ORLANDO, Florida – Boeing is focusing on growing its training services sector based on what a top company executive described as serious analysis of the marketplace.
Bob Gower, Boeing Defense’s vice president for training systems and government services, said he is focused on “aggressively” pursuing training services, an area that historically has not been a major focus for the aviation giant.
That includes a reorganization of his portfolio that saw the launch in November of a services-specific organization focused on trying to increase that area.
“We did this for a couple of reasons,” Gower told reporters Monday at the I/ITSEC show in Orlando. “One is where the market is, but we also see trends where some customers are buying services and upgrading systems under those services. So to me, to have a healthy business over the long term, we have to be in the services business if we want to do systems as well.”
In other words: simply providing the high-level training systems for Boeing products won’t get the job done for the future. The company needs to improve its services function.
So how much could services grow for Boeing? Gower, who took over the job roughly six months ago, believes it will be significant.
“The services portion of the business is about 10 percent of my portfolio,” Gower said. “Going forward I’d like to get to where the services is much closer to half than 10 percent, but that’s going to take me some time.”
Asked how much time, Gower said he had no set timetable, but “sooner would be better.”
A big chunk of that growth could come from the Middle East, which Gower described as one region where nations prefer the “schoolhouse” type structure to training, where a nation hires a contractor to supply a full educational experience for its military.
“What is evolving [in the Middle East] is a real desire to have people running schoolhouses,” he said. “That’s what we’re seeing emerge as a trend, so we’re very focused on using our experience as well as the Boeing presence we have around the globe to go help us capture the markets and expand our presence.”
Observers have warned that Boeing faces challenges with platforms like the F/A-18 fighter and C-17 transport slated to end production before the end of the decade. Moving more into service support could help offset some of those lost revenue streams, Gower argued.
“Right now we have some programs sunsetting, like C-17s,” he said. “So we are looking to move further into services to help us sustain that long term.” ■
Email: amehta@defensenews.com.
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