October 2005 
Volume 04, Issue 6 
Cover Story

Boeing is working hard in Korea to build relationships in a nation with a dynamic economy and many business opportunities


About South Korea


Official country name: Republic of Korea or South Korea
Capital: Seoul
Area: 38,345 square miles (99,313 square kilometers), slightly larger than Indiana
Population: 48.2 million
Gross domestic product: $679.7 billion (11th largest in the world)
Language: Korean
Major religions: Christianity, Buddhism
Culture: Heavily influenced by Confucianism and Shamanism

Did you know …

  • There are 37,000 U.S. troops in Korea today, but there are plans to reduce troop numbers. Today, 3,200 Korean troops are in Iraq supporting coalition troops.
  • Los Angeles is home to the largest Korean population outside of Korea.
  • Korea is the United States' sixth-largest export market and fourth-largest agricultural market.
  • Korea is the world's most wired country: More than 70 percent of its population have broadband Internet access.
  • Well-known Korean brands on the worldwide market include Hyundai (automobiles), Samsung (electronics), LG (electronics) and Amore Pacific (cosmetics).

When Joe Song was born in 1957, Korea was still reeling from the damage of the Korean War. Although the fighting in that conflict had stopped four years earlier, the nation was poverty-stricken, while Seoul was devastated and virtually undeveloped. Song and his family made their way to the United States for a better life in 1970, leaving behind a country Koreans knew as "The Land of the Morning Calm."

A quarter century later in 1996, Song would return to Korea as the senior manager of McDonnell-Douglas' MD-95 Korea program (which later became the 717 Korea Program for Boeing) and find Seoul was completely transforming itself into one of the world's most dynamic cities. That metamorphosis came from several decades of building an industrial base as one of the "Asian Tigers" that saw double-digit economic growth rates in the 1960s through the 1990s. Today, Seoul is the home to modern skyscrapers, a majority of Koreans have broadband Internet access, and it seems as if everyone uses cell phones to manage their lives. Not bad for a country that barely had phone service 50 years ago.

"Korea has changed so much since I left the country as a 12-year-old boy," said Song, who now handles business development for Boeing Integrated Defense Systems in Korea. "Korea went from being a country on the brink to an economic powerhouse. That is just amazing."

This economic strength makes Korea an important international market for Boeing—and a market where Boeing is working hard to build and strengthen relationships. Korea offers big opportunities for IDS, Boeing Commercial Airplanes and Connexion by Boeing. Among the recent examples:

  • The Republic of Korea Air Force selected the F-15K Strike Eagle fighter aircraft and is scheduled to receive its first aircraft this year. Indeed, the F-15K is scheduled to make its first-ever public flight at this month's Seoul Air Show. Deliveries of the remaining aircraft from this 40-aircraft order will run through August 2008.
  • Korean Air Lines became a member of the Boeing 787 Dreamliner launch team in April with its order for up to 20 of the revolutionary midsize passenger airplanes. The agreement involves 10 firm orders and options for 10 additional 787s. Delivery of the 787-8 airplanes will begin in 2009 and extend through 2013. KAL also has a very unique role as an engineering and manufacturing partner for BCA. They are the only airline that has a division that works as a partner in putting together major assemblies for various Boeing models including the 737, 747, and 777.
  • Korean Air and Asiana Airlines are among the carriers that provide the Connexion by Boeing high-speed, real-time in-flight Internet service on select flights. Thanks to Connexion by Boeing, passengers on these flights can use their laptops to send and receive e-mails, connect to corporate networks, and surf the Web at speeds comparable to a modern home or office Internet connection.

F-15K Strike Eagle fighter aircraftMany business cards

In Korea, relationships matter a great deal. Boeing has been with Korea since its modern-day beginnings. Boeing and Korea have established partnerships that extended well beyond a typical business relationship in both the defense and commercial sectors to support the growth of Korea's aerospace industry.

As an example of the work Boeing puts into building relationships in Korea, Song said he probably goes through more business cards than any other Boeing employee. The business culture in Korea calls for an exchange of business cards during a first meeting. For Song, a busy week can require him to hand out hundreds of business cards.

To conduct a successful business in Korea, Boeing needs to take a long-term partnership approach, Song said. The Boeing–Korea Aerospace Industry Development Plan launched in 2001 "is a beginning step," Song said, "but Boeing can be involved more."

Song takes his role seriously. "The stakeholder relationships we have built contributed to our winning of the multibillion-dollar F-15K fighter contract back in 2002," he said. "The relationships we nurture and build now for Boeing will ensure successes of IDS business development in this market in years to come." In fact, along with the forthcoming F-15Ks, Korea operates one of the largest fleets of Chinook helicopters in Asia, a total of 28 Chinooks, and has the largest arsenals of Harpoon anti-ship missiles. Song said: "Opportunities in Korea will continue to grow for IDS. We are looking at $9 billion in real opportunities in Korea for the next five years."

Boeing is constantly seeking new business relationships that complement its core competencies, develop new market opportunities and strengthen the company's international presence. Despite the challenges posed by Korea, Boeing is making great progress, said Bill Oberlin, president of Boeing Korea. "Korea is a great partner for Boeing," he said

In April, Korean Air Lines joined the 787 Dreamliner launch teamOberlin spends a lot of time helping Boeing business units understand the Korean market and the customers there, as well as helping them gain access to customers and other key stakeholders. "I focus on ways in which we can increase our local presence, because it is very important for Boeing to demonstrate our long-term commitment to Korea," he added. "It does present challenges. But, that is why we are here to help bridge that gap."

To demonstrate its long-term commitment to Korea, Boeing's Korea office launched a community relations program in 2004 that specifically focuses on Korean youth and education (see box at right). These efforts have not gone unnoticed by local stakeholders. 

"Back in 2000, Boeing appeared to be very insensitive to Korean culture and disrespectful to its people," said Sung-kurl Kim, a Korean defense journalist. "Looking back, I think it was mostly due to the lack of communication between Korea and Boeing. Today, I see that Boeing is making progress with its newly launched community relations program and improved communications function. It is worth noting that Koreans want to see the country's relationship with Boeing taken to the next level. Doing so will increase Boeing's appeal to the Korean public, and Boeing's chances for success in Korea will increase."

"Korea is a very robust market for Boeing, but Korea can also be one of the most difficult places to do business," said Oberlin. "It is important for Boeing to demonstrate its long-term commitment to Korea. Don't believe for a second that you can do it alone. It takes a team, and that is why we are here to help. Our team understands both American and local cultures, and therefore can better navigate through difficulties to ensure we can execute, and execute the Boeing way."



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