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N FEATURE STORY n FEATURE STORY At the crossMillennia-old tradition and modernity co-exist in today’s Saudiroads Arabia, a nation focused on economic development and diversification. Shown here is the capital city of Riyadh and the distinctive Kingdom Tower (at right), the nation’s tallest building and one often called the “necklace” for its distinctive shape. SHUTTERSTOCK.COM PHOTO 2 February 2008 BOEING FRONTIERS n FEATURE STORY Inside “What we’re seeing [in Saudi Arabia], as in other This comprehensive package of articles explores why Saudi Arabia is important to Boeing— and what Boeing is doing to position itself for long-term growth and success there. places around the world, is the Relationships, potential: Boeing continues to build upon its six decades of presence and expectation of partnerships relationships within Saudi Arabia. Page 43 versus simply sales.” One company: Why Boeing must take a cross-enterprise approach to doing business in Saudi —Shep Hill, President of Boeing International Arabia. Page 44 dex and is currently ranked first in the Aviation taking off: Saudi Arabia sees transportation as a “priority sector” for investment. Middle East. Here’s why that’s important to Boeing and its customers there. Page 46 That’s where global corporate part- Partnerships matter: Boeing is helping create a new Saudi university. Here’s why the com- ners like Boeing come in, doing far more pany is involved—and what it means for the future. Page 48 than just selling commercial airplanes and defense solutions to the nation. Instead, First-person perspective: How respecting the culture of Saudi Arabia relates to Boeing em- through a memorandum of understand- ployees representing a global company. Page 49 ing with the Saudi Arabian General In- vestment Authority, privately owned joint ventures such as Alsalam Aircraft Co., and A young, tech-savvy university partnerships, Boeing is leverag- ing its cross-enterprise expertise to make population. Interest in itself a valuable resource to Saudi Arabia. Make no mistake: Saudi Arabia is a international investment, key strategic and high-priority market for Boeing, and the company continues to economic development, build upon its six decades of presence and mutually beneficial relationships within diversification. That’s the kingdom. “What we’re seeing [in Saudi Arabia], why Boeing sees Saudi as in other places around the world, is the expectation of partnerships versus simply Arabia as a market sales,” said Boeing International President Shep Hill. “From Integrated Defense Sys- of extreme importance tems’ and Commercial Airplanes’ own standpoints, Saudi Arabia has the ‘3Rs’— BY MAUReeN JENKINS requirements Boeing can uniquely fit; the audi Arabia is a place of stunning resources to pay for it; and the relation- contrasts, where a rich, millennia- ships with Boeing that should give us a Sold culture with Bedouin roots co- competitive advantage.” exists with urban landscapes and famil- But it takes more than just technical and iar Western landmarks such as Starbucks business skills to succeed in Saudi Arabia, Coffee and KFC. located in the often-volatile Middle East. It’s a monarch-led country that owns 25 It’s equally important that Boeing people percent of the world’s known petroleum re- understand the kingdom’s culture—one serves and exports more oil than any oth- shaped by Islam, geopolitical change and er nation. Yet it’s seeking to move beyond shifting economic realities. its dependence on oil sales and equip its “To gain the know-how to operate in this young citizenry with broad-based techno- kind of environment is going to take time, logical skills and well-paying jobs that will experience,” said Ahmed Jazzar, president contribute to its pro-business economy. of Boeing Saudi Arabia. “It takes the right Because economic development and attitude and right personality. Some people diversification is a top priority for the see the differences as only negatives; oth- Saudi government, it’s encouraging in- ers see them as richness and diversity. ternational investment and private-sec- “For us to make Boeing global,” contin- tor growth. Plans to create six “economic ued Jazzar, “we need to work very hard to cities,” each with its own industry focus make this understandable. We have to be and located across the country, are help- accustomed to working in all these coun- ing lead the charge. In the past three tries and different cultures.” years, for example, the kingdom has ris- And Boeing is replicating this business en from No. 76 to No. 23 in the World philosophy around the world. n Bank’s “Ease of Doing Business” in- [email protected] BOEING FRONTIERS February 2008 n FEATURE STORY A Gulf ‘giant’ O T O. PHO C FT IRCRA A Workers at Alsalam Aircraft Co. perform inspections on an F-15 following a Programmed Depot Maintenance functional check flight. A Boeing-led consortium and local investors and companies founded Riyadh-based Alsalam 10 years ago. LSALAM A ships in the kingdom, Boeing leaders said One such current campaign is fleet mod- Saudi Arabia might be it’s especially critical the company take a ification of Saudi Arabia’s massive F-15 cross-enterprise approach to doing busi- fleet, which could include new fighters and IDS’ largest market ness there. Joint Boeing Integrated Strat- the upgrade of existing jets, said Michael egy Teams were created in 2005 to address Probasco, president of Boeing Middle East outside the US, but a the Middle East, India and Japan, ensuring Limited, which handles IDS business de- one-company approach business units were on the same page in velopment in the kingdom. “We want to key strategic world regions. replace their airplanes with new ones,” is critical for Boeing “The number of decision makers in he said. Such a replacement sale could be Saudi Arabia is very, very small,” said worth $10 billion. Then there’s the possi- BY MAUReeN JENKINS Boeing Saudi Arabia President Ahmed bility of selling 12 additional Apaches. Jazzar, and is the same for both IDS and “One of the benefits we have as a com- tanley Roth, Boeing International Commercial Airplanes products. Any con- pany is a nice portfolio of systems devel- vice president of International Gov- tract of $30 million or more has to be ap- oped for the United States that have been Sernment Relations, calls Saudi Ara- proved by King Abdullah Bin Abdulaziz. exported to other countries,” said Jeff bia “the giant on its side of the Gulf.” Moreover, HRH Crown Prince Sultan Bin Johnson, IDS vice president of Middle This strategically important nation Abdulaziz is the minister of defense and East and Africa business development. is the largest market for Integrated De- aviation—and the chairman of Saudi Ara- “That gives you a nice production run fense Systems products outside the Unit- bian Airlines. where Saudis can buy upgraded models ed States. With more than 100 F-15s, five “When they look at us,” Jazzar said, off the shelf.” AWACS (Airborne Warning and Con- “they don’t look at us as BCA or IDS. This Another Boeing advantage, said trol System) aircraft, seven 707 air refu- is one place where we really have to be one Johnson: Linking the AWACS, upgraded eling tankers, and 12 AH-64A Apaches team. I spend a lot of time with the teams Apaches and F-15s, so the Saudi services that are being upgraded to D models, the from both business units on the business have much better situational awareness. Saudi military force is well-equipped with culture in the kingdom. I help in the strate- “NCO (network-centric operations) can be Boeing platforms. gies for different campaigns so there’s an a big idea, so we’re real focused on phas- Although IDS enjoys strong relation- element that answers the (government) re- ing this in based on aircraft we have in the- quirements.” ater,” he said. February 2008 BOEING FRONTIERS n FEATURE STORY Security AND growth Probasco of Boeing Middle East Limited. built Tornado aircraft, among others. For sure, the often-volatile Mideast re- “You’re creating a job that’s not going to be “What we really want is to take this to gion faces threats from terrorism just like done in the States, yet you’re sustaining jobs the second level, assembling airplanes and other parts of the world, leading the king- in the States” by keeping aircraft lines open. getting into the manufacturing,” Fallatah dom to procure military products for self- In addition, Probasco said this partner- said. “We’d like to get into the support of protection. ship takes “the direction of moving Boeing airplanes in their totality and we have the “How do you stabilize the Gulf? You presence closer to the customer and facil- resources available to do this, including have to start with Saudi Arabia,” Roth itating solutions to the Kingdom’s prob- a lot of young Saudi talent who are eager said. “They want jobs for their young peo- lems.” It also helps the U.S. government’s to enter the growing aviation industry in ple and a sustainable economy. That fits relationship with a key Gulf ally, he noted. Saudi Arabia.” very well with the Boeing model—to be With a profitable business since 2001, Saudi officials have recognized the a partner, with an emphasis on the word Alsalam President and CEO Mohammed capabilities Alsalam has developed, Falla- partner. It’s not just about sales.” Fallatah said the company enjoyed about 10 tah said: “When they come and see with In January, IDS President and CEO Jim percent sales growth over the past two years. their own eyes what we are doing and what Albaugh attended and spoke at the Saudi While 70 percent of its work is performed on we have done, they cannot believe we can n Arabian General Investment Authority’s BoeingMEDITERRANEAN platforms, SEA AlsalamSYRIA services Sikor- do this in Riyadh.” Global Competitiveness Forum in Riyadh.
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