CNBC's premier morning financial news talk show, Squawk Box, featured the Blackwater chairman on August 14, 2008, in as wide-ranging an interview that seven minutes would allow.
Among the points Prince raised in the interview, prompted by the three co-hosts:
On commitment: "Our guys take tremendous risks. Many have paid the ultimate price. Many have given parts of themselves in the process."
On business expansion: "We’re certainly not focusing as much on security going forward because we take a lot less grief. … It hammers our ability to raise capital. Our training site is growing like crazy, our aviation is growing a lot."
On whether an Obama administration would affect Blackwater's security contracting in Iraq: "All of it is competitively bid. Whoever takes over in January, the US government unfortunately is not going to be born again hard fast innovative and efficient. Someone’s going to do the work. The private sector’s going of be a part of it."
On profitability: "The margins aren’t nearly as good as you think. Law firms, PR firms and accounting firms have much better margins than we do." (Hmm - that raises the question: Is the taxpayer getting a good value in services performed by law firms and accounting firms under federal contract? A Congressional Budget Office study might be revealing.)
On the entry of big, publicly-traded defense contractors to the security area: "We’re uniquely positioned because we have a large facility. No one’s made the investment in the assets that we have. Even our big competitors, the Lockheed Martins, the Northrop Grummans of the world, they are running hard to get into this space but I’m surprised their risk management boards let them do that. They’re one incident away of being filleted in the media like we were."
Here's the direct link to the video: http://www.cnbc.com/id/15840232?video=823818699.
Thursday, August 14, 2008
Thursday, July 24, 2008
Prince explains future of Blackwater business
In a July 2008 interview with the Associated Press, CEO Erik Prince explains how he sees the future of Blackwater's business in the security, training, aviation and logistics sectors.
Click here for the video: http://abclocal.go.com/wjrt/story?section=news/national_world&id=6279116
Prince gives reasons for why the security part of his business will decline, the main ones being the lack of growth potential, the markedly improved situation in Iraq which hopefully will reduce the need for Blackwater's protection services, and the higher potential of other sectors in which the company excels. Prince adds that the legal and congressional complexities relating to protecting US diplomats and VIPs in Iraq serves as a "disincentive" to any private provider and would put an entire company at risk.
In addition to the security work for which the company is famous, Prince mentions a few other programs, including on in Afghanistan to resupply US and coalition troops with food, water, supplies, ammunition, mail and other necessities in farflung forward operating bases.
He refers to the cost savings of contractors versus the traditional way of doing things in the military. For example, he says, Blackwater did 11,000 aviation missions in Afghanistan last year, hauling 9.5 million pounds and delivering another 1 million pounds by parachute for less than the cost of one Air Force C-27 cargo plane now being built for short-haul military missions.
"It's a pretty simple operational issue and a very simple math question, as to why it's of benefit to the US government to go to the outside to do that mission," Prince says.
Regardless of who becomes president next year, he says, the US "is still going to need a lot of this kind of work done, and companies like us are going to be necessary to do the work."
Click here for the video: http://abclocal.go.com/wjrt/story?section=news/national_world&id=6279116
Prince gives reasons for why the security part of his business will decline, the main ones being the lack of growth potential, the markedly improved situation in Iraq which hopefully will reduce the need for Blackwater's protection services, and the higher potential of other sectors in which the company excels. Prince adds that the legal and congressional complexities relating to protecting US diplomats and VIPs in Iraq serves as a "disincentive" to any private provider and would put an entire company at risk.
In addition to the security work for which the company is famous, Prince mentions a few other programs, including on in Afghanistan to resupply US and coalition troops with food, water, supplies, ammunition, mail and other necessities in farflung forward operating bases.
He refers to the cost savings of contractors versus the traditional way of doing things in the military. For example, he says, Blackwater did 11,000 aviation missions in Afghanistan last year, hauling 9.5 million pounds and delivering another 1 million pounds by parachute for less than the cost of one Air Force C-27 cargo plane now being built for short-haul military missions.
"It's a pretty simple operational issue and a very simple math question, as to why it's of benefit to the US government to go to the outside to do that mission," Prince says.
Regardless of who becomes president next year, he says, the US "is still going to need a lot of this kind of work done, and companies like us are going to be necessary to do the work."
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