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Tue 7 Jun 2011 04:08 PM

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Man on a mission

As Gulf defence budgets bulge, US manufacturing giant Raytheon has its own secret weapon. US Army veteran Kevin Massengill’s contacts at the highest levels of government will stand the firm in good stead

Man on a mission
French fighter jet targets Libya no-fly zone

It’s less than a minute into our discussion, and Kevin Massengill has already neatly segued into the Islamic doctrine of abrogation. While this may be unsurprising coming from a student of famed Princeton Islamic historian Bernard Lewis, it is slightly disconcerting hearing it from someone who is also a former lieutenant colonel in the US Army’s Ranger Battalion, and the current head of Raytheon — the world’s largest missile maker — operations in the Middle East and North Africa.

But then Massengill is, by any definition, a man that breaks the mould. At around two metres tall, he has a vice-like handshake. And at his chair-less office in Abu Dhabi, he stands foursquare behind a tall desk, from where he is able to direct his considerable local experience to good effect for the giant US manufacturer.

Massengill is a good talker, as well. After finishing his company commands in the US Army, his facility with languages — he is fluent in Russian — led to an eighteen-month secondment to specialise in Arabic, both at Princeton and on a sabbatical travelling around the Middle East.

“After you’ve done that, you spend the rest of your career working in either embassies or the unified command headquarters of the combatant commands — back and forth,” he recalls. “You basically become a regional specialist, an area adviser. I finished up here in the embassy in Abu Dhabi serving as an adviser to the UAE military on how to train, integrate their systems, and how to get the training they needed — for example, their Air Force pilots getting ready for the F-16 [fighter jets].”

The Raytheon executive’s move to Abu Dhabi was one that has since defined his life. He is quick to commend the country not only as a great place to do business, but also adds that he has been proud to put his two children through the capital’s schools. Indeed, he even served as chairman of the board at the American Community School — one of Abu Dhabi’s finest — for a period of five years.

More than most expatriates, Massengill has completely subsumed himself into the life of the region. In an interview with CNN in 2006, he argued the UAE’s case cogently and passionately during the DP World controversy with the US, but his ties with the country have also extended beyond just words.

During the US-led invasion of Iraq in 2003, he helped coordinate an Emirati-led humanitarian mission to Baghdad.

“You may recall Sheikh Zayed had directed that the Emiratis put a hospital into Baghdad at the very beginning of the movement into Iraq,” says Massengill. “He was very concerned about the humanitarian crisis that might result in the collapse of the medical infrastructure. So I took a team of Red Crescent officials in with an Emirati general, we went in with civilian clothes and scouted the city before US forces had even arrived.”

The Emirati team identified the correct location, and poured in significant amounts of money, equipment and personnel, completely revamping the hospital originally run by Uday Hussein in the chaos of the wartime city.

No wonder, then, that when Massengill had completed his service with the US Army, his request to stay in Abu Dhabi was welcomed.

“When I was eligible to retire, I retired in place, and went to the Crown Prince and the service chiefs, and the US ambassador and asked their blessing to stay — well, I had a lot of their proprietary information in my head,” he jokes. “So I opened a company and did some private equity work here with some of the sovereign weath funds and also did some defence and security work in New Delhi where we had opened an office as well.”

A few years later, Raytheon came knocking. The company, which sold $25bn worth of equipment and services in 2010, sits alongside Lockheed Martin, Boeing and Northrop Grumman as one of America’s biggest defence manufacturers. From missile systems to cybersecurity, and from radar to training services, Raytheon’s product line is of particular interest in the Middle East, as the Gulf countries, in particular, step up their defence spending.

“We see this as an important growth market. The Middle East with its hydrocarbon wealth and fairly existential threats will lead the league along with Asia because of some great free market positioning in China and India, robust markets that are growing into their own,” Massengill says. “Those countries will see a boom in spending. Europe and North America, with their sclerotic older advanced welfare economies are going to suffer for a while, especially due to this recession.”

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Massengill won’t provide an exact figure for Middle East and North African sales for Raytheon, but says that both the Middle East and Asia are the highest-growth areas for the firm. Frost & Sullivan research claims that GCC and Jordanian defence spending will rise to $68bn this year, and up to $100bn by 2015 – a massive sum in an age when conventional defence equipment purchasers are reining back on spending.

For Saudi Arabia alone, US Congress is currently considering up to $60bn in defence equipment sales, with Raytheon’s portion of that sum estimated at around $4bn.

“We have a number of things that we’re pursuing not just for Saudi Arabia but for the whole region,” Massengill adds.  “I’ve got a backlog of Congressional notifications like you wouldn’t believe, for everything from upgrades to Patriot [air defence missiles], sales of Patriot, and upgrades to the air warfare systems that hang on the bottom of fast-moving jets.”

In addition, the UAE is also on the brink of confirming the purchase of a Terminal High Altitude Area Defence (THAAD) system for around $7bn, which has been developed by Lockheed Martin in association with Raytheon, which provides radar expertise. Designed to protect the country’s airspace from overseas missile threats, THAAD will complement another deal — worth an estimated $3.3bn and signed in 2008 — to bring the famed Patriot air and missile defence system to the country. Raytheon will deliver the first components of the Patriot system to the UAE at some point this year.

Aside from the headline hardware, Raytheon also sees massive potential for cybersecurity deals in the Gulf. The firm manages all US intelligence networks and moves their data.

“We’re talking about a pedabyte. That’s so big that if it were a file on your iPod, it would take you 32 years to listen to it,” Massengill says. “Moving a pedabyte with the stroke of a key — it’s an art. It’s all about protecting those systems from getting penetrated, and being able to know how to get in. While we’re most famous as a missile company — that’s the thing that people most visually see, a Patriot intercept of a Scud missile — I think one of our core capabilities is in data, moving it around and protecting it.”

Massengill adds that the UAE is also “very interested” in Raytheon’s training technology, particularly what he refers to as ‘the Star Trek holodeck’. Trainees — whether FBI agents, NASA astronauts or infantrymen — can don a headset and immediately find themselves in a virtual reality world that can reproduce anywhere from an Afghan village to the White House.

“They’ll wire up arms and legs with small shock pads or stem pads so that if you get hit by a non-lethal blow, you’ll lose the use of that limb briefly,” he says. “The adrenaline rush that comes from that, the respiration increase, these are all major impacts on small motor skills. For a former infantry officer, these are the kind of things that you try to replicate when training. There is nothing more realistic than this.”

But Massengill is also keen to focus on the practical benefits for Gulf countries that ties with the big US manufacturers can bring. Under offset agreements, the move to purchase billions of dollars worth of defence equipment is accompanied by the development of indigenous expertise, which creates both human capital and much-needed jobs. Raytheon is pushing that envelope by having local engineers from Emirates Advanced Investments (EAI) co-develop the Talon laser-guided rocket technology in Tucson, Arizona. But Massengill says that the partnerships don’t stop there.

“It’s also about the education establishments. If you’re trying to defend and develop a country, you have to have a cadre of scientists, engineers and mathematicians,” he says. “This is a very big deal to Raytheon — it’s a core focus of ours in the US, and it’s a core focus of ours here.”

As a result, Raytheon has signed deals with the Abu Dhabi-based Higher Colleges of Technology (HCT), Abu Dhabi University and Khalifa University. The most recent product of those agreements has been the development of a Master’s degree in engineering at HCT in association with the iconic Johns Hopkins University in the US.

“There is no return other than to create a pipeline, a cadre of engineers that can move into our joint venture projects that we’re doing with EAI, perhaps Mubadala, perhaps International Golden Group,” Massengill says. “I’ve had friends of mine who run Emirati companies who tell me: ‘Kevin — we’ll hire every engineer you produce’.

“Most of these countries are interested now not just in what great technology and what price they might get from a company; they’re interested in that third component – industrial participation,” he continues. “This is across the region. They’re looking at intellectual property, knowledge transfer, job creation and tech transfer. They’re looking for assistance in helping to develop their own nascent industrial base.”

The Raytheon executive is quick to say that the firm would probably be doing these kinds of industrial projects even if the mandate for that kind of work didn’t exist.

“That’s just good business. If you can develop a long-term partnership relationship with somebody, you’re there for the long haul,” he says.  “We’ve been in the region for 40 years now, and we don’t leave when things get difficult. When other companies are evacuating their people, it’s our technicians that stay behind and man the equipment that defends the country.”

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