MURDO MORRISON / LONDON
Former diplomat aims to target acquisitions, seek new suppliers, reduce costs and establish international image
What do you do when you want to transform your company's image from one of an all-American manufacturer of airliners and military aircraft, to an international supplier of "intelligent solutions" in everything from network-centric warfare to in-flight entertainment? For Boeing, anxious to make itself less vulnerable to economic slump, and deepen its "global footprint", the answer lies partly in appointing one of the USA's top career diplomats asinternational troubleshooter.
Tom Pickering, who joined Boeing last year as vice-president international relations after a stint as under secretary of state for political affairs in the Clinton administration, says his job is not to lead the company's sales efforts but rather to target possible acquisitions, suppliers, technology partnerships and joint ventures, and "put together the long-term marketing perspective". The other main role is to be the public face of Boeing at everything from presidential receptions in Rome to talk shows in Tokyo.
Pickering is appointing 10-12 country and regional vice-presidents in key markets. So far, chiefs have been appointed for Australia, Italy, Russia, South Korea and Spain, with announcements imminent for China, the European Union, France and Germany. That the appointees so far have been almost entirely native ex-diplomats, politicians and senior civil servants indicates the job Boeing wants them to do: open doors, exploit local knowledge and call in favours in a way a USsalesman could never do.
Pickering, who reports directly to chairman Phil Condit, acknowledges hard-edged commerce will never be far from the minds of these former mandarins and ministers. "They will be there to assist the sales guys," he says. "We will be heavily focused on the business units; our motto will be: what help can we give the business units today?" But their role will also be to scour their territory for small companies or research institutions doing innovative development work, and to size them up as possible suppliers or partners.
The question of offsets for military deals are therefore crucial, says Pickering. "We can get a lot smarter than in the past in finding cost-effective producers, by going in early and identifying the really efficient guys. That way, when a government says you've got to spend money in Podunk because there are people there who need to be kept in jobs, you've already done the offset, created better jobs and helped them upgrade their technology."
The search is also about reducing Boeing's massive costs by finding offshore suppliers of everything from "brooms to services", says Pickering. It may be bad news for Boeing's US suppliers, but the company has already started casting its net wider, with reverse auctions using the Exostar internet aerospace exchange, which it owns with BAE Systems, Lockheed Martin, Raytheon and Rolls-Royce. Here businesses bid to supply goods and services at the lowest price, and it has already had a marked effect on Boeing's costs, says Pickering.
Boeing admits its image has not always helped sales in countries where anti-US sentiment is rife. Privately, executives say part of Airbus's Asian success has been because it is seen as an international company, with an interest in boosting local economies. Pickering's track record appears to make him ideal to head a Boeing charm offensive in some of the world's more volatile regions - he has been US ambassador in El Salvador, India, Israel, Jordan, Nigeria and Russia among others.
One step in Boeing's transformation was apparent at last month's Farnborough air show. The company has made much of moving away from saving up airliner deals to announce at air shows - because the practice is false, it claims. However, some believe it is because Boeing is losing the order race with Airbus, and has no new civil aircraft to sell. But Pickering says: "We've gotten away from air shows as high drama. It's about ideas and concepts - you can't see software."
So where does Pickering see the new-look Boeing in 20 years? "Boeing is a company of great ideas, knowledge and efficiency, known for its processes as much as its products," he says. "Could we end up a manufacturer of washing machines? Probably not. But we can marry up the information revolution and our technology, with the ability to move people and goods."
Boeing must become more international, he adds. Despite the promise of a growing US Department of Defense budget, US airlines' collapse in fortunes has made Boeing vulnerable in a market it has relied on for decades. Many say the post-11 September slump has prompted Boeing's move to portray itself as a company in transition, but Pickering insists it is part of a long-term strategy. A week spent meeting the industry at his first Farnborough, has "reinforced the notion that any aerospace company not looking globally is missing a whole lot of opportunities", he says.
Source: Flight International