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2003 Speeches
Jim Albaugh

Jim Albaugh

Boeing Integrated Defense Systems

The Boeing Company

"NATO Procurement Issues"

Royal United Services Institute

London, England

December 08, 2003

Thank you, Admiral. [Sir Jeremy Blackham] It is a pleasure to be here. I appreciate the chance to join this distinguished panel.

Let me begin by saying how glad I am to hear so many speakers talk about how important our countries are to each other.

It is easy, in times of controversy - and all times of change are times of controversy - it's easy at such forget that different perspectives are part of NATO's strength.

The United States and Europe share a tremendously important tradition of critical thought and open debate. These freedoms have powered our political and economic systems, and are behind our advances in technology and knowledge - advances that have brought prosperity and security not only to our citizens, but, increasingly, to the world.

Adversaries have also used the fruits of this knowledge...but they have not been able to duplicate the intellectual energy and innovation that drives knowledge creation. Because that requires the freedom of a democratic think, to discuss and to create. These freedoms test us but they also empower us - and they are some of the most important things our alliance protects.

We are here to talk about one dimension of that effort: how NATO procures the tools it needs to respond to the security threat - and particularly, how we are going to work together to do that.

These aren't new questions. I was doing some research before coming today, and discovered that the first NATO conference to deal with these issues, took place in London the month I was born.

That was in May 1950, only a few months after NATO was founded. There was a great deal of discussion about interoperability and resource issues. As Lord Ismay remembered it: "Long memoranda were being exchanged on the subject without much result." Probably an understatement.

Now, it's tempting, when you read a statement like think that the procurement challenge hasn't really changed. If you look at defense acquisition at different points over a long period of time - say, 1890 through 1990 - you'd notice much the same thing. The technology changed, but the focus of industry was still on bending metal; on building platforms and munitions and other hardware...and allied countries talked about standardization and resource allocation.

Today, though, we are beginning to face a radically different acquisition challenge. We are not being asked, as an industry, to meet a static set of requirements, but to create a whole new order of capabilities...responsive to a wide range of symmetric and asymmetric threats. The out-shoot of this is a concept called network centric operations or "network enabled capabilities," that I know most of you are familiar with.

Now, network centric operations is described in many is about sharing information and capabilities across is about integrated command and is about is about precision engagement is about global situational awareness.

It is not a simple shift from building bombs and bullets; it is a quantum leap in how information is shared and used. It is about that are designed to interact, to build on each other, to interoperate now and in the future. Systems that are integrated, networked and flexible, to deal with rapidly changing and unforeseeable threats.

To achieve this requires building a network capability into virtually every platform and product we make - including existing platforms. At a more fundamental level, it means thinking in terms of a new design architecture -

All this challenges us to think in a entirely different way...about how munitions and platforms work together...and how we work together to build them.

First, the industry-customer partnership. To grow the kind of capability we're talking about, industry and acquiring agencies need to be working together at the earliest stages of concept and development.

In the United States we have a terrific challenge to harmonize requirements across our armed services to ensure the desired level of interoperability. This challenge pales in significance when measured against the challenge of synchronizing and harmonizing requirements across our allies and NATO. This will continue to be a significant challenge and one that needs to be a top priority. These partnerships will only become more important as time goes forward.

Second, company-to-company relationships. To produce tomorrow's defenses will require the best from across our industry not the best from any one company. No company has within its organization all the capabilities required to produce this concept of seamless network centric warfare.

We also, across industry, need to adopt standard protocols for information and communication architecture that when applied will ensure that the products we produce lend themselves to interoperability.

In terms of company-to-company relationships, we are trying to bring the best of industry. To bring the best ideas and the best people together, we are partnering with BAE Systems, Thales, Marshalls, GKN, and EADS; and the list is growing - Finnmechanica, Poland's PIT, Russia's RTI Systems; IAI, Turkey's Havelsan, and more.

To reiterate my point, the fact is, no single company and no single country has a monopoly on the talent and creativity and forward thinking that today's defense systems demand. We are going to have to work together and we are going to have to share ideas.

Let me end by raising a few challenges.

First, technology transfer. The heart of defense transformation is information and ideas. It can't happen if we aren't able to share our knowledge, especially with our closest allies. A key requirement on the U.S. side is an efficient, effective and predictable export control process.

We are on record as supporting changes in the way the U.S. shares information and technology. And indeed, the Bush administration has recognized the need to eliminate impediments to cooperation. There's no reason why we can't achieve a secure framework that does not frustrate NATO's ability to move forward.

Second, resource issues. It's not news to all of you that defense spending in Europe has been in decline. And this has had an impact on how fast and effectively the Alliance prepares for the new defense environment. As Lord Robertson has said, "The potential of Allied Command Transformation can only be reached if our forces have the tools to translate theory into reality."

The fact is, however, that even with limited resources, every one of the NATO countries has areas where it is or can be on the leading edge. The challenge for us all is to focus our resources in those areas.

This is of course another argument for partnerships, which will maximize our productivity, and more important, maximize the capabilities that result.

Call it precision-guided investment ...defense spending that hits its target without collateral waste. That's to the advantage of every one of our countries, and to NATO as a whole.

I started my remarks on NATO procurement challenges by talking about how much has changed from the Cold War model and its predecessors. And the likelihood is very strong that as time passes, we'll be facing a new set of challenges and requirements. Lord Robertson has said, "It ain't your Daddy's NATO." Well, it's not our sons' and daughters' NATO, either.

It is ours...we are the stewards.

The importance of active alliances to our success cannot be understated. The defense of democracy requires teamwork, it requires dialogue, and it requires creative minds working together. It is true for military's true for diplomacy...and it's true for our defense industries as well.

We must put building strong relationships at the top of our business priorities. Because how effective we are in growing these partnerships is going to determine how effective we are in meeting a whole range of requirements. And ultimately, in supporting the military capability we need for 21st Century defense.

Our partnerships are just beginning. But I'm confident we will succeed.