It may be going too far to say the industrious north is debt-ridden Italy's last hope against full-blown recession, but export-driven sectors such as aerospace are playing a huge part in keeping the wolf from the door. The Lombardy region around Milan is one of the engines of the economy. There, aerospace companies, alongside counterparts in the likes of automotive and textiles, dispatch products stamped Made In Italy around the world.
As well as Finmeccanica heavyweights AgustaWestland, Alenia Aermacchi and Selex Galileo, the Milan area is home to dozens of long-established small- and medium-sized enterprises (SME), not only manufacturing and assembling, but often developing and marketing technology. Many companies are second- or third-generation family-owned and fiercely independent, riding market fluctuations by adapting, investing and staying lean. According to local cluster organisation, the Distretto Aerospaziale Lombardo (DAL), Lombardy's aerospace industry generates €4 billion ($5.32 billion) revenue, almost 40% of the country's total, and has 185 companies with 25,000 employees.
Despite the area's heritage as the birthplace of Italian aviation, DAL is one of the newest regional clusters in Europe. Formed in 2009 with only eight companies but now with 75 members, it gives SMEs a channel to engage and learn from prime contractor customers, collaborate on projects, often with the involvement of local universities, and promote themselves on the international stage. DAL made its air show debut at last year's ILA air show in Berlin and was at Paris this June. "It allowed many of our members to attend an air show for the first time," says DAL president Giorgio Brazzelli, an industry veteran who has run a number of Italy's largest aerospace companies and now chairs AgustaWestland
Brazzelli says that unlike some of Italy's other aerospace clusters, DAL receives no financial support from its regional government. "We see our role as tutors," he says of the mostly Finmeccanica-owned prime contractors who support the district. DAL's job, he says, is not so much to appeal for public funding but to spread the word on practices such as lean manufacturing and encourage members to develop new skills and expertise.
"We want to strengthen companies to be able to access new markets," he says. "We also want to improve their efficiency. We have a situation now where an engineer from a small company can sit with engineers from bigger companies. That helps to spread best practice down the supply chain."
DAL has also set up a masters course to allow general engineering graduates to continue studies in disciplines suited to local industry needs. "It means we have young people entering our companies with the specific knowledge our members require," says Brazzelli. DAL also runs a course for teachers at high schools to help them introduce an understanding of aerospace at a younger age.
Lombardy's SMEs come in various shapes but most of them have a long history and have been successful finding customers beyond Italy's traditional original equipment manufacturers (OEM). Milan-based ASE was established in 1946 as part of automotive electrics specialist Magneti Marelli. It supplies electrical power generation and distribution systems to the aerospace and defence sectors. Dispensed with by the Fiat group a decade ago, its independent owners have begun a process of investment, says chief executive Paolo Fantini.
ASE's main aerospace customers are AgustaWestland and Alenia Aermacchi, but its equipment is also on the Airbus A380 - through Goodrich - and Airbus Military A400M, as well as the Dassault-led Neuron unmanned combat air vehicle project, for which it has designed the integrated power distribution system. Fantini describes ASE as a systems integrator, rather than a manufacturer, as it combines electronic, electromechanical and composite technologies.
"Only a few companies around the world can offer this level of integration," he says. With 100 employees and sales of €15 million, a quarter from the aftermarket, Fantini says ASE is "big enough to offer a range of capabilities but small enough to be flexible".
ON THE RADAR
Elettronica Aster, based in Barlassina near Milan, specialises in designing, manufacturing and overhauling electronic and electro-hydraulic equipment for radar and actuation systems on military aircraft. Also privately owned, its kit is on the Eurofighter Typhoon as well as the Hindustan Aeronautics (HAL) Dhruv light helicopter. It mostly supplies its products through tier-one suppliers, including Goodrich, Cobham, GE Aviation and Selex Galileo, for whom it builds the Eurofighter's forward-looking infra-red radar. The connection with India was established via a previous owner and Elettronica has supplied HAL since the 1990s, supplying up to four shipsets a month for the Dhruv. It is bidding to be part of the HAL light utility helicopter programme. Elettronica is setting up a sales office in Bengaluru and, if successful on the HAL, will open a production plant. "It is a country for us where many things are happening," says Marco di Cicco, head of commercial department.
Milan's Gemelli was a huge name in aviation communications in the decades after the war and, after a shave with bankruptcy a decade ago, is re-establishing itself. Gemelli built its reputation for VHF radios for aeronautical, military and marine applications but ended up over-exposed to Agusta. When that company's sales foundered in the 1990s, Gemelli's orders collapsed. By 2000 it was down to four employees and a turnover of €150,000, recalls president Giorgio Fassina. Now up to 40 employees and revenues of €3.5 million, Gemelli has fought back by "continual investment in development". AgustaWestland remains a major customer, and Gemelli supplies the internal cockpit communications system for the AW149 and AW169 among others.
The Italian military has also retrofitted combat helicopters with its kit during the past decade. Among its technologies is a system which processes and cuts ambient noise in headsets by distinguishing it from crew voices, a huge advantage on a helicopter, says Fassina.
Founded in 1927, AEREA is one of the region's oldest aerospace defence suppliers. Specialising in airborne carriage and release systems - the "link between the aircraft and the weapon", says commercial director Francesco Nicotra - AEREA has had considerable success developing related products around its core lines of missile launchers and bomb racks. Its products are on aircraft including the Lockheed Martin F-35, Eurofighter Typhoon and NH Industries NH90 as well as several AgustaWestland helicopters. The privately owned company, which has 125 employees and turns over €30 million, will move into a 30,000m2 factory in 2013. The F-35 and MRO activity on existing programmes remain its most promising future revenue streams.