Boeing eyes India as US cuts defence spending - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Sunday 29 July 2012

Boeing eyes India as US cuts defence spending

by Ajai Shukla
Seattle, USA
Business Standard, 29th July 12

Inside a spotless hangar here in Seattle, technicians work on three gleaming new Boeing 737s, painted in the drab grey favoured by the world’s navies. While two of them are marked with the US Navy logo, the third bears markings unusual for this hangar: the Indian Navy’s Devanagari logo: “Nau Sena” (Navy).

These are no ordinary 737s but new P-8 multi-mission aircraft (MMA) that watch over enormous tracts of sea, detecting hostile ships and submarines with electronic sensors, and quickly destroying them with the weaponry on board.

Unprecedentedly, these state-of-the-art platforms will join service almost simultaneously with the US and Indian navies, giving the Indian Navy world-class capabilities for dominating the waters and vital shipping lanes off its 7,500 kilometre coastline, deep into the Indian Ocean.

Since independence, India has remained content with older weaponry that richer and more technologically advanced countries had already deployed for years. The Indian Air Force (IAF) bought the Jaguar and Mirage 2000 fighters long after they entered frontline service with the French and British air forces, while the Sukhoi-30 MKI and the T-90 tank were systems that the Russians did not induct.

But the navy’s purchase in 2009 of eight P-8 aircraft for a whopping US $2.1 billion, and Washington’s decision to supply them to India alongside the first deliveries to the US Navy, highlight two major changes. Firstly, Washington’s readiness to sell New Delhi cutting edge weaponry without tiresome quibbling over “changing the regional arms balance.” Secondly, the P-8 buy demonstrated New Delhi’s willingness to spend top dollar to back its regional ambitions with top-flight military capabilities.

New Delhi again demonstrated that buying power last year by shucking up $4.1 billion for ten C-17 Globemaster III aircraft. These giant airlifters, which can land and take off from short, high-altitude, mud airstrips along the Himalayan Sino-Indian border, will let the Indian Army quickly reinforce threatened sectors.

For Boeing Defense, Space and Security (BDS), the company’s military division which stares at US defence cuts of a trillion dollars over the coming decade, New Delhi is an increasingly important customer. Boeing’s international defence sales, which currently account for about 22-24% of BDS’s turnover, must reach 25-30%, says Mark Kronenberg, Boeing’s International Business Development head. The Asia-Pacific region, with India as the largest buyer, is expected to account for 45-50% of foreign sales, with West Asia buying another 25-30%.

These plans were jolted last year, when New Delhi rejected Boeing’s F/A-18 Super Hornet fighter in a $17 billion purchase of 126 medium fighters, choosing instead the French Rafale. But Boeing remains optimistic about four potential revenue streams. Besides the P-8 and the C-17 Globemaster III contracts already won, the IAF is also evaluating the purchase of Boeing’s Apache AH-64 attack helicopter; and Chinook CH-47F heavy lift helicopter.

The P-8 being completed here in Seattle has been designated the P8-I (I for India), which distinguishes it from the US version, the P8-A. Two Indian aircraft have already flown, the last one on July 17th. Boeing executives say that, by end-2013, three P-8Is will be in operational service in India.

The P8-Is will operate from INS Rajali, a naval base at Arakonam, near Chennai, flying 8-hour missions over the Arabian Sea, the Bay of Bengal and the northern Indian Ocean. These could involve seeking out pirates, suspicious cargo vessels, or hostile warships and submarines. During such missions, the P-8I’s enhanced internal fuel tanks will allow it to fly 1,100 kilometers to a patrol area, remain on station for up to six hours, and then fly back 1,100 kilometres to Arakonam. Using aerial refuelling, this endurance can be doubled.

On patrol, naval operators scour the area from banks of consoles inside the aircraft. A multi-mode radar in the P-8I’s nose cone looks forward and sideways, picking up aircraft, surface ships and submarines. Meanwhile, a belly-mounted radar looks backwards, like an electronic rear-view-mirror. Suspicious objects can be investigated further: a suspected enemy submarine is pinpointed by dropping sonobuoys, floating sonar detectors that radio back telltale audio signals. A magnetic anomaly detector (MAD) on the P-8I’s tail distinguishes between an enemy submarine and, say, a blue whale.

These sensors are backed up with armament. The P-8I, basically a Boeing 737-800, has the enhanced wings of a 737-900 onto which weaponry can be mounted. This includes potent anti-ship Harpoon missiles, and the Mark 82 depth charge that the US Navy uses.

Another compartment in the aircraft’s belly will house five Mark 54 torpedoes, the primary submarine-killing armament. These must be warm when they are launched, and so cannot be exposed to the icy temperatures of wing mounting.

The US Navy intends to buy at least 117 P-8A aircraft, as the US version is called, while Boeing expects another 75 aircraft to be snapped up by international customers, especially those who want to upgrade from the P-3C Orion, built by rival company, Lockheed Martin. Pakistan operates four P-3C Orions, but US government insiders say that a sale of the P-8 to Pakistan would not be cleared.

India remains a potentially big customer. Robert Schoeffling, the P-8 programme’s Business Development head, anticipates Indian orders for 25-35 P8-Is. “With 7500 kilometres of coastline, 60% of the world’s shipping traffic (passing close by), tremendous need for MDA (maritime domain awareness), including anti-submarine, and with three aircraft carriers in the 2020s, (the Indian Navy is) going to have a tremendous need for such aircraft,” he says.


  1. you too Brutes.....visit the enemy

  2. I asked this comment of your colleague Mr Aroor but he was too cowardly to post it. I know you will not follow his timid footsteps.

    My Question, seeing Boeing has laid the red carpet for certain journos - is this trip paid for by Boeing AND/OR have they also paid for journos expenses etc.

    If they have, is there a quid pro quo (either express or implied) from them about positive stories for them.

    Finally, isn't this merely a media and marketing gimmick by them whereby they get amazing coverage for almost nothing?

    Here is hoping you publish my queries.

    All the best


  3. @ Anonymous 17:19

    To answer your question directly: I am traveling at Boeing's expense, interacting with their international marketing executives in Washington DC... and visiting the CH-47 and V-22 plants at Philadelphia; the P-8I and civil airliner facilities at Seattle; the AH-64 line at Mesa, Arizona; and the C-17 line at Long Beach, California.

    Has Boeing laid the red carpet? No. They pay our travel and accommodation bills and everything other than that is paid for by us. There is no "daily allowance" or "cash reimbursement" or anything other than what I've recounted. They are bound by the Foreign Corrupt Practices Act not to offer any inducements and --- it is quite evident --- that they live in mortal dread of running afoul of US law!

    But to address the more important part of your question: what makes you think that a journalist will always write a positive story for someone who has paid his/her travel bills? How does it make a difference to me whether Business Standard is paying my bill, or Boeing is? At the end of the day, I'll still write the same story!

    Why talk in parables, let's take the example of the story that I have filed. Its key argument is that Boeing is under financial pressure from dwindling US budgets... and that it desperately needs the Indian (and Asia-Pacific) markets. Hardly a flattering picture!

    Other than that, it reports pure facts and figures. Would you argue with anything specific in the story? Do let me know.

    So let's not get into conspiracy theorizing! Slamming charges against people is easy, but the fact is that it would take a great (GREAT) deal more to buy most journalists than zig-zagging them from plant to plant until they are half dead with jet lag! And then cramming them into yet another flight to yet another plant...

    There is absolutely no quid pro quo with Boeing.

    I guess it's pretty pointless trying to convince people whose minds are already made up. But I thought it would be only fair to answer your question directly.

  4. @Broadsword

    At the end of the day, you have written 3-5 articles on indo-us military trade within weeks. Since you've been called and entertained on their behalf, the articles HAD to come. They were established the moment they indebted you with benefits.

    I mean, what kind of a guy will write a negative article on a company/country that has hosted him. A ungrateful guy will do that. But you're not an ungrateful guy, are you ajai?

    After all, we belong to a culture that writes down the names of those families who offer presents at our kins wedding. You must be completely aware of the concepts I'm talking about, yes?

    No need to take anything personally. I belong to your culture group so I understand.

  5. Firstly my congratulations and thanks for posting and answering my query.

    With respect I disagree with your response and consider it somewhat self serving.

    THe mere fact your trip (and other journos) have been paid for Boeing should be disclosed in each piece. By receiving the money (directly or indirectly) your piece goes into the realm of sponsorship - this point is missed by you.

    The issue of whether you write favourably or not is a red hearing. What Boeing have procurred from you is headline and valuable media space, for which they have essentially paid you.

    Isn't this going into the realm of paid advertising in the guise of genuine journalistic piece of work?

    Your Business Standard argument is nonsensical - they are either your employer or you are in some sort of employer contractor arrangement with them, hardly the same as your relationship with your journalistic subject (here Boeing).

    The broader issue here is conflict of interest (whether merely perceived or real) because you received financial assistance from Boeing. One way around this is complete discloure up front.

    Saying all that, my comments apply to all paid Boeing guests on the jaunt.

    However, you I respect because you have responded and disclosed the payment(with some reticent and prompting of course).

    Also I do enjoy your pieces.

    All the best and enjoy the jaunt.



  6. ok who gets the gold star and brownie points for the B-47 question????

  7. @ Anonymous 16:34

    Are you trying to suggest that there is no disclosure by me? My posting of photos from Seattle... my response to your query... hardly sounds like concealment.

    Boeing has procured "valuable headline space" from me? You're saying, are you, that Boeing would not get any press coverage without actually shuttling journalists to their plants?

    Get real. Boeing has made more sales to India in the last few years than any other company in the world... and needs to be visited, analyzed and reported upon. I would do that anyway.

    But, more importantly, I see you haven't an answer to my point about my piece being perfectly balanced. There's a big difference between "paid advertising" and what I am writing. If you can't spot it, I have nothing more to say.

    Your initial allegation talked about "amazing coverage" for Boeing!!

    But you don't want to spot that, do you? It's so much easier to just name-call and hurl allegations! Go right ahead... you do what you have to and I'll do what I have to.

    @ Sachin

    Boss, as anyone with an ounce of intellectual honesty would realize in a moment, noting down who gave what at one's daughter's wedding (I've never been there, probably you have) is a very different proposition from journalistic visits.

    But you're not promoting intellectual honesty here, are you? You're simply making snide comments that are seriously at odds with the writing on this blog.

    As for your allegation that my articles on US-India defence trade "had to come" because Boeing was flying me to the US... I can forgive the slander, because my reputation for honest reporting is hardly about to be tarnished by you... but I find it difficult to forgive its stupidity. The three articles that I've written on the subject in the last month are about US-India government policy... not about Boeing or any other private company.

    You understand the difference? Or are you one of those people who think "The US" is one big KGB-like entity that includes the government, the CIA, the defense corporations, the private sector, the universities and the American people?

    Hey, you're not related to Morarji Desai, are you?

    Since you're engaged in mud-slinging, here are the three articles that I've written in the last month:

    1. The most recent one is on Ashton Carter's visit to Delhi. A pure news report, which is definitely not flattering to the US, since it highlights the policy confusion between "defence trade" and "defence cooperation". Nothing to do with Boeing.

    2. An opinion piece, "Who's Afraid of US Export Controls" that clearly presents both the "pro-US" and "anti-US" viewpoints and suggests that the MoD make up its mind either way. Nothing to do with Boeing.

    3. A hard news report, "MoD snubs US proposal to increase defence trade" which any newspaper would be glad to carry. Again, nothing to do with Boeing.

    So now turn around and say that I'm shaping the US-India government relationship in a manner that favours Boeing!

    I give up.

  8. Col. Shukla,

    Enjoy your articles and of course the long rope you give people to comment here and then when appropriate skewer them with your replies em :-).


  9. Shukla - Unlike Aroor,you did not explicitly declare that you are going on Boeing sponsored tour. On many occasions you have termed your readers as "dimwit". So Shukla dimwits like us do not get idea from your quiz that you are going on a sponsored junket. You have been fast to claim that you follow "Best Practices" followed by your sponsors - Boeing in this case, but in fair assessment you did not adhere to it in full letter and spirit, namely disclosure statement at start of piece it self.

    Let me say that Aroor did a much better job in disclosure without claiming moral high ground of "Best Practices". Thus, my too Brutes. We were surprised honestly. At the same time we are happy that you have succeed in your mission to get into inner circle of US Embassy in Delhi.

  10. I never called the article biased. You accepted boeing's invitation and you reciprocated it. Even though the article tries to talk about boeing's need to substitute sales in another market, I still think the invitation had a publicity element to it.

    I found the back-to-back articles on Indo-US defense relations very unusual. I shouldn't have.

    Again, nothing personal. No need to call names.

  11. @ Anonymous 22:14

    At the outset let's note that you're just another Anonymous poster who does not have the juice to post under his/her own identity... but who expects everyone else to provide full disclosure.

    But, since your post seems to accept that you're a dimwit, let's just refer to you as that.

    I don't feel the need to have a mandatory sentence under each article saying that I visited Boeing's facilities as the guest of Boeing. If you're going to plug Boeing, that disclosure means nothing and if you're not going to plug Boeing, it means nothing either. So I'm quite content to travel at anyone's cost... and then report objectively as I always do.

    All the thousands who visit this blog every day, including I note yourself, do not do so for pro forma disclosures but for the objective reporting that they find here. If you're visiting for any other reasons, you're wasting your time.

    So take yourself off, Dimwit.

  12. Ajai, yours is the only Indian defence related blog that is analytical and demonstrates solid research and leg-work. Keep up the good work. In this world you will find many who carp and whine a lot, unfortunately we have more than our share in India. Don't waste ink/mind space on them. Just keep up the great work!


  13. @dimwit here again

    Shukla your reply is just gibberish and it is so easy to provoke you. A little poke and you all over the place. Probably, when you reply post, soldier in you overpowers the Journo that you are.

    Disclosures are standard practice globally and yes it is not done in India as it is not mandated by law. We are deficient in many places and this is one of them. But it would be nice to have disclosure by journalist at least few who claim morale high ground.

    Secondly, learn to do correct PR for yourself before you start becoming PR elements for other brands. Your handling of comments on your blog is full of negativity. Start handling them in positive fashion. Ultimately, we all consume everything, be it your blog or Boeing. The power to decide is ours not yours and we will make choice based on what we observe.

  14. @ Dimwit

    "when you reply post, soldier in your overpowers the Journo that you are"

    My friend, the soldier in me is present not just when I reply, but in everything that I see, hear and do.

    I happen to be very proud of the soldier in me. I don't think you will understand what I'm saying. You've clearly never been a soldier.

    But rest assured, when you talk like a dimwit, I'll let you know.

    As far as negativity is concerned, just read your own comments to understand what negativity is. If I were negative, or insecure, comments like yours --- posted anonymously without the courage to identify yourself --- would never find a place on my blog.

    And, dimwit, I don't do PR, as you can feel. A journalist's PR is his work.

  15. India rightly decided to purchase the P-8I. It did not have any competition.

  16. @dimwit here

    Happy to say that you respect our views. Cleaner of journos like you will certainly do it. Sir, self-regulation is only solution in countries like India.

    Still it does not changes anything between me and you. I am the dimwit and you are the smart guy.

    Go ahead Soldier!!!


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