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ba systems uh PLC is the world's third
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largest Aerospace and defense company uh
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we have our Roots back as far back as
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500 years with royal ordinance uh in the
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1500s and we are the world's um largest
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Global uh defense company the only truly
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Global defense company we have a very
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large footprint here in the United
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States in fact about 60% of our revenues
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hail from here in the United States uh
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in our in our entity called ba Systems
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Inc which has grown very very rapidly
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over the years um since the year 2000 we
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were approximately two billion dollar in
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size then and today we're we're 20
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billion in size um about 50% of that has
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been through organic growth and the rest
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through Acquisitions so in that time
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frame that amounts to about uh
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18 Acquisitions that we've done in that
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time frame not looking to slow down at
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all anytime soon uh we are essentially a
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cradle degrave defense company we make
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everything from aircraft carriers to
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destroyers ships aircraft fighter
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aircraft um defense Electronics uh main
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battle Vehicles like the Bradley uh
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fighting vehicle and the Mr wraps which
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have been saving thousands of lives in
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Iraq and Afghanistan this past couple
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years um and then aot lot of the
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services activities so basically cradle
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to grave um and we are we are the
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company that feels like we've got a lot
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of momentum we've got about 100,000
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people working for the company uh
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dispersed throughout a 100 Nations
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worldwide and we op operate primarily in
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six home markets around the
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world the impact actually to date um has
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not been too severe we monitor it very
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closely um it has affected Us in in
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terms of our stock I think across the
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board the Aerospace uh and defense
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industry has been hit about 30% um not
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too significantly different than others
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however I think that defense is
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typically a cyclical stock counter
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cyclical stock to the other Mark uh uh
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stocks in the market and so when the
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market does tend to soften if anything
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defense tends to do relatively well
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we're relatively stable stock um as an
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industry so I think we'll pretty much
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weather the storm depending on how
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severe it in fact gets from Beyond where
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we are today um we think as we monitor
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it that could be some potential downside
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post 2011 but right now we think it'll
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be relatively minor in the scheme of
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things um we have always kept a very
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close eye on controlling cost and so we
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tend to be very lean in our in our
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operations and a great example of that
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is our Us corporate headquarters uh here
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we are at 20 billion in the US and we
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have a very lean corporate headquarters
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um and tend to try and keep cost very um
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small and very lean um and just focus on
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reinvesting in R&D and and what we can
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do for the customers and one of the best
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ways that that has manifest itself for
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us is we take a lot of the the funds we
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could have in investing in in buildings
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and operations and we invested in the
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R&D side and and a program where we've
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done that over the last year and a half
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has been a program called the MP program
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and so for the first time in the history
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of the Pentagon we have um at their um
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encouragement created uh invested a lot
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of our own hundreds of millions of
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dollars of our own nickel UPF front with
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no contract um on the come and it ends
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up that because we did that we won three
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of the five variants that they awarded
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and we feel it's been a a huge um
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benefit to both the Pentagon to us and
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we've saved somewhere probably
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approximately about 2,000 lives in the
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last year as a result of those programs
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of that particular
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program I think the industry is going to
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have a um is going to be facing having
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an evolution in terms of I think
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historically particularly over the last
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20 to 25 years we as an industry are
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focused very heavily on um on pure
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defense and because the defense Market
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relative to the markets in general is
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relatively small There's an opportunity
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for people to begin to move increasingly
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into adjacent markets and and with this
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Administration they are embracing that
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so it's some some things in the soft
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power side um so whether it be
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alternative energies um um diplomacy
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side State Department elements usaid I
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think there's going to be quite a few
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opportunities and you've seen elements
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of this occurring over the last year or
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so with companies increasingly looking
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at small Acquisitions that expand that
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footprint form so it's not going to be
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just purely looking the stove pop pipe
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of the of the battle space but looking
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across the the the defense and Aerospace
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Continuum that is both the battle space
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the transition space and the PE
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space we manage Innovation any number of
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ways U given our broad footprint here in
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the US uh in particular our division in
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um that historically has been based in
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nashille and New Hampshire called
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Electronics um uh Integrated Systems has
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been focused on doing a great deal of
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R&D that's largely been their Heritage
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and they have made numerous Acquisitions
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over the years particularly smaller
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Acquisitions and when we do Acquisitions
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at ba systems we have been really
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desirous of integrating those
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Acquisitions quickly and completely and
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increasingly we realize as big as we
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have gotten at 20 billion that and with
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some of these companies you run the risk
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of crushing them so as we've made some
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of these Acquisitions we contined to
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give them some degree of autonomy uh to
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ensure that we don't crush that
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entrepreneurial spirit and that they
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continue to do really good things for
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the customer so that's been a big
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primary focus for us in wanting to make
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sure as we get so big that we don't lose
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that that Innovation another element is
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what we call it's the um National or
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actually now international program
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called first which is a program that
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we're one of we are the lead sponsor on
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stands for for recognition uh for
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inspiration recognition for for
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inspiration recognition in science and
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technology which which is a program that
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works with high schools around the world
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increasingly where Engineers across
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industry team with these high school
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kids over a period of several months and
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help them um and advise them Mentor them
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and show them as they're putting
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together their various projects um that
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ultimately go into a competition at the
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Georgia Dome with 70,000 kids from
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around the world it is all about gen um
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investing in the next generation of
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scientists and engineers and
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mathematicians technologists to to make
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sure that America keeps its Edge in
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particular uh and that we we continue to
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put our focus on the priorities of
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Science and Engineering not just on the
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entertainment world or the sports world
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as a as a
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nation we differentiate ourselves
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primarily given our Global footprint we
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uh we're quite proud of the fact that we
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believe we are the only Global defense
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industry that there is um and we operate
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in what we refer to as six home markets
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so that is the UK the US Sweden South
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Africa um Saudi Arabia and Australia
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and what we have done effectively in
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those countries with the US probably
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being the Bell weather of all of those
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is through largely through our um
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through acquisition growth we have gone
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in and and grown in in countries where
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we um it's a home it's a home tailored
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approach so in the US market where we
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have in the US team where we have 56,000
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employees 50,000 of them are Americans
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and that's important we've done we're
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increasingly doing the same thing in
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Saudi where we are what we referring to
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is the saudization of Saudi AR Arabia
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where currently we have about 50% of our
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Workforce there it's approximately 1600
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employees 50% of them are Saudi
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Nationals um and we are trying to take
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that up to 75% same thing as we've grown
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in the other markets around the world so
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we are looking to to have that Global
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footprint and where it has benefited us
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is because of that Global footprint
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we've been able to be much more
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efficient and effective in our delivery
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of products and services for the US
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customer a great example when we um made
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the investment we did several years ago
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in the imra imra program to counter the
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IED impacts in in Iraq and Afghanistan
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the only reason we were able to do that
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um the customer put out a ultimately a
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procurement um uh campaign and typically
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to do something of that magnitude would
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take several years to Fu the product and
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because of our Acquisitions we were able
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to knit together our our divisions in
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South Africa in Sweden in cely Texas
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Santa Clara California York Pennsylvania
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and then multiple other sites between
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London and the rest of our US market and
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bring be together a global team and
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field a product in two months which was
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unheard of in the history of the
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industry time zones time zones are the
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major difficulty in uh managing across
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um an entity the size of ours given the
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fact that we have a footprint in a 100
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Nations um it is very challenging it's
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also really exciting um we are in in an
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industry that likes to think of itself
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as Global but frankly in the defense
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industry we're not Global and we never
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should be Global we should be
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multinational at best and so when we
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work with the Nations that we do it's
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with our allies so particularly the UK
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where our parent is based we um have
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worked very closely with them we
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discover that uh English is not a common
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language and we're separated by a Common
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Language but it's actually been the most
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incredible experiment I've experiment
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I've ever been a part of um I've worked
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for the company nine years now and it is
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amazing how we have been given some
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opportunities I I think probably more so
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than anybody else given our our Global
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footprint in the Acquisitions to do some
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things that are pretty intriguing um and
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and just have profound impact or
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potential impact for the war Fighters uh
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going forward um we're always challenged
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means we have a lot of travel I just got
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back last night from a very long trip to
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the UK um but there's a real opportunity
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for us to try and make a difference and
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frankly the last time we went to war
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without particularly the British as our
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allies um It's Kind you're hard pressed
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to think of when that was so we don't
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fight our Wars without our allies so
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increasingly we look at as an
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opportunity to be much more effective
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and efficient in terms of how we do our
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manufacturing and our delivery to
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customers for more business news and
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Analysis from knowledge at Wharton
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