Boeing to expand international defense sales

Posted June 4, 2010 at 6:13 a.m.

Reuters | U.S. aircraft and defense firm Boeing said on Friday
it expects to boost its international sales to compensate for a
slowdown in its home market as the U.S. government tries to rein in
defense spending.

Dennis Muilenburg, President and CEO of Boeing Defense, Space and
Security, told reporters in Singapore that international sales would
grow to 20-25 percent of total revenue in the next five years from 16
percent in 2009.

He later told Reuters that the overall business would grow at a “moderate” pace, similar to the single-digit percentage rate that it had seen in the past five years. Last year Boeing’s defense business recorded around $34 billion revenue, up around 5 percent.

“What you are going to see is kind of a moderate growth that you’ve seen over the last five years,” Muilenburg told Reuters in an interview.

He also said support from Asia Pacific markets, which account for half of its international sales, and the Middle East should compensate for the slowdown in the United States as a result from tighter defence spending.

U.S. Defense Secretary Robert Gates’ new drive to rein in Pentagon spending may target the very operations and maintenance accounts defense companies were counting on to offset slower demand for new weapons systems.

“You will see the U.S. services (business) will be relatively flat to slightly growing, but growing faster at the international level,” Muilenburg said, although he added the overall trend was pretty stable.


Boeing aims to sell more fighter jets such as the F-15 and the F-18, CH-47 Chinook transport helicopters, AH-64 Apache attack helicopters, aerial tankers and transport planes to South Korea, Japan, India and Australia.

Korea and Japan are looking to buy the next generation of fighters where Boeing’s F-15 products are competing with more advanced models such as Lockheed Martin’s F-35 and F-22, which were jointly developed by Lockheed Martin and Boeing.

Muilenburg said he also expected more sales of C-17 transport planes to India and other international markets.

Last year, the United States ordered 10 C-17 aircraft which will keep production of that model occupied until 2012. India has submitted a letter of request for 10 C-17s. If that request became a firm order, it would extend the C-17 line by another year.

Boeing’s C-17 has long been a lightning rod for controversy, as the Pentagon pressures Congress to stop ordering the plane. Gates has argued that it already has more than 300 large transport planes.


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