Boeing [BA] and India’s Hindustan Aeronautics Limited (HAL) announced Dec. 20 signing a 10-year Memorandum of Understanding (MoU) intended to bring more than $1 billion of new aerospace manufacturing work to India.
The agreement, signed in New Delhi by Jim Albaugh, president and CEO of Boeing Integrated Defense Systems, and Ashok Baweja, chairman of HAL, also includes sharing key Boeing business and manufacturing tools with HAL.
“I am extremely pleased that Boeing and HAL have agreed to work together for the mutual benefit of their companies and countries,” Albaugh said. “The agreement represents an important step in our efforts to build solid long-term partnerships in India to make Boeing products more globally competitive, while allowing HAL to grow and expand its potential market around the world.”
Baweja said, “This is a significant step by two aerospace leaders that opens up new avenues and areas of co-operations. HAL and Indian industry gain from this long-term business arrangement in terms of technology upgrade, while Boeing can look forward to a reliable source for its product requirements.”
Under the agreement, Boeing and HAL will explore business opportunities aimed at transferring work packages to India with an initial value of $10 million to $20 million annually, increasing in size and complexity as business opportunities develop, the announcement said. Boeing also will support HAL in developing manufacturing processes and capabilities needed for the production of hardware for Boeing and/or its subcontractors. Boeing also will support the training and transfer of Boeing best practices for lean principles and supplier and program management to the extent allowed by U.S. government and Boeing corporate policy. Initial training in lean began in 2006 and will continue through 2008.
HAL agrees to offer Boeing competitive pricing, invest in the required manufacturing infrastructure, and join Boeing in seeking recognition by the government of India for the value of the work packages and technology transfers in support of credits against existing or future offset obligations.
Boeing’s efforts on this project will be led and managed through its Integrated Defense Systems business unit.
Boeing’s history in India reaches back more than 60 years, working with airline customers, parts suppliers, research institutes and others to provide products and services. In December 2003, Boeing established a wholly owned subsidiary, Boeing International Corporation India Private Limited (BICIPL), to support the growing demands of India’s aviation, aerospace and defense industries.