Boeing to replicate US business structure in India

The Boeing Company is replicating its US business model in India and scaling up operations, eyeing a major chunk of the $31-billion military and industrial aerospace market.

The US-based aircraft manufacturing giant will expand its manufacturing presence, launch subsidiaries and strengthen research and development (R&D) programmes in the country.

“In the last six years, we expanded presence to nine locations from one in 2003, increased executive strength and launched R&D centres in India. The country is an important market for Boeing outside the US,” Vivek Lall, vice-president and country head, Integrated Defense Systems (IDS), Boeing International Corporation India, told Business Standard.

“The India business would be a microcosm of all our businesses in the US,” Lall said. The company, he added, was keen on becoming India’s “preferred aerospace partner.”

Boeing is eyeing the $10-billion military aircraft contract and will plough back around 30-50 per cent into the country under an offset clause. The figure depends on the contracts to be awarded by the Government of India. The clause requires firms to engage in some local manufacturing and transfer of technologies to Indian subsidiaries or partners.

Boeing, which has six R&D labs in the US, will develop its technology centre in Bangalore as a centralised R&D division for its major business units. Earlier, reports had mentioned that Boeing was looking at adding 100 engineers at its centre.

The aircraft major is in talks with several private firms, including Mahindra & Mahindra, for aerospace manufacturing partnerships, similar to the ones it had signed with the Tata group, Larsen & Toubro (L&T) and Hindustan Aeronautics Ltd (HAL).

Jeppesen, a subsidiary of Boeing, is close to setting up an office in Hyderabad, while another, Aviall, the company’s spare parts subsidiary, already has operations from Noida.

The company would also set up additional virtual warfare centres across the country, which already has two nodes (Bangalore and Delhi). Boeing had earlier set up a virtual warfare centre in Bangalore. It has also plans to increase the quantum of outsourcing it provides to Indian information technology companies like Wipro and HCL.

The US aviation major has accepted a request from the Indian government for proposals to supply F/A-18 Hornet series fighter jets, the Apache attack chopper, the heavy lift helicopter, Chinook, and C-17 strategic choppers. Field trials of the aircraft are expected to begin soon.

Boeing had earlier signed R&D partnerships with many Indian firms and IIT-Kanpur for integration of passive and active radio frequency identification (RFID) technology, and with National Aeronautical Laboratory (NAL) for development of computational fluid dynamics (CFD) tools and testing aircraft landing gear.

The company’s research in India also covers advanced composites, high-strength alloys, non-destructive evaluation and virtual manufacturing.

Boeing is bullish on India because the country was one of the few markets which is still growing, despite the global economic crisis.