Even with looming federal defense cuts, Boeing Co., is planning for growth over the next five years. The second largest defense company has set its sites on expanding into new industries and boosting international sales in the coming years.
“I’d like to build out additional capacities and get more balance,” Dennis Muilenburg, president of Boeing’s defense unit, told Bloomberg. “It’s more about adding than subtracting.”
Over the past three years Boeing Defense Systems bought 10 companies in order to expand into the unmanned systems industry of intelligence, surveillance and reconnaissance, computer networks and logistics services. Half of these purchases have been in cyber security-related companies, which comprise 10 percent of Boeing’s annual sales. Boeing will continue to look for “selective, niche” takeover targets, Muilenburg told Bloomberg.
“Our focus on the acquisition side has been on how we can execute our business strategy and provide capabilities that fill out that strategy,” Muilenburg said.
Boeing is also looking to sell weapons to foreign countries to offset a stagnant or possibly declining U.S. military spending budget. Currently, 18 percent of Boeing’s defense sales are in foreign contracts, but is expected to increase to 25 percent in five years, Muilenburg said. In the coming years India could benefit from some of the most sophisticated technologies the U.S. holds in science, space, defense and agriculture according to Boeing’s India division vice president of defense, Vivek Lall, in India Strategic defence magazine.
Lall has spearheaded numerous Boeing military equipment sales to India, including eight Boeing P8-I multi-mission maritime aircraft and 10 C-17 Globemaster III strategic heavy-lift aircraft and three Boeing 737-based business jets, wrote the Economic Times. More sales between Boeing and India are expected.
Boeing also wants to expand in Saudi Arabia by supporting defense and energy systems, as the Saudi government plans to spend $400 billion over five years for infrastructure development.