We are not ruling out India acquisitions: Boeing’s Leanne Caret
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Bengaluru: US aircraft maker Boeing Co. last week launched Boeing Defence India, a local unit aimed to support the company’s growth in the country. Pratyush Kumar, president of Boeing India, will lead the new unit. This is the fourth such global unit for Boeing, after Australia, the UK and Saudi Arabia.
In an interview, Leanne Caret, president and chief executive officer of Boeing Defence, Space and Security says the new unit will expand the firm’s footprint in India with a long-term bet on the country. Boeing also does not rule out inorganic growth in India by acquiring firms that may give it technical advantage. Edited excerpts:
What is the reason for establishing this new India unit?
The establishment of Boeing Defence India is really the next step in our evolution here. We clearly have had a strong partnership (for ) over 75 years, starting in the commercial spectrum and over the last 20 years, we have continued to have more and more defence products and most recently, we have had some really great partnerships with P-8s, Chinook Apache and C-17.
But as we look to the future, there is such an incredible talent base here in India and there is real opportunity to use it as a core part of our ecosystem.
Boeing Defence India is literally a localized operating company that would report into me; that has responsibilities for defence products and services that we provide through our full spectrum in Boeing Defence and this allows us to take advantage of our global reach but do it in a way we can leverage local talent with a goal to have greater than 95% of our staff to be local hires and then, have key components from engineering all the way through manufacturing, fabrication, final assembly test, all the way up to the life cycle support.
Pratt (Pratyush Kumar) will have the operating authority that he needs to really run the business. It’s going to put us on a growth path to continue not only to grow our business but, more importantly, continuing to have those enduring relationships with customers here so that we meet their needs.
What was the trigger to establish this?
The real reason any company is successful is that you have enduring customer relationships and you really do leverage the power of the enterprise but you also bring it together and you put forward solutions that are aligned to customers’ need and what you tend to find over time is that sometimes, a tendency to do everything from the US and when you have countries such as India which have strong national interest, who clearly have enduring relationships with the US, that its just (an) opportunity to make it more local. And so, about a year and a half ago, we started thinking about what this would look like and how we could go make it happen. Boeing Defence Australia was our first, then we migrated with Boeing Defence UK and then we started Saudi Arabia and now Boeing Defence India.
Can you give an example of what this will change when you already have an office and employees in India ?
Today, in many cases, you could view this as a facilitator role, the way we have been operating. So, Pratt has had responsibility in terms of all of our customers in the country, he has been the lead on helping us bring in folks from the US helping sell products and services, clearly, addressing customer needs and having reach back. What we are doing is, we are giving him a local team who will now start taking on those responsibilities themselves. They will still have the reach back to the States if needed but they are going to start becoming self-sufficient and more autonomous and with that comes operating responsibility.
So, just like any of my other business, they own the customer satisfaction and the performance and as we move forward, for instance, with Make in India— this is a huge initiative that the nation has—we believe that Boeing has a great opportunity to bring an indigenous ecosystem that’s going to allow us to design, build and field aircraft such as fighters in the future and that activity will all report into Pratt.
Currently, your sourcing stands at about $500 million from India, which is almost what Airbus does. How will this grow?
Our goal is to continue on this trajectory in a way which brings productivity to Boeing (and) at the same time, creates requisite manufacturing base in the country—so, it kind of plays into Make in India; so, it’s a win-win for both. With that, you will continue evolution in terms of engineering presence, manufacturing presence, the deepening of our supply chain.
What more can we see in manufacturing and how will India move up in that value chain?
My vision is that you will see full-up final assembly at some point here, depending on what the nation wants to do in terms of product and service that they want to buy. You are already seeing us build Apache fuselages and those aren’t just for Indian Air Force, that’s for our Apache products that are going around the globe. So, you are going to continue to see an expansion and evolution of that.
What kind of business are you looking from India? You had offered the F-18s.
(There is an) RFI (request for information) right now from the Navy, we will be responding with what we believe is the appropriate configuration and we will let government work through the (process) and as and when RFP (request for proposal) gets released, we will respond appropriately that time. Our vision for the future is extremely bold but it is entirely doable.
How do you see India US-defence ties under the Trump administration?
I am very optimistic. Already in the weeks since our President has been elected, he has come and restated the enduring partnership between India and the United States. I am very positive, this is good for India and it’s a great partnership with the US.
Over a 5-10 year time frame, how would you envision Boeing in India? Do you plan to acquire any firms here to grow?
I won’t put specific targets; my expectation is, by putting t his framework in place and having local presence and having folks here, we will have that local decision making, not only are we going to grow our engineering and manufacturing capacity, but if there is an opportunity where we can enter markets and acquire technical advantages, we will continue to assess that, but that is part of running the business.