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In India, I see biggest opportunity to make, design: Boeing chairman

Boeing chairman James McNerney is visibly enthused by the changes he sees in India. “I see signs that I have not seen in 35 years,” he says. That could be playing a part in how committed he sounds to promoting manufacturing in India, including of his key fighter jet F/A-18 Super Hornet.

business Updated: Oct 17, 2015 01:24 IST
Boeing chairman James McNerney.
Boeing chairman James McNerney.(Ravi Choudhary/HT Photo)

Boeing Chairman James McNerney is visibly enthused by the changes he sees in India. “I see signs that I have not seen in 35 years,” he says. That could be playing a part in how committed he sounds to promoting manufacturing in India, including of his key fighter jet F/A-18 Super Hornet. Excerpts from an interview:

You met PM Narendra Modi yesterday. How was it?

The meeting was very positive from my point of view. I think his leadership is unique and outstanding.

Do you think India can be a destination for technologies in the future?

India has all the ingredients to absorb technology. The next step is the make in India step which is to integrate technologies and build them. India already has the technology base in materials, metals, electronics, and software. The question is how they get integrated and built. I think we can play a role there as a company that does that.

The Indian Air Force is looking for a twin-engine fighter aircraft as well as a single-engine one. Can Boeing do anything for the Make in India programme?

It is obvious to me there is active interest in more fighters. I am confident that however it shapes up Boeing will have a fighter that can meet the requirement. What is different is our commitment to indigenise the manufacturing of this fighter. Our proposal will involve both a state-of-the-art fighter as well as transfer of a significant amount of the production, which will be broad-based and include industries as well.

Can we say the Boeing chairman is inclined to make F/A-18 in India?

I think whichever system we offer make in India will be an important part of it. If F/A-18 were our offer, a significant make in India part of the proposal will be there.

Has there been an improvement in the way the bureaucracy in India responds?

I would sight the offset requirement, which is often the most bureaucratic process. They have listened to people like us, and made some improvements. There is a dialogue. Before, there used to be take-it-or-leave-it. I see signs that I have not seen in 35 years. Is this as far as I want to go? No. But is it a good sign? Yes. And do I see the PM leading it? Yes.

Moving from defence, Air India has been having issues with the Dreamliner.

We are going through some normal teething problems. We are working very hard with Air India and 45 other customers around the world. Things are improving significantly. The full promise of this airplane will be met with all customers including Air India.

In the market, Airbus seems to be a little ahead of you.

Airbus has sold an extraordinary number of narrow body A320s to one customer here. I congratulate them on their success, But, if you look at the global market trends, it tends to even out over time. This is a global product. I am confident that our lead in commercial airplane production can be maintained.

Your sourcing from India has doubled. How do you see it moving in the future?

I see it going up significantly. Right now we have half a billion dollars a year. But we have a pipeline of another couple of billion dollars of opportunity.

Listening to you one gets the impression that India will not remain just a major buyer for Boeing but also become...

(cuts in) An industrial partner? Yes.

Does that tie in with what you said in July that you were looking to move some key pieces of operations to other countries?

I can’t remember what I said yesterday (laughs). Yes, it does fit. The centre of our development and manufacture will remain in the US. But increasingly we will use partnerships around the world to make in those countries and design in those countries. In India I see the single biggest opportunity to do that.

You see opportunities to design as well in India?

Yes, I do. We have deep affiliations with every IIT in the country, and the science single university (IISc). You will see from us over the next year a significant deepening of our engineering engagement here. I am not prepared to say anything more right now.

Your tie-up with HAL was facing quality issues.

We all have quality issues from time to time. They are a very good partner.

Your partnership continues?

Yes.

India is seen as a difficult place in which to do business. What should be done?

You can maximise your opportunity if you modernise your tax regime. Some of the regulatory policies can be streamlined. If the offset obligation can be managed better...those mundane sounding things are very important.

Did you take up these issues with the Prime Minister?

It was generally discussed. The good thing about him is that he seeks everybody’s opinion. I am not special. I just happened to be visiting yesterday.