RIYADH – BAE Systems, one of the world's largest and most geographically diverse defense and security companies, has a total investment amounting to SR18 billion in Saudi Arabia in the last five years, said Jim McDowell, Managing Director and Chief Executive of BAE Systems, Saudi Arabia. "These investments have helped to create partnerships with local offset companies which BAE Systems can utilize within its supply chain," he told the Saudi Gazette in an exclusive interview. McDowell said that BAE Systems has decided to invest this huge sum of money within the Kingdom because it recognizes the importance of the Saudi market for defense and security needs. He added that BAE Systems wants to ensure that it can partner with homegrown industry to meet the Kingdom's current demand, as well as any future defense and security requirements. Foreign investment will further develop and sustain the domestic industrial capability and ensure that a larger number of Saudis will be able to be trained to form a skilled workforce. McDowell pointed out that these investments in Saudi Arabia are similar to what the company has done in Australia, India, the United Kingdom and the United States of America since these five countries have been identified by BAE Systems as being significant to the future of their business. They are referred to within the company as home markets since the company is seeking to establish indigenous businesses in market segments to ensure that local needs can be satisfied. "Because the Kingdom was thought of as having the potential, the company has embarked upon this investment policy. BAE Systems has been here for almost 40 years, primarily in the procurement of aerospace business, buying aircraft, systems, and offering support to the Royal Saudi Air Force (RSAF), and to a limited extent to the Royal Saudi Naval Force," he said, outlining the services of his company in the Kingdom. "We believe that the business is going well. The business is now supplying the Typhoon aircraft which are considered to be one of the most technologically advanced aircraft in the world, to the Royal Saudi Air Force. Also, we are the supplier of the Hawk aircraft, an advanced training aircraft, and the business has just signed an agreement to supply the most up-to-date version of this aircraft to the RSAF, " he added. McDowell pointed out that BAE Systems is a private company which was founded in United Kingdom and later expanded globally. He added that the shares of the company are traded on the London Stock Exchange and that the company is ranked second after Lockheed, among the major defense companies in the world like Boeing, Lockheed, General Dynamics, and others. "As our business has expanded within the Kingdom, so has the workforce. Today we employ over 5,000 people and 60 percent of them are Saudis. We are also one of the few companies that have operations in various locations of the Kingdom, which helps to ensure that the whole country, rather than just the major cities benefit from the employment opportunities we can offer," McDowell said. "We have been increasing the Saudi component in our workforce steadily, and we aim to continue to increase our Saudization levels in the future. Currently I feel a Saudization rate of 75 percent could be achieved, but I am not sure that we would go much beyond that," he added. Dismissing the notion that the presence of Saudis in a sophisticated company like BAE Systems is just decoration since they are mostly assigned low ranking jobs, McDowell said decisively: "No, not at all. Saudis are holding all sorts of positions just like expatriates. We have Saudis at all levels in the business right up to members of my management committee." "For example, my vice president for engineering is a former Royal Air Force officer. In addition, we employ may Saudis who are engineers, project managers, accountants and legal officers," he added. "We are particularly proud of the technicians we have trained who work and maintain the capabilities of Royal Air Force. In fact we are continuing training people for other jobs like management and leadership positions, accounting, law, and project management, and English language, and so on," he pointed out. On the news that BAE Systems has started to employ female staff, he said: "This employment is at a very small scale to start with and we want to make sure we get this right. At the moment they are 15, mostly at the back office, in charge of human resources applications and handling accounting documents." McDowell spoke on his company's contribution to the local industries and economy. "Some of the companies that we have shareholdings in, like ISE, supply all our back office IT needs. On the other hand, we subcontract a lot of work to AACC and AEC who themselves employee many hundreds of employees, he said. "In addition to that, of course, we have supply chain, where we buy parts and components for our aircraft from Saudi companies. Also, we buy from them offices, furniture. So, we contribute to the local economy by employing over 5,000 employees, by training thousands, by the supply chain, as well as by directly providing employment," he stressed. The BAE Systems chief executive strongly stressed the role of his company in building capabilities of Saudi workforce through training, considering it as an outstanding contribution from his company to Saudi economy. "Well, we train people to work for us, and we also train them to serve their country in the Air Force and in the Navy. When they leave their jobs, they go into other jobs where the skills they learnt from BAE Systems are also utilized. During the four decades of our presence in the Kingdom, we have trained over 20,000 technicians in vocational type of training, focusing mainly on language skills, trade skills, and engineering skills. Some of them stayed in the air force, and some of them joined airlines, and some of them went to other industries. Because of this, we believe that our training is doubly beneficial to the Saudi economy, "he said. McDowell dismissed accusations that multinational companies such as BAE Systems are only concerned with milking economies where they operate and don't invest enough in the local community. "Well, we have to make a profit for our shareholders, but I view the business has needing to satisfy three major stakeholders. Obviously, we have to satisfy the customer by the goods and services delivered to them, the shareholders by the return on their investment, and our employees, so we can retain their services," he said. "So, we are contributing to the local economy. And this explains why we are having so many Saudi employees compared to some of our foreign counterparts. Plus, we contribute to the local communities through various type of corporate or social initiatives," he further said. Shedding lights on the social responsibility of BAE Systems to local communities, McDowell said: "We are doing a lot in this regard. For example, we are supporting educational initiatives like postdoctoral program and sponsoring undergraduates for study at universities. For example, under our postdoctoral sponsorship program, we have sponsored this year 25 Saudi scholars from various Saudi universities to undertake summer research trips to UK under a partnership with the British Council. Since 1991, we have been sponsoring Saudi scholars under this program which we have backed since its inception in 1989 and has helped 453 Saudi scholars conduct research which has been vital to development of the Kingdom." "Also, we have established associations with seven Saudi universities. Every year we sponsor Al Janadriyah festival for culture and heritage, because we believe it is a key cultural festival for the Kingdom. In order to help support responsible behavior for businesses within the Kingdom, in 2012 BAE Systems is the sponsor for Saquia's Responsible Competitiveness Index, which encourages companies to have good governance, and include social responsibility elements in their decision-making processes. Further we sponsor variety of awareness activities like breast cancer programs, road safety campaigns, and anti-smoking drives and the like," he added. McDowell stressed that the biggest social responsibility of his company as an employer based in Saudi Arabia is to provide jobs, training, and long-term employment to Saudis, and in doing this, the company is assisting Saudi society as well as the Saudi national economy. On his company's contribution in the technology transfer to the Kingdom and the ability of Saudi nationals to perform these duties, McDowell said: "We are transferring the skills and capabilities to maintain and upgrade very sophisticated military aircraft. This task is one which should not be underestimated. These are tremendously sophisticated pieces of hardware and software. However, we have made significant progress in training local employees to maintain, sustain, and to upgrade those platforms." "The Saudi workforce has already displayed a great deal of competence in adapting to the sophisticated technologies that are being transferred. We are supporting this transfer with training to ensure the transfer of technology is effective and permanent. Once trained, our employees, no matter what their nationalities are, perform to international standards," he added. "The history and work of BAE Systems in the Kingdom has always been based on the relationship between the United Kingdom and Kingdom of Saudi Arabia. This relationship remains strong and we hope that the work that BAE Systems, and the work that our employees perform, help to reinforce this unity even further," McDowell concluded.
