US aerospace and defence giants pin hopes on region
Boeing hovers over UAE Chinook deal
FARNBOROUGH // Boeing hopes to sell as many as 16 Chinook helicopters to the UAE within the next year as part of a defence procurement package worth US$2 billion, (Dh7.34bn), according to executives of the aerospace company. The pending deal for up to 16 CH-47 Chinooks is being brokered between the UAE and US governments as part of a package that is expected to include equipment, parts and training.
Separately, Boeing officials said they were working with Abu Dhabi officials to help aerospace manufacturing companies expand into producing parts for military aircraft. Once concluded, the $2bn package would mark another major contract win for the US defence and aerospace giant, which has previously signed deals for other helicopter and transport planes with the UAE and has pinned hopes on the region to help it generate new revenues amid declining defence spending in its traditional home market of the US.
"2011 is the target we are hoping for," said Paul Oliver, the regional vice president of international development for Boeing, regarding the Chinook sale. Last year, Boeing signed a contract with the UAE for six heavy-lift C-17 military planes, in a deal estimated to be worth $1.2bn. The contract gave the C-17 a crucial boost as it sought to find enough buyers to keep the production line open. Its current order book only extends to late 2012.
The deal is a prime example of the UAE helping not only to preserve US jobs amid the downturn but also to create them, said Dennis Muilenburg, the president and chief executive of Boeing Defence, Space and Security. The US government, under the administration of President Barack Obama, is pushing an export campaign to protect US jobs during the recession, which includes senior Boeing executives on the export promotion council.
Mr Muilenburg also hailed Boeing's relationship with Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, as an example of the types of alliance building Boeing hopes to forge in the Middle East. The Mubadala subsidiary Strata Manufacturing is building a facility in Al Ain to make aircraft parts for Airbus and other customers and Boeing planned to award work packages not only to its civilian aircraft but also for military aircraft, he said. "It's a little too early to discuss specific aircraft programmes but the talks are going well."
The UAE is the world's largest importer of US arms and aerospace technology. It is expanding its air force fleets as it seeks to take on a growing humanitarian and peacekeeping role in the region. It is one of the few Arab nations with a peacekeeping force in Afghanistan and flies goods and aid throughout the Muslim world. "The humanitarian aspect of our planes is almost as big a driver as anything else," Mr Oliver said. The UAE operates a fleet of 12 Chinooks built in the 1970s that it bought from Libya in 2003, although these were produced under licence by AgustaWestland of Italy, not Boeing.
The new sale would help the UAE to transport equipment and troops in the region and support US and NATO airlifts in Afghanistan, according to the US Defence Security Co-operation Agency. Boeing has extensive relationships within the Middle East but Mr Oliver singled out the UAE as a "discriminating customer" whose actions were often replicated by other neighbouring states. "They tend to shop for the best," he said. "The countries in the region really watch what they do."
Another competition Boeing has entered in the country is one to supply the UAE Armed Forces with an integrated air defence programme, or battle management system. The product is basically a computer network that will gather radar data to co-ordinate the launch of missiles and fighter jets and will see Boeing line up against its traditional rivals including Raytheon, Thales, Lockheed Martinand Northrop Grumman. Northrop is the incumbent having supplied the UAE's first system.
"We are in the technical evaluation phase," Mr Oliver said. "They are looking at all proposals from technical aspect," he said, adding that he expected to have a "clear idea of where we stand in the competition next year". email@example.com