Sir Michael Arthur, President, Boeing Europe
SIMON LEVY talks to SIR MICHAEL ARTHUR, President, Boeing Europe
1) You are now President of Boeing Europe. What responsibilities and challenges does that bring and why did Boeing choose the UK to be the centre for its European HQ?
I continue to head Boeing in the U.K. and Ireland from London, while now also leading the company’s European strategy and operations.
The objective is to streamline our corporate presence and drive business growth across the region. The new structure brings Boeing corporate leaders across Europe into a unified team and integrates the company’s strategy development and government affairs initiatives at a regional level. Ultimately this will sharpen Boeing’s strategic focus on a critical region, make our operations more efficient and emphasize localized decision-making on a pan-European basis.
To be clear this is not our European HQ. There is no European Boeing HQ anywhere. We operate across Europe with various leaders and corporate functions positioned in the most appropriate place to support our customers, both external and internal
2) Since Dennis Muilenburg took over as CEO last year, what changes have you seen in leadership style and Boeing's top level strategy? What is his focus?
Dennis and his leadership team are having a big impact. They have set global ambitions for us at the start of our second century. They have set a very fast pace from the top of the company. There is a contagious enthusiasm and excitement about our future, which I find exciting and motivating.
Overall the direction of the company remains the same, our commitment to innovation and harnessing the unrivalled capabilities of our people to meet the needs of our customers worldwide, while the change has come in some of the methods. There’s an enhanced push to streamline operations to remain competitive, to work seamlessly across the many varied parts of the business and around the world, as well as build on our strengths to meet the needs of our customers.
3) Boeing had an extremely successful Farnborough on the defence side, with commitments for P-8A Poseidon and AH-64E agreed. How will these programmes now move forward? What opportunities do you see with the £100m P-8 training base? And will the AH-64Es be manufactured/or rebuilt in the UK or in Mesa, Arizona?
These are government-to-government agreements so we are supporting both the US and the UK, ensuring deliveries take place when our customers require and working with the UK to determine how to support the programmes fully here in this country. It is worth restating that the purchase of the equipment is only a minority of the overall value of the life of the programme. As we have shown with the Chinook for the RAF, we deliver services and support for the UK’s Armed Forces here and on the frontline, partnering with our customer and the UK supply chain to deliver high-value jobs here in this country, as well as the best possible value and capability for the MoD. Over the last five year period of the Chinook contract we delivered increased availability and the Government told us we saved £150m over the same time. We want to continue in that vein.
4) While P-8 and AH-64E will undoubtedly boost UK military capabilities, what do you say to people who might be concerned about the impact on the UK’s defence industrial capabilities?
Our industry is a global one. You’ll struggle to find any aircraft made entirely in one country. We constantly remind people of two things. Firstly, we are committed to the UK supply chain. We spent more than twice as much with UK suppliers in 2015 as we did in 2011. We committed with the UK Government at Farnborough to support additional enhancement initiatives for UK suppliers to help improve their competitiveness still further. That will deliver benefits on Boeing programmes but also on other projects. Secondly, we can meet the requirements of our customers here in the UK. That applies in defence, such as with the Chinook, or with the MoD on information services, and in the commercial aircraft field with the UK being the base for Boeing Commercial Aviation Services (Europe) Ltd. So we are building our own capabilities here in the UK and at the same time we are supporting the additional growth of our suppliers in this country too. With both the Apache and P-8A agreements there will no doubt be more decisions to follow from the Government on how they are supported here in the UK. We want to be a major part of that.
5) The company also strengthened its ties with the UK with a pledge to double jobs and offer more opportunities for UK suppliers on Boeing programmes. Can you explain those in more detail? For instance, wouldn't UK companies already be winning work if they were competitive enough?
That’s precisely the point. As we seek to maintain our competitive edge it is vital that we take that journey together with our suppliers. The UK is the third largest source of supply for Boeing after the US and Japan. So already the industry here is doing a lot right. Together our aim is to continue to improve and share the success throughout the supply chain. Part of our commitment to the UK is to share our vision of how we plan to maintain momentum in efficiency, in safety, in innovation. When suppliers understand that they can better meet specific requirements. We want to share that drive with our partners here in the UK. That way we ensure our long-term partnership with the UK continues to flourish, delivering enhanced prosperity to this country.
6) Boeing has doubled its UK workforce in the past five years. How does the UK figure in Boeing's future strategy? Services, support, R&D or even manufacturing?
Another part of our announcement with the Government at Farnborough was to double our employment in the UK again in the coming years. This will be across the business, both commercial and defence, and includes our subsidiaries here too. We’ll be making further announcements to flesh out the details, some of which will be with customers or partners. As you’d expect, most of this will be growing our existing industry leadership in services and support but I’d not rule out additional developments with research partners too.
7) Boeing has forecast a global need of 617,000 new pilots, 679,000 maintenance technicians and 814,000 cabin crew between now and 2035. What are Boeing doing to address this shortage?
Our 2016 Pilot and Technician Outlook does indeed make those predictions and we’re working globally with airline customers to train people to meet these requirements, including here in the UK where we have our Gatwick Training Campus providing Pilot and Technician training to customers from all over the world.. No one organisation will be able to do this alone but we’re playing a leading role in delivering the skills and updating capabilities to support the global demand for flying and the professionals that make that possible.
8) Are there opportunities for the smaller MRO’s to work with Boeing as you seek to compete through Boeing Gold Care?
Of course. As we grow our commercial aviation services business, particularly here in the UK, we grow our partnerships with customers and suppliers. As the OEM we bring our design knowledge, manufacturing experience, engineering expertise and fleet data to every service we provide. No one else has it. But we often work with partners to deliver our services and this area of our business is no different.
9) We are going through a tumultuous time in British politics this year. Do you see any negative effects from Brexit on Boeing's business in the UK? (Exchange rates, certification, moving staff around). Or do you think it could be positive for a US company increasing its global presence?
We see the UK’s future relationship with the EU as a matter for the British people and the UK Government. We will continue to grow our business wherever our customers are and to deliver whatever they want.
Don’t forget that Boeing has a long-standing relationship with the UK, with its Armed Forces and its air transport industry, dating back to the 1930s. We have doubled our direct employment in the UK since 2011 and hired, on average, a new employee per day in 2015. Boeing intends to continue this growth in the UK during 2016 and beyond. The UK remains critically important for Boeing, as a base for operations supporting airline and defense customers as well as a source of innovative suppliers and technology partners alongside sales opportunities. For example, in 2015 alone Boeing spent £1.8 billion with UK suppliers, more than twice the level of 2012. This supports 12,700 jobs in the tier one supply chain.
10) As the second strongest aerospace industry in the world, will the recent EU Referendum effect threaten the UK’s global position?
This is a significant moment, of that there is no question. But success or failure doesn’t depend on the decision that’s now been taken. Instead it’s how we now work to make the best of the decision. As a global business we’re conditioned to take the long-term view and to deal with changing political circumstances, we’ll continue to do that. For the UK industry to succeed, it needs to do the same. The Government will have many discussions with the aerospace industry and a clear overall picture is already emerging over issues that need to be addressed, such as the single market, EASA and environmental initiatives, not to mention aerospace research and defence and security cooperation. So could it threaten the UK’s global position? Yes it could. But however the UK’s relationship with the EU turns out, I see an opening up in our sector, of global trade, global supply chains and cross-border research cooperation. Life’s what you make of it and this is no different. As an industry we seek solutions to the hardest questions and challenges, so let’s get to work on this one.
11) Boeing has been committed to boosting STEM and to inspiring young people into careers in aerospace and aviation by supporting initiatives like the RAeS Schools Build a Plane Challenge and Falcon Initiative. What more, do you think, needs to be done?
We’re very proud of our UK community partnerships. Worldwide we are committed to playing an active role in the communities in which we operate and in which our employees live. Our industry offers such outstanding opportunities and our aim with our partners, such as the Society, is to widen the pool of people able to access these opportunities for their own personal success as well as that of the industry. The main challenge now as far as I can see is to tackle the influencers around young people. Parents, teachers and peers can have such a profound influence on school-age children. It is our role to show them the nature of modern manufacturing, particularly young women who are statistically much less likely to consider our sector. We’re potentially missing out on so many talented people by our industry not appealing to girls enough. It’s not dull or dirty or dangerous. It’s high-tech, safe, exciting and rewarding. The industry has a role to play in showing this to people first hand, either through site visits or engaging videos on social media channels where our intended audience gets its information. We need to go to them, wherever they are, our future depends on it, as does theirs. At Boeing in the UK we put this high up our agenda.
12) This year Boeing has celebrated its 100th Anniversary. What has been your personal highlight this year and looking back on its history, what product stands out most for you?
Our centennial has been such an incredible opportunity to celebrate the achievements of Boeing’s people worldwide since 1916, engage our partners, customers and suppliers in that success and inspire young people to join us for the challenges of the next 100 years. It’s tough to pick out one highlight but if I could be allowed a few then Farnborough and our centennial pavilion would be one. Hosting ‘Above and Beyond’ in Greenwich this summer was great as another way to inspire young people on an aerospace journey too. To celebrate our first 100 years we produced a terrific five-part documentary series. I’d recommend taking a look at that, then people can pick their own! Looking back on this century I also pay tribute to Joe Sutter, who passed away recently at the age of 95. Starting from scratch Joe and his team designed and built the world-beating 747 ‘Jumbo’ jet in less than three years. That’s an incredible inspiration for us going forward.
13) What is your opinion of the aviation, aerospace and defence challenges the new Prime Minister and her team should be focusing on?
For quite a while now Governments of all hues have understood the value that the aerospace industry provides to the UK economy. The continuity of approach at BEIS in partnership with other Government departments and the industry is very positive. Providing that constructive conversation – focusing on investment in new technologies and skills development - and the recognition of the value that we bring to this country continue then we have a framework for us to deliver on the nation’s priorities. Continuing as part of the wider family of European aerospace – such as EASA – is also vital.
14) What do you envisage will be the next major advancement in Aerospace/Space in the next 100 years?
I think it’s too tough to narrow down to just one. Right now we’re focused on delivering efficiency in our products for our customers but also in how we make them and develop them. But projects are already underway on hypersonic flight, autonomous flight, hybrid aircraft, the mission to Mars and many more. It’s a very exciting time to be involved in the industry and provides us with ample opportunities to inspire the next generation to choose our sector.