Also key is accompanying Executive Council members on important relationship-building visits to Asia that help the senior leadership of the company get a better understanding of both short-term developments and long-term trends.

"My feeling is that the main function of International Relations is overseas," Roth said. "We're not a Washington institution, even though our headquarters is here. For me, it's important to be out in the field looking for opportunities to grow the business and create shareholder value."

He tries to travel to this vast region at least once monthly. While on the ground, he talks strategy with Boeing country presidents and their teams, works with the business units to seek new opportunities, and maintains the relationships he's built over the past 25 years. This year's high-profile celebration of Boeing's 50-year involvement in Japan—which featured a May leadership summit in Tokyo hosted by Chairman and CEO Phil Condit—resulted from one of these strategy meetings and proved the value of cross-enterprise collaboration in this key Asian market.

Roth sees three policy issues that could disrupt regional peace and stability and affect Boeing business: tensions on the Korean peninsula, the international terrorist threat, and growing protectionism on international trade issues. Roth spoke to Boeing Frontiers about these and other factors related to company business interests in this strategically important part of the world.

Q: In rapidly shifting and volatile times like these, what sort of profile or footprint should Boeing the enterprise be creating in Asia?

A: We have to persuade people we are a local company, that it's not just a "We come, we sell, you buy" relationship. But it's difficult to generalize about how best to accomplish this goal. One size doesn't fit all, and there will be times when Boeing will want to maintain either a higher or lower profile in-country. This is a case-by-case issue that requires careful judgment.

Q: Is it necessarily true that what's good for the United States is good for Boeing? In other words, does Boeing benefit from being an American-based company?

A: We're a business—we're not a nation conducting foreign policy. We try hard to stay out of political disputes. But not all countries see it that way and it's sometimes hard to de-politicize trade.

It cuts both ways. Sometimes, it's a good news story because countries want to be associated with the world's largest economic and military power. Regrettably, there are also times when countries that disagree with U.S. government policy let that disagreement spill over into their commercial decisions. We have to handle each case sensitively with a full knowledge of the background issues involved.

Q: EADS/Airbus is obviously making a major push around the globe, trying to sell its tankers to the Royal Australian Air Force and its commercial planes to China and Japan. Outside of what Commercial Airplanes and Integrated Defense Systems do from the business unit side, how does International Relations help?

A: If you go back to the reason why International Relations was founded, it was to help make Boeing a global company. And a big piece of that is to make it a local company, to create a public impression that we are different from other (multinational) companies. For example, when you have Bill Oberlin in front of the Korean public almost daily as both president of Boeing Korea and head of the American Chamber of Commerce [Korea], it helps differentiate us from many of our competitors. Similarly, when you have a 50-year anniversary celebration highlighting Boeing's extraordinary history in Japan, that's something our competitor can't do.

Q: Japan seems to be becoming more active on defense issues as a result of developments with North Korea, even without violating the terms of its constitution. How do you see those changes potentially affecting Boeing business?

A: Japan is undergoing a quiet revolution on defense. It is expanding Japan's role internationally on such issues as international peacekeeping, even within the bounds of the old constitution. And it's sending its forces ever further from home in support of U.S. and coalition forces in Afghanistan and Iraq. As Japan engages in these new activities its defense needs will increase, resulting in more opportunities for Boeing.

Q: The U.S. obviously isn't the only nation thinking about "homeland security." How is Boeing—under the guidance of the U.S. government—positioned to help take advantage of opportunities presenting themselves throughout Asia? How can the company proactively help shape defense markets in these countries?

A: Since Sept. 11, 2001, there has been enormous increase in the priority given to homeland security. From a Boeing perspective, this is a chance to bring some of our best technology to bear in support of friends and allies. There's a real opportunity for the utilization of the network-centric capabilities of Boeing, one of our core competencies. Our challenge is to ensure that our customers understand the need for an integrated system, rather than just a specific piece of hardware.

Q: Boeing plans to install a country executive in India in the near future. Why is this market strategically important to Boeing?

A: You're talking about a country that in the relatively near future will be the most populous country on earth. Second, there has been a sea change in the relationship between India and the United States. The major improvements that we're now seeing should hopefully lead to more business opportunities.

Third, the economic reform process still taking place in India has given it a relatively high growth rate in comparison to many other countries. As India becomes more prosperous, it should become a bigger customer. At the same time, India has become a major center for R&D, engineering, and information technology. Many major corporations have started operations there, and Boeing is now looking at what opportunities might present themselves.

Q: Now that most of Boeing's country and regional VPs have been appointed for the Asia-Pacific region, what's next for International Relations and its global strategy development in the region?

A: The important next step is strategy implementation. We're talking about a process that in many cases is in its first year and remains to be implemented enterprisewide. What more can we do to function as a local company in as many key markets as possible? How can we further support the business units over the next year? How can we help to reduce costs? The opportunities are just beginning.

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