Despite a slew of scandals, defense acquisition issues and scorching heat in India’s capital, Mark Kronenberg, vice president of international business development for (BDS), remains upbeat about business opportunities in the South Asian nation. For Kronenberg, who leads international marketing and sales for BDS, India already is a success story for . Kronenberg sat for an exclusive interview with Aviation Week’s Jay Menon recently in New Delhi and discussed why he thinks Boeing is entering banner times in India.
AW&ST: What are the opportunities that Boeing is eyeing in India?
Kronenberg: We will look at additional P-8Is and additionaland potentially even more Apaches and Chinook down the road. There is a tremendous services business in support of all these platforms and quite frankly services can be about two and a half times more of a revenue generator than you do from the platform if you win the business. So, I think what we have got is a situation where there is going to be significant number of Boeing platforms in this particular market. We can leverage all the services; necessitate all the logistics and training associated with that. We will have to partner with the customer, with the industry here in India to provide services. These platforms are going to be operational probably for the next 35-40 years. It is not all about the airframe, it’s about the systems that are stuffed in the airframe and with the amount of technology you can insert into these platforms year after year. They are going to be quite capable 30 years from now.
AW&ST: When do you think you can start delivery of C-17s?
Kronenberg: The C-17s will be delivered in June 2013 andaircraft also next May. So, things are going well with both programs. In the case of P-8I, the U.S. Navy, the Indian navy and Boeing already have several program management reviews. It is the same in case of C-17s – the U.S Air Force, Boeing, working through the program. We have got people on ground to get these inbuilt. We are just making sure the program is on track so that the customer is happy and these things show up on time, which they will.
AW&ST: Has India shown interest inOsprey tiltrotor aircraft?
Kronenberg: We think there is a requirement here for the V-22s. We are going to highlight the V-22 at the Farnborough Air Show. We have had a lot of interest among several international customers and I wouldn’t be surprised if India is also one of them. It is quite an interesting capability once customers get to see it. It all has to do with the speed by which you can get there. Chinook CH-47 is a great aircraft, a great helicopter, but you cannot do anything about the speed. V-22 is a whole different level of what it can provide, it goes about 300 knots. It’s the only vertical lift platform capable of rapid self-deployment to any theater of operations, worldwide.
AW&ST: But have you heard anything on V-22 from the Indian side?
Kronenberg: I think they have expressed general interest. But there haven’t been detailed briefings, as far as I know. But we will have at the Farnborough Air Show. The Indian navy will take us up. We will invite all our international customers to take a flight.
AW&ST: What about Medium-range Maritime Reconnaissance aircraft for the Indian navy?
Kronenberg: We are still trying to see where we are with the [request for proposals]. We will see what happens when that comes up, the P-8Is and their requirements and then we’ll make a decision later. From the standpoint of commonality with the Indian navy that already has, in terms of the missions, I think we could do with fewer aircraft than already stipulated in the [request for information]. And it clearly doesn’t necessarily have to be the same equipment. You can modify the missions. It doesn’t necessarily need to have the same things that P-8 has like maritime patrol and submarine warfare. We will see what the RFP says before we decide.
AW&ST: The U.S. Senate Armed Services Committee this month released a report on counterfeit electronic parts. Has it cast a shadow on India deals since it involves the C-17s, which India has ordered?
Kronenberg: No. Quite frankly, we have had such issues with counterfeit parts before – both commercial and defense. It is connected to suppliers. It is pretty far down. You get issues where your two suppliers doesn’t catch it. But Boeing supply-chain management organization does catch it. It is a pretty simple fix - we just replace the counterfeit parts. We work with the [U.S.], in a cooperative mood, to make sure we have got our problem resolved. We don’t want counterfeit parts, more than anybody else on commercial planes or military aircraft. Yes, it did involve C-17s initially, but there are no failures from our side. We screened it and caught it.
AW&ST: Has India shown any concern about it?
Kronenberg: No. We haven’t heard anything from the customer but if they do, we will certainly walk them through what we do. But when the C-17s appear next year, there won’t be any counterfeit parts on the aircraft.
AW&ST: What is the next big thing from India?
Kronenberg: We are very positive on Apache. We are all hoping we will get something by the end of this year. It is a pretty big deal. Apache has done quite well internationally. This will be AH-64D Apache Block-III.
AW&ST: The Indian defense ministry is getting slammed with numerous allegations of scandals again, just as ministers were promising toward modern professional ministry. How concerned is Boeing that this might slow down the $32 billion worth of business opportunities you have identified before?
Kronenberg: We work in a transparent manner and our relationships with our Indian customer has been very transparent and open. I don’t see any difference with them than between our U.S. customers and our other international customers. We have our differences, but we should try to bridge our differences in terms of how the contract works. It hasn’t impacted anything we have done. It’s been a very good relationship with the services that we are doing with them.
AW&ST: What are the prospects that the Medium Multirole Combat Aircraft will be reopened? What is the latest sentiment in Boeing?
Kronenberg: The customer has spoken. We respect the decision of the customer. We are obviously disappointed. We thought F-18s would be great. I spent a lot of time all over. We think we have some great prospects in the Middle East for the F-18s. Quite frankly, as thecontinue to slip, the Australians moved out their 30 buyers. I think we’ve got some opportunities among F-35 partners. As it slips, customers said we have the requirements right now instead of F-18s. We feel very good about where we are on the F-18s. I think this customer made a decision to go with the and . We wish them luck!
AW&ST: What about offsets?
Kronenberg: I think we are [going] in the right direction. Offsets were new to India. Think about 2006 when they had an [earlier] offset policy. [The Indian ministry of defense has] been open to our suggestions and recommendations. When I say open, it is not just Boeing, but also American companies and European companies. The ministry of defense has been open to our suggestions. I think this is great, that will enable us to work more effectively with Indian suppliers. I think that’s the way it has got to be seen. Sometimes people use it as a binary thing. We see it as a success for the Indian industry, a success for us.
AW&ST: Are you meeting some Indian suppliers?
Kronenberg: Yes, we are in touch with basic customers just to reaffirm Boeing is committed to India for a long term. We have been saying that for years – we mean it. We are very happy about the prospects next year and these deliveries. We continue to work with Indian suppliers and try to get Indian suppliers into larger supply chains. Quite frankly, I have said this with other offset customers that, eventually, I want you to go with more offsets. This is not just with India but also Saudi Arabia because what you really want is for the Indian suppliers to say we are winning work from Boeing, we are winning work from the, we are just winning work. That’s really when you measure the success of an industrial participation program. We have examples where it is not just about winning offsets requirements but working with Boeing is so good. That’s a success story.
AW&ST: You mentioned about UAV Systems:
Kronenberg: Insitu has provided information about bothand Integrator to a number of services in the Indian armed forces. Boeing sees the employment of UAVs as a key contributor to Indian homeland security. Employment of UAVs with greater than 24-hour endurance enables persistent surveillance capabilities for extensive border regions and specific areas of interest.
AW&ST: What are the other prospects in Asia?
Kronenberg: India is the primary market. There are two major competitions in Korea for example,– one deal with the fighterand also Apache. We will make a decision at the same time. We will get to a decision point by the end of the year, hopefully, in terms of closing down something and we are hoping in the case of Korea, we will make a decision for heavy attack helicopter requirement.