Boeing’s Vice President of Training Systems and Government Services, Global Services & Support was interviewed by Group Editor Marty Kauchak on June 19, 2013. The content of this wide-ranging interview is provided in its entirety.
MS&T: Good afternoon and thanks for taking time to speak with MS&T. Last month another industry team was awarded the US Air Force’s KC-46A Aircrew Training System (ATS) contract. Update us on your latest information regarding the Air Force customer's plans to award the contract for the KC-46A Maintenance Training System.
Mark McGraw: We were disappointed by the outcome of the KC-46 ATS competition. We really did give the Air Force a really good proposal. While we received a great score so did a lot of the others. Some of the discriminators we had didn’t earn us any extra credit. We’re moving on from that.
On MTS, all we’re hearing is that the program is not on the service’s roadmap for next year.
MS&T: This week Air Force Chief of Staff General Mark Welsh said at the Air Force Association breakfast that his service really needs a new trainer to replace Northrop Grumman’s T-38 trainer, which is on average almost 45 years old. The general said the Air Force may have the trainer by 2023 or 24. The T-X program is expected to be worth some $11 billion for about 350 planes. We believe you and your colleagues in Boeing Military Aircraft are watching this program.
MM: We expect the program to move forward. It’s just a matter of the exact timing. Because it is such a critical program for the Air Force we’re very focused on it as well. This would be a “one Boeing” collaboration, between the aircraft side of the company and the services side as well, including training systems.
MS&T: After your high level review of the Obama administration's FY 2014 Pentagon budget request, what are some other near-term business opportunities your division may be pursuing?
MM: We’re watching this very closely especially as we approach the second half of this year because that is when we might start seeing things – contract awards moving out a bit to the right because of the civilian furloughs on the customer side, for example.
We’ll also have to look and see how training comes out in the budget. One would expect that if we want to save money and fly less, that there might be more training in the ground-based training systems that are out there which could create opportunities. But at the same time there could be fewer numbers of students coming through to learn – providing a little balancing there.
But we’re really focused on international growth. Dennis [Muilenburg, Boeing Defense, Space & Security President & CEO] is committed to 30 percent of our revenue coming from international customers. We’re well on our way to meeting that goal. We have opportunities in the UK, the Middle East and Asia.
Some of those are some very interesting, long-term training opportunities. And let’s use the Middle East as an example. You have Saudi Arabia that has purchased many new aircraft and systems. Qatar is doing the same things as are others – creating a huge demand not only for aircrews but maintainers. They’ve looked at their existing infrastructures for creating those pilots and maintainers and the capacity is not there. They are looking at industry partnerships to do everything from ab initio training, right out of high school, all the way to training on the actual platform. That opens up a lot of opportunities for us.
MS&T: It appears these requirements and opportunities are hitting the “sweet spot” for your division in terms of your many corporate competencies.
MM: Yes, and we’re frankly moving beyond our previous focus on selling training devices. We’re moving forward to just focusing on training, with devices as being part of it.
What really carries a lot of weight, especially on the international market, is the Boeing brand. If you buy a Boeing platform, who better to train you on that platform than the folks who built it? While domestically that isn’t treated as a discriminator, it really is on the international side. That Boeing brand can open many doors and sell the products and services.
MS&T: The US military is shaping its training doctrine and strategy to move beyond more than 10 years of supporting counter-insurgency-like operations in Iraq and Afghanistan. How is Boeing's product portfolio keeping pace with the US DoD customer's efforts to expand its training mission sets to better support future operations?
MM: As the services move from operations to more of a peace time environment, their training needs to change a bit. When the pace slows down, how do you keep those operational skills honed for the future?
We’re trying to stay close to all of our military customers to meet these needs.
We’re having a lot of dialogue with them. They’re very focused on value with the budget pressures. We’re trying to figure out how we can do more with less with the potential for different business models, from how we can provide training and products in a more affordable manner.
MS&T: As we speak, the Paris Air Show is in full swing. Boeing's P-8s, F/A-18, E/A-18s and other military aircraft are very competitive for overseas contract awards. To summarize some of our earlier discussions, what role is your division expected to have in future sales of these and other fixed- and rotary wing aircraft?
MM: That creates not only opportunities to sell devices, but a lot of international customers are more interested in “turn key” training solutions to provide the devices, build the facilities, train their trainers, maintain their devices and even provide training as a service for 10, 15 or 20 years. That is very interesting for us. We have set up, in some cases, training centers that provide training for those that don’t have enough aircraft to justify training device.
MS&T: The length of those contracts must offer Boeing some welcome stability.
MM: Yes, absolutely. The UK MoD, for example, is moving toward buying a capability. As part of that capability they want to buy the platform, the training and other support needed to go with it – as a package – and typically buying it from the original equipment manufacturer. That creates great opportunities for us.
And continuing, one thing that we want to ensure we have as we sell platforms into overseas countries and that is to ensure that those crews can get trained. Sometimes with the US Foreign Military Sales training system, those services struggle to get slots and they may struggle with the English training requirement as a prerequisite. We’re looking at how we can take care of all of that so they can have properly trained crews.
So with the F-15 and F-18, the C-17, still going strong, and the P-8, we’re going to have a whole lot of opportunities. And then there’s rotorcraft, both CH-47 Chinook and AH-64 Apache are very strong and we have the AH-6I. When you wrap these together there are a lot of opportunities.
MS&T: Is there anything else to add?
MM: Yes. Domestically, we are helping to field the US Navy’s P-8 program. That service has made a big investment in its training center at NAS Jacksonville. We’re providing all of the equipment, maintaining the devices and delivering other services. That’s a huge program for us.
The Navy is making a move from the P-3C Orion where crews do a lot of training on the aircraft and less on the ground-based training system. They are doing a major shift on the P-8 given its commercial heritage. I believe the Navy is extremely pleased with the aircraft. I encourage you to talk to the Navy and ask them what they think of the P-8.
We have an operational flight trainer which is a full motion device for the aircrew in the front, a weapons tactics trainer which is the “barrel” of the aft part of the plane – not on motion but very realistic. The two devices can be linked together. And we have other part-task trainers, and electronic classrooms and courses and related materiel. All pretty neat stuff if you haven’t seen it.
MS&T: I am confident that MS&T will publish an article on the P-8 training system in the near future. I will certainly be in contact to gain your program manager’s insights.