Thursday, July 24, 2008

On Video, Prince Explains Business Future

CEO Erik Prince talks to the Associated Press in this video shot recently at Blackwater Worldwide headquarters in North Carolina.

He 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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