December 2004/January 2005
Volume 03, Issue 8
|Defense begins at home
Partnering with Middle Eastern countries to stabilize their military forces is a priority for Boeing. So in addition to the Boeing-built products it services in the Middle East, Integrated Defense Systems is taking a proactive approach to building upon its already strong relationships and sales in the region.
New IDS business potential is huge, with about $6 billion in sales a realistic possibility over the next five years, said Marcus Hurley, IDS vice president of business development for the Middle East. Long-term, the figure reaches as high as $18 billion. That doesn't even address potential new sales in Homeland Security and network-centric operations, which Hurley estimates could be worth $22 billion. "If you can have confidence that you have got the right knowledge here and link it back to the United States," he said, "you've got a more secure world."
But it's not enough to just sell and service products here. Countries and governments, recognizing the cutting-edge quality of Boeing technology, often enlist educational support from the company following product sales. That's why in 1985 the Boeing Industrial Technology Group was created in Saudi Arabia, resulting in four high-tech companies that provide jobs for Saudi citizens.
Companies like Riyadh-based Alsalam Aircraft Company Ltd., an aircraft modification, maintenance and repair center, are helping fill the employment gaps in this strategic nation. "It represents in some ways the things we do in our own company," Hurley said. "Building that company gives you the wherewithal in Saudi Arabia to sustain the products [Boeing has] sold. They can do the modifications and upgrades on their own aircraft."
Many Middle Eastern nations have huge and growing young populations. "When you think of that, it brings on a whole set of challenges for the leadership," said Hurley, a former U.S. Air Force officer who had lived in the region before joining Boeing in 1998. That's why Boeing is facilitating training and technology transfer for young Saudis through the Industrial Participation Initiative, helping the kingdom meet its goals of job creation and high-tech development that help its companies target new markets. "You're helping the leadership solve one of their major challengesemploymentand you're doing it all through Boeing products," Hurley said. Similar offset arrangements exist with customers in the United Arab Emirates, Kuwait and Jordan, Hurley said.
A program launched three years ago trains young Saudis in aircraft maintenance. Once students complete the course, they go to the United States to apply for Federal Aviation Administration certification. Now companies such as Alsalam can sustain their workforces with highly trained local residents.
Other educational programssuch as one jointly sponsored by the University of Missouri-Rolla and King Saud University for the past several yearsequip mid-level managers from Alsalam and the Saudi military forces with specific program management and leadership training. And high-level business leaders such as Alsalam CEO Mohammed Fallatah soon will be able to visit the Boeing Leadership Center in St. Louis for courses that "mix them with other senior leaders in our company and add a cultural element to the training," Hurley said.
Such circular involvement, he said, leads to self-sustainment and increased profitability for Boeing's Middle East suppliersand ultimately, to increased sales for Boeing. He cites cases such as the C-130 Avionics Modernization Program, which Boeing won three years ago. Spare parts and kits will be assembled by U.S. Boeing employees and then shipped to Alsalam, where they will be installed in aircraft operating in the region. "The intent is not to take jobs away from the United States," Hurley said. "Most of the work is still being done in the country. If [U.S.] workers don't have the international business to sustain the lines, the work will be shut down."
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