Sir Michael Arthur, president of Boeing Europe and managing director of Boeing UK & Ireland, spoke exclusively to The Manufacturer about the firm’s durability, the implications of Brexit and its plans for the future.
Congratulations on celebrating 100 years of Boeing. What has been the secret behind the company’s longevity?
At Farnborough 2016, Boeing hosted a centennial pavilion, where the 11,00 visitors that the show attracted, could learn about our history. The exhibition documented the past, present and future of areas like materials, from wood and canvas to metal, composites and micro-lattice; as well as propulsion, from propellers and jets to hypersonic scramjets and rockets.
The secret to the permanency of Boeing is a spirit of tenacity, vision and innovation. We are always looking at what’s next and this runs through every aspect of the company. As staff, we have incredible respect for the monumental achievements of the people who went before us, and we aim to continue this for the next generation.
Continually asking the question ‘what’s next?’ ensures we don’t rest on our laurels and stay a step ahead of the competition. Asking that question also inspires the next generation to come with us and contribute on that journey too. We’ll need them to maintain our momentum into the future.
Boeing’s centenary is a great opportunity to inspire young people to consider a rewarding career in aerospace. Our people are truly vital, they embody that spirit of tenacity, vision and innovation and our centenary celebrates those who went before us, engages our current employees and partners, and inspires future employees, suppliers and customers to maintain our shared success.
How do you think Brexit might affect the businesses and other countries’ view of the UK aerospace industry?
It’s still difficult to say. There’s a lot of uncertainty, with a lot of water to run under the bridge between now and a final outcome, and what that might look like.
You can view an infographic outlining the £1.8bn UK-Boeing partnership at BOE10549 Infographic landscape.
Boeing remains committed to its customers worldwide, including in the UK and across Europe. Our partnership with the UK dates back to the 1930s and we have doubled our direct employment and supply chain spend here since 2011. We will continue to grow our business in support of airlines and armed forces to meet their varied needs, and we have an ongoing job to do in the UK, delivering for our customers. That will not change.
We will evaluate the implications of the Brexit decision, which we respect, and tailor our business approach to the new situation in the UK, in Europe and worldwide as it evolves. As a global business, we constantly manage changes in political circumstances and we will continue to do so.
Boeing intends to continue growth in the UK into next year and beyond. We are growing our operations in many other countries in Europe too. The UK remains critically important for Boeing, as a base for operations supporting airline and defence customers, as well as a source of innovative suppliers and technology partners, alongside sales opportunities.
In 2015, Boeing spent approximately £1.8bn with UK suppliers, more than twice the level of 2012. This supports 12,700 jobs in the Tier 1 supply chain. The UK is Boeing’s third largest source of supply after the US and Japan, and we remain committed to our partnerships in the UK and the growth of our business.
Do you foresee challenges to the above initiative? If so what are they and can Boeing navigate them?
We share the government’s plan for long-term growth and prosperity in the UK and our joint announcement at Farnborough on that demonstrates our ongoing commitment. None of us can predict the future, but our industry is a long-term one and we have learned from previous changes. We are often able to use that long-term nature to ride out some short-term challenges.
Positive results at the end of Summer 2016 are the outcome of decisions taken 20 years or more ago, and the decisions we are taking now will have long-term positive impacts. Our commercial aircraft current market outlook for the next 20 years projects a demand for 39,620 new planes over the coming two decades, an increase of 4.1% over last year’s forecast. We estimate the total value of those new aircraft at a phenomenal $5.9tn.
Across our commercial and defence businesses, we have more than 250 UK suppliers. We spent £1.8bn with them last year. Our announcement with the government includes activities to support UK supplier competitiveness in the years ahead; so with this growth to come and potential for UK suppliers to benefit still further than they do already, it should be a win-win situation for Boeing and our UK partners, including our customers.
There is talk of Boeing designing a mid-range plane for 200 or so passengers, filling the gap between the 737 and the 787, how is this taking shape?
We potentially see a need for an aircraft slightly larger than the 757, but a decision won’t be made until end of the decade. There is no change to our development profile for the balance of the decade, we are focused on the 737MAX, 777X and 787-10.
We continue to talk with our customers and evaluate the best low-risk solution around production system architecture, technologies and market needs for any new development programmes. Overall, the 737 MAX family with multiple minor models is very well positioned to offer a network solution to meet the single aisle demand. The 787-8 has the potential to serve the upper-end of the middle of the market space. All of this said, if the market demands a response, we’ll be ready.
How will Boeing meet the challenge of globalisation and harness its opportunities?
We’ve set ourselves the goal to be an enduring global industrial champion. But it would not be possible to do that successfully without a strong local presence in key markets. For many decades there was a ‘travelling salesman’ approach to non-domestic markets; ‘come in, do the deal, go home’. Not anymore. We are localised in the UK, employing locally-hired people and serving our British customers. We run our local presences similarly in other key parts of the world.
Furthermore, if we do set up a new capability and need expertise from the US to do so, those people train local colleagues to do the job so that when our colleagues from the US head home, they leave behind a new capability for the customer, company and country.
That, I think, is the way to succeed globally; have a global mind-set and be able to capitalise on opportunities where they may arise with world-leading products. Develop those products with a worldwide supply chain to leverage additional expertise and local customer engagement. But above all, be close to your customers. You can’t do that without a strong local presence alongside a global reach to support them wherever they are.