NEW YORK—Boeing’s [BA] defense arm hopes to more than double the percentage of revenues it gleans from international sales in the coming years, a top executive said yesterday.
Jim Albaugh, president and CEO of Boeing Commercial Airplanes, said the company’s Defense, Space & Security (BDS) unit is eyeing “a lot of countries that have the wherewithal to spend on defense equipment.”
“Our plan is to take the international percentage of revenues for BDS from about 10 percent of where they are today up to around 25 percent in the next 10, 15 years,” he said. “And I think we can achieve that.”
He spoke at the Jeffries 2011 Global Industrial and Aerospace & Defense Conference to jittery investors, who expressed concerns about the stock market’s poor performance this week, Washington lawmakers’ attempts to control the federal deficit, and up to $1 trillion in defense-related budget cuts that could come over the next decade.
Albaugh acknowledged Boeing’s defense arm, which he previously led, is going to face “a tough marketplace” in the United States in the near future. He maintained the company is well positioned in the sense that it has the contracts for the Air Force’s KC-46A refueling tanker and the Navy’s P-8 Poseidon multi-mission maritime aircraft, and its AH-64 Apache and CH-47 Chinook helicopters are still in use by the Army.
“So what they have are mature (Boeing) programs, (with) known capability and known costs; I think they’re very well positioned in the United States,” Albaugh said. “But I think more importantly than in the United States, there are a lot of opportunities around the world, and a lot of countries that have the wherewithal to spend on defense equipment.”
He said there are “a lot of international opportunities,” and ticked off countries ripe for more purchases of Boeing products including Saudia Arabia, the United Arab Emirates, South Korea, Japan, and Australia.
In this country, Albaugh said he does not see many new-start programs coming from the Pentagon anytime soon, and argued it should support the programs it has.
“The environment today is much different than it was in the late ‘80s when they had to come down in defense spending,” he said. “In the late ‘80s all the equipment was new. F-15s were new, F-16s were new, the Arleigh Burke destroyers were new. The Abrams tanks were new. It was a completely different situation than we have today.”