The Challenges of Developing and Producing Military Systems in Transatlantic Partnerships
General Jean E. Boyle
Vice President, International Business Development,
Boeing Military Aircraft and Missile Systems Group
On behalf of the Boeing Company, I would like to extend our appreciation and support to the men and women of the NATO forces. Every day we are reminded of the cost of freedom, and we owe our greatest debt to those who put their lives on the line for all of us and for our ideals. We are also constantly reminded of the responsibility we in industry and government must shoulder every day: we must never settle for less than the highest quality for the men and women who will use the products of our labors.
As Winston Churchill said before the First World War, The courage of our warriors is as great as in the days of old. But there is no reason we should expect them to fight with inadequate means. Indeed it would be immoral and inexcusable for all of us, in industry as well as government, not to do all that is in our power to deliver the best possible systems to our armed forces at affordable prices and with a minimum of delay. And that is what I would like to talk about today.
DEVELOPING MILITARY SYSTEMS THAT MEET THE NEW THREATS TO NATO
As the dawning of the new millennium approaches, the nations that make up the Alliance face many complex challenges regarding their ability to defend their people. Just one of those challenges is the development and production of military systems. How can the members of NATO maintain healthy industries that can provide the best possible systems at reasonable cost to their war fighters? How can these nations unlock the potential of defense procurements to not only provide for national security, but also to invigorate economies, share technologies, and stimulate growth?
There is so much to consider. The pace of technological innovation continues to accelerate at breathtaking speed. Tightened defense budgets around the world make it a challenge to achieve economies of scale, and to apply sufficient resources to research and development. Meanwhile, real threats to NATO security remain, taking new forms and requiring new means of response.
When we look at the 50 years of NATO, the recent change is remarkable. An organization established as a common defense against a monolithic threat is now a partnership for the enhancement of mutual security for the Euro-Atlantic region. NATOs challenges now clearly include out of area operations, peacekeeping and peace making, as well as determining the proper relationship between NATO and other involved organizations such as the United Nations and the European Union. The Alliance must also continue to evolve its thinking with respect to expansion and the integration of new members into its sphere of influence.
Yet the requirements of Article 5 remain. A threat to one is a threat to all. The members of NATO are joined in a renewed and expanded spirit of coordination, partnership, coalition-formingand then action, if deemed appropriate. It is NATOs mission, therefore, that has changed, demanding that NATO forces become more mobile, adaptable, and responsive to take on these tasks in a coordinated manner.
DEVELOPING WEAPONRY THROUGH MILITARY AEROSPACE PARTNERSHIPS
As NATO operations evolve, the weapons that NATO uses must also evolve. The focus is on communications and information technology and on combined operations among coalition members. Renewed emphasis must be placed on ease of maintenance and operations in areas where traditional logistics and supply links may not exist. For industry, this also means focusing on new technologies and developing more flexible solutions that are more responsive to changing customer needs.
But our customer nations are facing other challenges that impact national security. We see this in our meetings with chiefs of air forces, ministers of defense, ministers of economy, prime ministers, and members of parliament. They want large defense procurements to satisfy military needs, but they also want these programs to benefit their defense industries and stimulate the greater national economy. They want to know how partnering with major aerospace companies can provide solutions to the vexing challenges of rationalization, privatization, and technological development.
So while industry pursues solutions that meet the requirements of NATOs missions of today and tomorrow, we must also better understand the political, social, and economic considerations that play an integral role in defense procurements. The most comprehensive, productive, and beneficial industrial solutions to these issues are true discriminators for our customers as much as the capabilities of individual airplanes, helicopters, or missile systems are. A driving question our international customers ask today is: how can military procurements be best leveraged to achieve political and economic goals?
This is the world in which we live and work. But I dont stand before you with all of the answers to these questions; rather I offer some reflections during this ideal opportunity to share ideas and listen to the needs, requirements, and concerns of our customers. Together, we can ask the questions, and search for the solutions.
PROVIDING INTEROPERABILITY AND VALUE
As we continue to strive for answers, however, there are certain signposts that we must follow to keep from losing our way. One important signpost is this: it is absolutely essential that we in industry find ways to provide Alliance members with interoperable equipment that provides the best value at the lowest possible cost. We owe no less to the men and women defending our freedom and our collective security. To do less would be a dereliction of our duties.
Interoperability is a critically important concept. The use of coalition forces demands the use of systems that communicate with one another and share information seamlessly. Value speaks for itself. We must be relentless in our pursuit of the highest value at the lowest cost. Both of these conceptsvalue and interoperabilityare signposts that direct us to where we must go from here. They direct us to new levels of transatlantic linkages. They also lead us down a clear path unencumbered by artificial obstacles such as protectionism, outmoded security barriers, and unneeded regulation.
Just as we have learned to rely upon one another for common defense through the 50 years of NATO, so now we must surely come to rely upon each other for the acquisition of the means of that defense. It wont happen overnight, but we must move in that direction if we are to achieve the best value and true interoperability.
THE NEED FOR COMPETITION AND COOPERATION
If we are customer driven and value driven, we will be ready and willing to pursue and reap the benefits of cooperation and competition that will come from the freedom to pursue transatlantic partnerships. And let me be clear. We need bothcompetition and cooperationbolstered by freedom within the marketplace to pursue either option, depending on our strengths and weaknesses and our goals of satisfying our customers and stakeholders. We need cooperation because budgets have shrunk and because no American or European company has a lock on the information, resources, technologies, and market access required to take advantage of tomorrows opportunities. Transatlantic cooperation will help ensure that future systems will be interoperable between coalition partners, and that military customers will realize the benefits of economies of scale.
Competition is essential as well, because there is no better way to stimulate innovation and to remain vigilant in the drive for higher quality, lower costs, and optimum value. The Joint Strike Fighter (JSF) program is an outstanding illustration of vigorous competition taking place within industry today. The two JSF industry teams are pursuing distinctly different concepts for meeting a single set of requirements focused on performance and value. And they are pushing each other to excel. Competition is encouraging innovation and experimentation, as well as efficiency and cost reduction.
Industry can draw from the benefits of cooperation and competition if we allow the market forces of shareholder value and customer satisfaction to lead us to the objective of providing the best value to our customers. This is the path to ensuring the long-term health of our aerospace industries on both sides of the Atlantic. But aerospace companies, from the west coast of the United States to the eastern borders of Poland and all points in between, can accomplish this objective only if they have the freedom to decide whether to work together or to push each other through competition.
We must avoid the temptation to form cumbersome, artificial barriers that will cause our defense industries to become structurally unable to be responsive to NATOs new realities. Isolated European and American defense industries would threaten the very foundation of coalition warfare. As John Hamre, the U.S. Deputy Defense Secretary, said recently, we face a grim future if the two sides of the Atlantic drift their separate ways and are not able to fight together.
Therefore, governments must strive to create an environment in which industry can freely form transatlantic teamsteams that will compete in pursuit of the best solutions and partnerships to meet military, political, and economic goals in each country. This type of environment means there must be only essential limitations on technology transfer and transatlantic cooperation. We agree with John Hamres assertions that obsolete security restrictions and technology regulations must be reviewed and streamlined or eliminated if needed. Only in this way can industry focus on the crucial objectives of customer understanding and customer knowledge. And only in this way can technologies be shared and access to markets be gained. Companies would be able to focus on their strengthsbecoming, in fact, centers of excellence in specific technologies, systems, and core competencies that are needed in the marketplace.
As in other industries, such as oil and automotive, transatlantic military-aerospace partnerships will provide the best means to enhance competition, improve efficiencies, and provide access to critical markets. Without these partnerships, our individual national industries will risk locking themselves out of future opportunities.
As we know, rationalization at the top level of U.S. industry is completed. Now we are watching the rationalization of the European aerospace industry with great interest. We hope this process, wherever it may end, will leave sufficient flexibility for the level of transatlantic interaction that I have just described. This will lead us to the benefits of true globalization, with customers and suppliers communicating and working together more closely in pursuit of the ultimate goal of delivering the best value and highest quality for our customers money.