AlliedSignal has completed its acquisition of a controlling interest in UK-based Normalair-Garrett from GKN. Tig Krekel, president and chief executive officer of AlliedSignal's Aerospace Equipment Systems (AES), explains to Karen Walker why he welcomes this even closer relationship with a UK company that has been associated with AlliedSignal for more than 30 years.

Q What is the exact relationship between AlliedSignal and Normalair-Garrett now?

A AlliedSignal now holds a 52% interest in NGL and has the option to acquire the remaining 48% on or after 31 December, 1999. We have held a 48% stake in NGL since 1967.

Q What does NGL bring to the AlliedSignal table?

A It gives us a seat in Europe from an environmental controls perspective. AES is looked upon as an American entity, but through NGL we have a full market presence in the region. It also means we have after market support in Europe, which is important. When we look at and analyse our markets and those that we are not covering, it is because we don't have a regional presence there.

Q Why are you doing this now?

A We have been interested for some time in an extended agreement with GKN, which is a well respected name in the marketplace. Doing it now allows us to consolidate the financial results in the US.

Q What does it mean to the employees at NGL?

A It's very much business as usual. This agreement allows us to maintain the flow in what will be a smooth and ordered transition. The response at NGL to this was tremendous - they are very positive about it. Work will be transferred to Europe - we are very open to that.

Q How is business doing at AES?

A We did $2.4 billion in 1997 and we will hit $3 billion in 1998. That's rapid growth for us. It has been a very dynamic year, which brings its own set of challenges. But it's also very rewarding. I agree with Boeing that 2001 will see a softening in the market, but we will be able to make an adjustment for that and are already working towards it.

Q What are your key challenges?

A We have to work on our cost structure. We have already started taking action. That is the downside of growth - you tend to take up inefficiencies. We have a cultural issue to address after five years of good, strong growth. We will be looking for internal growth opportunities while simultaneously managing costs aggressively. It keeps you awake at night, but in a positive way.

Q What is your message at Farnborough?

A We are a total integrator and systems provider. We cover everything in the aircraft from the nose to the tail - it makes us an unparalleled systems integrator.

Over the last year we have won every environmental control systems competition of any substance because of that capability. We expect to make another contract announcement during the show.

Source: Flight Daily News