New business deals strengthen Saudi-Boeing partnership, says CEO

Boeing Chairman, President and CEO Dennis A. Muilenburg.
Updated 29 May 2017

New business deals strengthen Saudi-Boeing partnership, says CEO

RIYADH: The defense and commercial agreements announced and endorsed during the visit of US President Donald Trump will further strengthen Boeing’s partnership with Saudi Arabia, create and sustain thousands of jobs in both countries, and enhance national security in the region.
These remarks were made by Boeing Chairman, President and CEO Dennis A. Muilenburg in an interview with Arab News in Riyadh.
Muilenburg, who was in the Saudi capital to participate in the Saudi-US CEO Forum on the sidelines of President Trump’s visit, said: “These announcements reaffirm our commitment to the economic growth, prosperity and national security of both Saudi Arabia and the US.”
Deals with Boeing were among the reported $380 billion in agreements signed or announced during Trump’s high-profile visit to Saudi Arabia on May 20-21.
Muilenburg said that President Trump and US Secretary of State Rex Tillerson were joined by King Salman at a signing ceremony for deals that included Boeing products and services.
He pointed out that agreements were made to purchase Chinook helicopters and associated support services as well as guided weapon systems. He also referred to Saudi Arabia’s intent to order P-8 maritime, patrol and reconnaissance aircraft, which are based on the Boeing 737 commercial airplane. This is in addition to a joint venture with the Kingdom to provide sustainable services for a wide range of military platforms. “The agreement also supports Saudi Arabia’s efforts to grow its indigenous aerospace industry and ecosystem through its Vision 2030 initiative,” he noted.
The Boeing chairman said that an agreement between Boeing and SaudiGulf Airlines has been endorsed “to negotiate the sale of up to 16 wide-body airplanes.”
Muilenburg, while speaking about several joint agreements signed between the Kingdom and the US, added: “I appreciate the efforts of King Salman, President Trump and his administration to support American manufacturers as we seek to grow at home and around the world.”
Commenting on the Boeing’s long historic relationship with Saudi Arabia, he said that “Boeing enjoys a long and important relationship that dates back more than 70 years to 1945 when US President Franklin D. Roosevelt presented a DC-3 Dakota airplane to King Abdul Aziz.”
He added: “Not only did this historic airplane delivery mark the beginning of the Boeing relationship with Saudi Arabia but it represented the dawn of commercial air travel in the Kingdom.”
Muilenburg said that Saudi Arabia and the US have been close security partners for decades, contributing to regional and global stability and prosperity. “Boeing has stood alongside this partnership delivering advanced defense products and services to the Kingdom,” he said, adding that the relationship strengthened in the late 1970s with the acquisition of F-15 fighter aircraft that became the backbone of Kingdom’s air defense.
Muilenburg said that the Boeing-Saudi relationship has “expanded to include additional fighter aircraft, commercial-derivative military aircraft, weapons and vertical lift platforms.” He further pointed out that Boeing continues to grow in the Kingdom with the creation of joint-venture companies such as Alsalam Aerospace Industries (AAI) and the Saudi Rotorcraft Support Company (SRSC) together with longstanding research and development initiatives with Saudi universities.
Asked about Boeing’s support for Saudi plans to develop technological capability and create jobs for Saudis, he said: “We are fully aware of the importance of local partnerships and are committed to growing the Boeing presence in the Kingdom…”
Boeing supports work to develop infrastructure and strengthen competencies in the aviation sector, while the company enjoys a “Nitaqat” platinum rating for its Saudization efforts, Muilenburg added.
He recalled that Boeing and local partners began a formal program by creating four industrial projects to benefit the Kingdom during the 1980s. These projects are AAI, Advanced Electronics Company (AEC), Aircraft Accessories & Components Company (AACC) and International Systems Engineering (ISE).
Boeing chairman noted that his company has been able to finalize the commercial registration certificate at the recent Saudi-US CEO forum.
Boeing currently holds the largest stake at AAI and the company continues to contribute to the expansion of the technical base of both civil and military applications. The conversion of F-15S models to the F-15SA will also be done by AAI. Other Boeing defense products in the Kingdom include E-3A Airborne Warning and Control System (AWACS) aircraft, KE 3A cargo/tankers, AH-64E Apache attack helicopters, and missiles and launchers.
Asked about the possibility of setting up a manufacturing facility in the Gulf, Muilenburg said: “Boeing has partnered with local entities such as AAI to manufacture major parts of the F-15SA including the forward fuselage, pylon and wing assembly.”
The recently formed SRSC will provide more opportunities for the joint-venture companies AAI and Saudia Aerospace Engineering Industries (SAEI) to work with engineering students, providing opportunity and experience, Muilenburg explained.
He also renewed his pledge to build local Saudi capabilities and said that “Saudi Arabia enjoys some very promising talent and my message to them is to make every possible effort to learn and take an active role in the development of the Kingdom.”
He added: “Boeing will support Saudi youth through the provision of progressive training programs and build local capabilities that allow them to enhance their academic, personal and professional skills, to become a skilled contributor and have a positive global impact.”
In reply to a question about corporate social responsibility (CSR), the Boeing chief said that “the communities where Boeing operates around the world are among its most important stakeholders and corporate citizenship is as integral to the company as is our expertise in flight and technology.”
Boeing’s Gulf Cooperation Council (GCC) program partners with organizations across the region including those in Saudi Arabia, the UAE, Qatar, the Palestinian Territories and Jordan, he added.
He pointed out that Boeing is an active member of the community in Saudi Arabia, focusing on education, health, humanitarian services and supporting a number of non-profit organizations.


New emissions blow for VW as German court backs damages claims

Updated 26 May 2020

New emissions blow for VW as German court backs damages claims

  • Scandal has already cost firm more than €30 billion; ruling serves as template for about 60,000 cases

KARLSRUHE, Germany: Volkswagen must pay compensation to owners of vehicles with rigged diesel engines in Germany, a court ruled on Monday, dealing a fresh blow to the automaker almost 5 years after its emissions scandal erupted.

The ruling by Germany’s highest court for civil disputes, which will allow owners to return vehicles for a partial refund of the purchase price, serves as a template for about 60,000 lawsuits that are still pending with lower German courts.

Volkswagen admitted in September 2015 to cheating in emissions tests on diesel engines, a scandal which has already cost it more than €30 billion ($33 billion) in regulatory fines and vehicle refits, mostly in the US.

US authorities banned the affected cars after the cheat software was discovered, triggering claims for compensation.

But in Europe vehicles remained on the roads, leading Volkswagen to argue compensation claims there were without merit. European authorities instead forced the company to update its engine control software and fined it for fraud and administrative lapses.

Volkswagen said on Monday it would work urgently with motorists on an agreement that would see them hold on to the vehicles for a one-off compensation payment.

It did not give an estimate of how much the ruling by the German federal court, the Bundesgerichtshof (BGH), might cost it.

Volkswagen shares were 0.5 percent lower. The BGH’s presiding judge had signaled earlier this month he saw grounds for compensation.

Costs mount

“The verdict by the BGH draws a final line. It creates clarity on the BGH’s views on the underlying questions in the diesel proceedings for most of the 60,000 cases still pending,” Volkswagen said.

A lower court in the city of Koblenz had previously ruled the owner of a VW Sharan minivan had suffered pre-meditated damage, entitling him to reimbursement minus a discount for the mileage the motorist had already
benefited from.

The court at the time said he should be awarded €25,600 for the used-car purchase he made for €31,500 in 2014.

“We have in principle confirmed the verdict from the Koblenz upper regional court,” said BGH presiding federal judge Stephan Seiters.

Volkswagen had petitioned for the ruling to be quashed altogether by the higher court, while the plaintiff had appealed to have the deduction removed.

A Volkswagen spokesman said that outside Germany, more than 100,000 claims for damages were still pending, of which 90,000 cases were in Britain.

The carmaker also said it had paid out a total of €750 million to more than 200,000 separate claimants in Germany who had opted against individual claims and instead joined a class action lawsuit brought by a German consumer group.

The carmaker said last month it would set aside a total of 830 million for that deal.

In a separate court, Volkswagen agreed last week to pay €9 million to end proceedings against its chairman and chief executive, who were accused of withholding market-moving information before the emissions scandal came to light.