by Gordon Gray
The media also love to talk about overseas “agents” as if they are the very scourge of humanity. In some countries, it is a legal requirement to operate through an agent. The agent forms a vital link between the supplier and the government. The agent ensures that things are done correctly and is there to ensure that the company follows the correct legal practices. If they do not, then the agent can be held responsible. If operating in a country where an agent is required, then naturally the agent will need to be paid for his expertise, time and work.
In other countries, it is illegal to have an agent. In such countries, the government prefers to deal directly with the overseas supplier and will point out the legal requirements directly to them. Such countries feel that they can conduct their business without the help of an agent. Every country can choose how it buys its defence systems as dictated by its history, culture, customs, and its own laws. It is their country and they can buy whatever they want, from whoever they want, however they want. To succeed in defence sales, it is better to accept that and abide by the rules.
Often we read in the UK press about supposed goings-on behind some of the really big defence deals, with all sorts of accusations about slush funds and of arms dealers bribing overseas government officials, or offering ‘inducements’ to these officials, such as entertaining them to dinner in return for ‘favours’. The press only look at one side of the picture so even if these incidents actually occur as reported, and few events ever happen exactly as reported in the press, what is never reported is the other side of the picture. The press never manage to learn about the work needed to win overseas contracts; the endless visits; the writing and rewriting and submission of proposals; technical evaluations, demonstrations, visits, debates with the customers about benefits and technology; and the efforts to counter what the foreign competitors are offering to try and win the order. We operate in overseas markets and must deal with what we find in front of us in those markets. We have to pursue our sales within the local laws and customs of the country, as well as within the UK laws on business ethics. All we can do is be aware that other countries do not follow UK laws on ethics. No country will change their culture, laws or procurement methods just to fit in with the views of a few misinformed people in the UK media.
On a few occasions over the years, I have been at meetings where the customer blatantly let it be known that if we did something personally for him, he could arrange a large order for us. In most cases it was so blatant as to be laughable and in all cases, all the ‘offers’ were sidestepped and no more was ever heard from the customer. In one case, we were asked to buy him a large riverside house on the Thames. He even showed us the estate agent’s brochure. End of prospect.
We did have one colleague though who, much to everyone’s amusement, liked to live the life of a clandestine arms dealer even though he was just a naval systems salesman who had been involved in the sale of radars to Middle East. He seemed to spend weeks in a couple of Middle Eastern cities, which we found odd as there was no imminent business in either town. We met him by chance in the Sheraton Hotel in one of these cities one evening. He insisted on sitting in one particular seat behind a large pillar in a dark corner at the back of the lobby.
“Why do we have to sit here?” we asked.
He leant forward towards us and glanced over our shoulders.
“Well,” he said in a hushed tone. “From here I can see who comes in the front door, I can see who comes out of the lift and I can see who comes up from the underground garage, but they cannot see me! I must never be seen, you see. You will never see me during the day as I really only work at night. I never know when the phone may ring in the night and I have to rush to a secret meeting somewhere. And, by the way, you have not seen me here no matter who asks you. Only my secretary ever knows where I am and how to contact me.”
Incredible, but that was how he saw his life. We left him to it but he was always just ‘double oh three and a half’ to us after that.
Camels and BBQs
In the days after the first Gulf War, there were a number of defence sales opportunities in the region and so large companies were targeted by local businessmen offering to sponsor or represent them in the Kingdom. In Saudi, a local sponsor was a legal requirement. On one visit we had three different project teams in Saudi, so there were probably about a dozen of us, including three directors, all in Riyadh. One such businessman made a heavy play to our directors to represent us and invited us all to a BBQ out in the desert. He also invited the British Ambassador and a number of the families from the embassy. After discussing the invitation with embassy staff, it was decided that we should accept. We were picked up at the hotel by a fleet of big Toyota 4x4s and taken out into the desert. A camp had been set up on a sandy hill overlooking Riyadh.
There were large tents for cooking and as we arrived, the BBQ was already sizzling away. There was a tent for drinks, a tent draped in pink for the ladies, as well as one for children and a tent for the men. All the tents were furnished with rugs and cushions. The BBQ was on an industrial scale. A number of big metal troughs were pushed together to form a line about 20 feet long. Some were loaded with juicy steaks and chicken joints. Others had corn on the cobs and vegetable kebabs. An oven was warming breads and rolls and a table was laden with bowls of salads and fruit. The smells and smoke from the charcoal and sizzling beef drifted through the camp on the balmy night air. Appetites were awakened and the drinks went down well.
Just away from the camp, in a small paddock, were two camels and a horse. The horse, we were told, was a pure Arabian thoroughbred. The ambassador was a known horseman and was offered the chance to ride it. This he accepted, giving us a riding display across the sands. The camels were from a large herd owned by the businessman. We looked at the camels warily and stayed in a close group well out of their reach and then watched as a small boy climbed into the paddock and started to milk one of them. Shortly afterwards, as we were watching the ambassador galloping across the sands like Lawrence of Arabia, a servant appeared with cups and a bowl of fresh, warm camel milk.
“You try, mister,” invited the servant, “it is very good.”
We tried it. It was very nice and reminded me of skimmed milk. It was not in any way unpleasant. Another first for me.
The evening went well; the food was plentiful, delicious and well cooked. Our directors sat with the businessman chatting, the embassy families kept to themselves in the family tent, and a few of us sat on rugs laid on the sand and watched the lights of Riyadh twinkling in the distance.
Abiding Memories
I remember the peace of Saudi. It always seemed to be quiet even in the cities. As the heat of the day eased and the pink sun set across the vast desert, the calls to evening prayer faded from the minaret loudspeakers and Riyadh settled peacefully into a slumber. Even walking round the souk or the modern shopping malls after evening prayers, it seemed peaceful and non threatening. We also found that when we went there for two-week trips, the lack of alcohol did us all good and we felt better for it. We also spent more time exercising in the gym or swimming, rather than drinking in a bar somewhere. Because of the strict Sharia laws, many visitors feel intimidated and fearful of being arrested on some strange charge. While that certainly happens and executions still take place after Friday prayers, you must know what you can and cannot do – though I never found Saudi to be stressful. I recall the kindness and friendliness of the people and their total commitment to Islam. We often said that if in the West we were as committed to Christianity as the Saudis are to Islam, we would live better lives and be in a better place and perhaps politicians would be a bit more committed to preserving a Christian society.
Interior Ministry, Riyadh
Masmak Fort, Riyadh
Old city of Diraiyah
Old Palace Diraiyah
CHAPTER 9
Egypt
‘URGENT’ it said on the telex RFQ (Request for Quotation). I took it into Bill.
“Bill, we have got this urgent telex RFQ from the Egyptian Navy HQ for minehunting sonars.”
“Don’t be stupid Gordon. Urgent is not a word in the Egyptian dictionary. In fact,” said Bill, reading it, “if you look in the file, I am sure you will find that they asked for the same thing about three years ago and we sent them a quote then.”
I checked and they had and that RFQ said urgent too. Things move slowly in Egypt.
Considering that it is so near to Saudi Arabia, its history could not be more different. Egypt is a country whose history and civilisation goes back over 5000 years. It is a country that grew rich on the fertility provided by the waters of the Nile and was one of the great civilisations of its time. The Great Pyramids and temples built in those times are still wonders of the world and reflect the huge wealth and knowledge that Egypt possessed. Today it does not have the wealth that Saudi has and many parts appear to be neglected and rundown, but it still plays a major role in Middle East politics with its large population and strong ties to Islam – but with a western tolerance factor applied. It has a much more cosmopolitan feel about it than Saudi has, but it is still a Muslim country.
New Minehunters
Back in Egypt, Plessey had a fine agent. A former senior Egyptian naval officer called Adel Moustafa. Adel was a kind, intelligent and dedicated man. He was also highly respected within the Egyptian Navy. I had known Adel for years and we got on well. He was extremely enthusiastic about our work. Now that Plessey had been taken over by Marconi, Adel remained as our agent.
However, the Egyptian Navy did now want to buy new minehunters which would be built by an American shipyard. The deal involved a very low-cost loan from the US Government but with strings attached. These strings meant that the Egyptians had to buy US-made equipment for the ships and could not choose, for example, UK-made systems. We already had arrangements in place with a Plessey factory in the USA where we could make enough parts of the systems to qualify as ‘US-Made’. In addition to the American companies that were bidding, the French were also bidding and had their arrangements in place for some of their naval equipment to be part-made in the USA so that they also ‘qualified’ for the deal.
Over a period of some months, we had been visiting the Egyptian Navy at their HQ in Ras Al Tin in Alexandria. Ras al Tin is a complex of building that used to form one of the palaces of King Farouk. It is situated out at the end of a promontory near the main port of Alexandria and is surrounded by the blue Mediterranean Sea. These visits had consisted of a combination of presentations and friendly, often informal, discussions with groups of officers, and then one to one discussions with the more senior naval staff. Whether it was the friendliness of the Egyptian Navy, or the seemingly endless warm sunshine and gentle sea breezes blowing in from the Mediterranean, I don’t know, but these meetings out at Ras Al Tin were always a pleasant experience. Eventually, the navy selected two preferred bidders. Plessey was one and the French were the other. It would now be left to the shipbuilder to select the winner after commercial discussions. Things moved slowly in Egypt and as Easter approached, no one believed that the discussions were going to start again until later in the summer.
I arrived home from the office on the Thursday of Easter week and was looking forward to a long weekend at home, when the phone rang. It was Adel, our agent, calling from Alexandria.
“The American shipbuilder is starting final comparison discussions with the French in Cairo on Saturday,” he said. “The French have engineered a meeting with them over Easter weekend to force their solution through. If we are to stay in the race, we must be there too so that there is a proper comparison made.”
The comparison was to be based on a series of matrices where all the key operational, technical and commercial features and benefits, including prices, spares, support etc, were all graded and the best overall total score would win. We knew that the French would do all they could to counter our system benefits and have us marked down. It was also clear that the French had done this as they knew that no one from the UK would be in Cairo over Easter and so they would have a clear run.
After I had spoken to Adel, I rang our new marketing director, as I knew that my immediate boss was away on his Easter holiday. Gwynne had joined Marconi from Plessey some months before and I had first met Gwynne when he interviewed me for my first job with Plessey. He was ex-British Army officer and understood the need to get things done. He was struggling with the Marconi culture as much as we were.
“Gwynne, I need your approval to go to Cairo tomorrow to support Adel for final discussions with the US builders of the minehunters. The French are already there and if we are not, then the French will get us ruled out of the race.”
“That’s fine,” said a very laid-back Gwynne. “Go ahead and book the flights on your Amex card and I will sign it all off when you get back.”
So Good Friday found me on the BA flight to Cairo. Adel had booked me into the Nile Hilton in Cairo and we sat down in my room while he briefed me on the state of play. We went through the outline of the matrix and discussed all the points. We felt we had good answers to most of the points that would be discussed.
The discussions went on over the weekend and into the next week. One day, the French would be in negotiating with the builder, then we would be there the next day. It was a case of claim and counter claim. The real problem was that the shipbuilder did not understand minehunting, so every feature and benefit had to be explained and we were never sure that he fully understood the points we made. Also, it became clear that he was only interested in paying the lowest price he could and did not really care what performance the end user got from the system. All he had to do was make sure that the matrix met the Egyptian Navy requirements and would pass the US DOD rulings.
By the end of the week, however, we felt we were making progress and had a clear technical lead, but by the Friday night the French seemed to be back in the lead with an improved price offer. We spent the days in our hotel room going over the matrix, examining the price, telexing the UK for more words to emphasise some technical point, talking to the UK Naval Attaché to see what support the Royal Navy could offer and feeding that into the discussions, or seeking changes to the commercial conditions to make them more acceptable and increase their matrix rating or lower the overall price.
Finally, mid-way through the second week, the shipyard called both competitors in and declared the winner. It was the French. Sensing that they were losing technically, they had suddenly submitted a really low price to seal the deal. Adel and I were ‘gutted’. We had got so near. Why did we not win? So many questions came into our minds, but in the end, after a day’s deliberations on it all, we had to accept the fact that we lost and get on with life. Unless there was a clear case of malpractice, then any further action was merely time and money wasted. The Egyptian Navy were not directly involved now and we knew we could not get near the French price. In the aftermath, we learnt that the French had crashed their price to a level that they knew, correctly, we could not meet and this gave them an unassailable points lead. The only consolation was it must have been a loss-making price for them.
I flew back to the UK and went into the office feeling pretty much wasted. I was unpacking my briefcase and having the first coffee of the day, when in walked one of the senior marketing executives. His title and actual job role in the new structure were still very vague and none of us really knew what he did.
“Ah, Gordon, I hear you just lost out in Egypt. Now, did you make full use of the naval attaché and our contacts in the Royal Navy? Couldn’t they have sorted it for you? They could have helped a lot, you know.”
I just about exploded. “Did I do what? We have been pushing this project for months and the RN and DESO know all about it. While you lot have been enjoying Easter eggs, I have just spent two weeks stuck in a Cairo hotel room only to lose out to the French on a crashed price and you come in asking about our contacts in the RN. Unless the RN were going to subsidise our bid w
ith hard cash, then there was nothing they, or anyone else, could do to stop a French price crash or to change the mind of the American shipyard. And, by the way, what job do you do here?”
The gentleman retreated to his office quietly before I could amplify my emotions. I apologised in the pub at lunchtime for the outburst and he also said he saw his error and apologised for his insensitivity; so all was well, and John and I became firm friends.
Time Changes
Sometime later, Bill Hawley and I were on our way to visit the Egyptian Navy in Alexandria. This time it was to talk to the navy about submarine sonars. On our way to Egypt, we needed to attend a meeting in Athens, so flew there first and spent a night there. The following evening, we caught an Olympic Airways flight from Athens to Cairo. The announcements on the Olympic flight were all in Greek, so they meant nothing to us.
Bill said to me, “Is there any time change between Athens and Cairo?”
“I am not sure, Bill, but I would not have thought so, would you? They are on a similar longitude.”
“Yes, I guess so,” said Bill.
When we landed at Cairo, it was quite late and we got a taxi to the Sheraton Hotel at Heliopolis, not far from the airport, so we could catch the first flight in the morning up to Alexandria. It was quite late so we agreed to meet in the lobby the next morning at 0430 to check out and get a taxi back to the airport for the 0700 flight to Alexandria.