St. LOUIS–Broadening its focus on pursuing defense business opportunities with its platforms as a prime contractor, Boeing [BA] is expanding its go-to-market strategy to include partnering with other companies as a subcontractor as its customers seek more integrated solutions, a senior official with Boeing’s military business said on Tuesday.
The company also sees “ripe” opportunities to rely on its suppliers for certain capabilities that Boeing can integrate into its platforms to meet the growing demand for integrated mission solutions, Bernd Peters, vice president for business development and strategy at the Boeing Defense, Space & Security segment, told reporters at the company’s facilities here.
Conversations with the supply chain about these opportunities are happening, Peters said. Boeing’s “embrace” of open systems architecture gives it the foundation to work with different subsystems, he said.
Peters said “many of our customers are looking at how they pursue the battlespace in a very integrated way,” which means Boeing must track “this concept of integrated global missions in a more holistic way.” When it makes sense, the company will be the prime contractor but there are “capabilities that we need that exist out in the ecosystem that enable us to accomplish this,” he said, highlighting that “we are opening up the aperture in instances where it makes sense for us to look at having somebody else be in the lead and us sort of taking a sub position.”
“I think there is opportunity for us to look at more strategic partnerships to enable how we actually achieve this notion of integrated global missions,” he said.
One example where a shift has been occurring around prime versus subcontractor roles is in satellites, Peters said. Traditionally the satellite bus manufacturer was the prime and a payload provider was not but that is no longer the case, he highlighted. Going forward, the same could be true for an airframe manufacturer like Boeing where a supplier brings the core capability carried by the platform, he said.
Boeing is already serving as a subcontractor in the space market to “some proprietary capabilities” of others, Peters said.
“It’s a different way of thinking for us but it’s candidly a way that we have to think,” Peters said.
Boeing is developing capabilities in-house that it can vertically integrate for integrated mission solutions, he said. Some of this work is being done by the Multi-Domain Integration group within Boeing’s Phantom Works division, which has been developing “exquisite” capabilities for these solutions, he said.
Boeing’s defense backlog at the end of April stood at $61 billion, 31 percent of which is for international business. Peters said that between 2023 and 2043 Boeing forecasts $3.1 trillion in global defense and space spending where the company can serve its customers.
“And again, the reason why we’re putting so much effort into our strategy as the future for how we approach the marketplace is we recognize we have to get focused to make sure that we’re successful at capturing that $3.1 trillion, or as much as we can, In the next 20 years or so.
Peters outlined a “refresh” of the defense segment’s new business strategy, which has three focus areas.
Global control, the first tenet of the strategy, is essentially the elements of Joint All Domain Command and Control. This covers platforms from “seabed to space” for sensing, networking, and data fusion to provide actionable intelligence for customers, Peters said.
“But I think global control is right for us to look at the industrial base from a partnering standpoint and to understand what are the capabilities needed to insert on our platform to enable this vision and I think us having the platforms really lets us stand out against our peers and differentiate in terms of helping the customer define the future solution sets and the architectures that are going to be inherent in global control,” he said.
The second focus area is global reach, which is “how you get to the fight” and includes platforms like the C-17 transport, KC-46 aerial refueling tanker, the unmanned MQ-25 refueling aircraft, the Chinook heavy lift helicopter, and the V-22 Osprey tiltrotor, Peters said. Boeing is looking at how these platforms can be used to provide capability for global control-type operations, he said.
Global strike is the third area of the strategy and includes the company’s fighter aircraft, F/A-18 and F-15, the AH-64 Apache attack helicopter, and weapons, Peters said. The T-7 jet trainer being developed for the Air Force also fits into this area, he said. There continues to be interest in the aircraft from dozens of international air forces, he said.