Working Together as a Global Company Thomas R. Pickering Senior VP International Relations The Boeing Company September 17, 2004
The Global Economy Bright global economic outlook: strong 2004 World GDP growth of 4.2-4.5% this year Growth gradually easing in 2005 and 2006 US and China the engines of growth Over-reliance of global economy on US US budget and trade deficits Risk: a hard landing of US dollar Consumer debt Other concerns: Oil prices, Terrorism
Asia: Growth and Flashpoints Very strong growth in emerging Asia China s economy growing at almost 10% in 2004 5-10% growth elsewhere India also showing impressive growth: 8%+ Japan: how long will its recovery last? Flashpoints: Korean Peninsula China and Taiwan Kashmir Terrorism and Southeast Asia
Europe and Russia Sluggish economic growth in Eurozone Slow growing German economy EU expansion and quality of the relationship Tense relations with the US Iraq, Iran, Arab-Israeli conflict Russia: uncertainty Chechnya -- Terrorism Economic growth very dependent on oil
Latin America and Africa Latin America: Economy closely tied to US, particularly Mexico Free trade agreements a positive development Democracy continues to make progress, though slow and sporadic Improvements in governance Africa: Modest economic growth More regional projects and collaboration Growing importance of Africa west coast oil Changing US-Libya relations Continues to be plagued by internal conflicts
The Middle East Iraq: A challenging course over next 2 years Iran: Central question of nuclear weapons development Regime change issue Arab-Israeli problem The longest unfinished major international dispute Unpredictable environment Potential to relieve the popularity of terrorist movements in the Islamic world Adds to the uncertainty about oil prices
About International Relations New Boeing organization: Established Jan. 2001 Led by Tom Pickering Part of Boeing World Headquarters Operates out of Boeing Washington DC office Approximately 17 leaders overseas, 8 in Washington DC and Seattle, plus support staff Mission: To lead and facilitate Boeing s globalization
International Relations Mission Lead Boeing s global transformation By supporting business units Revenue growth (Sales) Leveraging supplier base (Sourcing) And leading Boeing s Identification of new sources of growth and efficiency Understanding of our global stakeholders Development of global mindset and business practices Vision 2016: People working together as as a global enterprise for aerospace leadership
Key Enabling Elements for Globalization People: The most important resource Develop, value and mobilize global intellect within Boeing Presence: Requires the right structure in the right markets Create local responsiveness via Country VPs and teams who know the local scene and can provide one company face to local stakeholders Processes: Linking People, Presence and Boeing business units through coordinated global processes Strategy, Communications, Business Management, Human Resources, and Community Relations processes that are globally scaled and coordinated -- yet locally responsive
People: What We Want to Achieve Continue to develop and strengthen Boeing country teams and excellent country team leaders Strong overseas career opportunities for Boeing people Global talent integrated into Boeing A Boeing culture that values non-us business experience Boeing executives with a global footprint
Presence: Country/Regional VPs N. Europe Canada Mexico Latin America Brazil EU-NATO Spain UK France Germany Russia/CIS C. Europe Italy Turkey China S. Arabia Israel M. East India India Africa Korea Japan SE Asia Australia 2004-05: India, Saudi Arabia, Central Europe and and Americas Total: 24 24 Locations
Presence: What We Are Building Location: Based on growing the business Structure: An organization that reflects Boeing commitment to operate as a global company Country Teams Emphasize cross-enterprise coordination and minimize potential conflicts Maximize value creation -- shaping our markets, more efficient production, alliances, etc. Global Coordination and Local Responsiveness
Process: Key to Global Coordination Strategies: Country, Regional, Global Global processes for managing international offices/operations Standardized, lean and efficient processes for: Finance Human Resources Facilities IT Services Communications Community Relations Processes that are globally scaled, yet responsive to local conditions
IR Strategy: From Vision to Reality Presence 12 Country Offices 18 Country Offices People Process Build Global People Plan 7 Country/ Regional Strategies Global People Plan 18 Country/ Regional Strategies 2001 2002 2004 Objective: Global Value Creation
Questions? Thank You!