Boeing envisions stronger partnership in Korea

Boeing, the world`s largest aircraft manufacturer, has enjoyed strong sales in the Korean commercial and defense industries and believes there is room for more.

William Oberlin, who has been at the helm of Boeing Korea since 2002, expects more deals to be realized on the back of existing systems and equipment.

"We have the products ... and we`re here to offer solutions based on a commonality between existing products and those to come," Oberlin said in an interview with The Korea Herald.

Among the products Boeing hopes to offer, some were on display at the Seoul International Aerospace and Defense Exhibition that wrapped up yesterday.

Flagship aircraft such as the F-15E Silent Eagle fighter, with which Boeing hopes to clinch yet another high-profile acquisition deal, were contract hopefuls at the exhibition. The South Korean Air Force already deploys Boeing`s Slam Eagles based on previous contracts.

The exhibition was a chance to showcase what Boeing, not to mention other key players, had to offer the Korean market.



The local defense industry has been growing at a runaway pace, registering $1 billion of exports in 2008.

But while the opportunities seem to be abundant, Oberlin pointed out that the overall outcome would depend on how aware Boeing is of emerging global trends and how well it meets requirements as more customers demand custom-made products.

"The market is wide (in Seoul) but not superwide. That`s why we try to focus on core competency," Oberlin said.

The partnership is also by no means a one-way street, he added, since local defense industry firms are increasingly playing bigger roles in Boeing operations here.

For instance, Korea Aerospace Industries is currently manufacturing all of the fuselages for Boeing`s Apache choppers, according to Oberlin.

Korea is cited as one of the firm`s top export destinations, along with Japan. How significant such importers are is reflected in the fact that the firm depends on over 70 percent of its sales to be international.

To continue maintaining those numbers, top-of-the-line defense manufacturers including Boeing have had to embrace changing global trends.

The latest is the push for companies to go green amid the global economic downturn.

"There are a number of challenging trends. For instance, fuel prices," Oberlin said. "Whatever you do, you have to make sure it`s economical."

The Boeing 787 Dreamliner, as one example, has trimmed manufacturing costs extensively by utilizing so-called "green technology."

The reduction, Oberlin said, would hopefully be reflected in the ticket costs.

Korean Air, the nation`s No. 1 airliner, has signed on to acquire 10 units of the Dreamliner, and has an option deal for 10 more. Globally, Boeing has clinched orders for 840 units of its new commercial airliner.

But competition is fierce, especially from the European-based Airbus which ambitiously showcased its A-380 airliner at the recent exhibition.

Boeing also needs to get the last and final phase of the F-X program under its belt.

The F-X is the Korean Air Force`s acquisition plan for next generation fighter jets.

The Air Force is rumored to be considering purchasing up to 60 aircraft, which would be a $12 billion deal. This would wrap up the F-X project.

Boeing has so far nabbed the first two deals.

Stiff competition is expected for the pricey contract, mostly from Lockheed Martin`s F-35 Lightning II Joint Striker Fighter.

"There also will be several competitors showing up, which is good for Korea because it would be a bigger competition," Oberlin said.

The company is also looking to shift some of its C-17 transport aircraft.

Competing for the 650 billion won ($537 million) project is the C-130J Super Hercules manufactured by Lockheed Martin. This deal is expected to be wrapped up by the end of this year, according to the Defense Acquisition Program Administration.

Boeing is said to be in the running, refusing reports that it has receded on the C-17 to secure a more favorable position for the F-X project.

Eco-friendly manufacturing methods are another significant global trend the defense industry is adopting, Oberlin said.

"The 787 is a good example. If you make an aircraft more economical, you make the power systems more efficient. So less pollution," he said. "So design it so it`s economical!"

(jemmie@heraldm.com)



By Kim Ji-hyun