BAE Systems is aiming to generate billions of dollars worth of business by winning five major contracts to "outsource" fully the logistic, maintenance and training support for armed forces around the world.
Robin Southwell, group managing director of the company's newly formed Customer Support and Solutions business, says the world is a "target rich" environment full of customers who want to outsource capabilities to private industry because of defence budget cutbacks.
He declines to name the five key target countries for BAE Systems.
"I want to offer turnkey solutions around the world," says Southwell, adding that BAE Systems has a track record of providing such services to Saudi Arabia under the Al Yamamah programme and has just opened a Hawk aircraft simulator facility for the UK's Royal Air Force under a pubic-private finance contact.
"This will be a core value stream activity for us," says Southwell. "Our strategic intent is to leverage our core intellectual property and services into a set of output-based solutions that address the strategic issues facing our customers.
"We want to give the customers the option of us delivering a capability to them."
BAE Systems' role as a prime contractor on a number of frontline combat aircraft and weapon systems means it will be able to offer customers more than just a glorified spares delivery service, says Southwell.
"This is different and has never been done before. Output-based solutions mean we are not selling assets but a service," he says. "We will delivery a competent world class service. We want to be regarded as a natural choice.
"Business as usual is not acceptable to more and more customers. We will have an entrepreneurial mindset - we will think out of the box, joining up a number of services and products to provide solutions.
"There are many opportunities to grow this business," he says. "We are attempting to align ourselves to the customers."
Customer Services and Solutions is a result of the BAe/Marconi merger last December and brings together a number of business units, including the Al Yamamah project, the Asia Pacific Training and Simulation joint venture with Singapore Aerospace Technologies and the training-simulation company Reflectone UK, although US-based parts of Reflectone report to BAE Systems' American arm. The new business division currently has some 700 employees and an annual revenue of $350-$450 million.
Southwell hopes to use the UK's growing number of public-private finance initiatives, including a $1.4 billion future strategic tanker aircraft programme, to launch the business globally.
"The UK is in the vanguard of buying capability, not kit, but many people around the world, including in the US are doing things the old way," he says. "The growth in the UK has tremendous potential in the short term. This will be a platform to explain the idea to the international market place.
"Everybody does public-private finance initiatives in a different way. If we are successful in the UK we will adapt how we do business for an international stage. It augurs well for the long-term health of our company."
Source: Flight Daily News