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  • FARNBOROUGH: Interview with Finmeccanica CEO Giuseppe Orsi

FARNBOROUGH: Interview with Finmeccanica CEO Giuseppe Orsi

Finmeccanica is in the midst of a major reorganisation and relaunch plan aimed at transforming the group into a more focused and competitive company. Finmeccanica's chairman and chief executive Giuseppe Orsi emphasises the company's evolution from being an Italian group with an international dimension, to becoming an international group. Orsi believes Finmeccanica must become a world leader in high technology, rooted in the defence sector, but able to find new areas of growth in the civilian sector.

Finmeccanica is repositioning itself in the world market. What are the main steps of this process?

For our group this is definitely a challenging time. We are in the midst of an important reorganisation and relaunch plan aimed at transforming Finmeccanica. The extent of international competition imposes an increasingly selective idea of what core business really means. I believe that focusing skills, investments, and research in those areas in which today we are already more competitive, gives us a greater chance of expanding the strong position achieved by the group at an international level. It is clear to us what Finmeccanica must become: a world leader in high technology, rooted in the defence sector, but able to find new areas of growth in the civilian sector - where we already have a significant presence through the development of advanced technologies. By fully exploiting every potential application of our technological heritage - be it civilian, dual or military - we want to redefine Finmeccanica as the stronghold of Italian, British and European industry on the most advanced frontiers of knowledge and applied technology.

What is Finmeccanica doing to expand its position in a world-wide market characterised by reduced defence budgets and a higher level of competitiveness? Which are the regional markets where the group is strengthening its presence?

To achieve success in a context characterised by a much fiercer competition we need to improve our approach and our perception of marketing, sales and after sales support and customer satisfaction. The relationship with the customer is evolving and we must adapt to new and higher standards. The development of technologies and products is always driven by market needs, but understanding what the market wants and providing it with a good solution is not enough. The product must also be truly excellent, offered at the right time and at a competitive price. We are evolving from being an Italian group with an international dimension, to becoming an international group. We are competing on large international programmes in terms of size and economic value, but given the current economic and financial situation, we will increasingly focus on other programmes, also of a smaller scale. As for the reference markets, the UK remains one of our key markets, along with the US, Italy and Poland which we consider, with the UK, our "domestic" markets. Our activities in the UK for both the MoD customer and for exports are one of the cornerstones of the future strategy of the group. Proof of this is the growing integration we are developing between Italy and the UK. Among the strategic areas the group is looking at with particular interest are the Gulf Countries, Brazil and South America, India, Turkey, Russia, China, Australia and Canada.

How is Finmeccanica applying this vision and implementing the indicated strategy to the aviation sector? Can you elaborate on the future international cooperation in the fixed-wing sector? What is the focus in the military sector, including UAVs?

In the aeronautics field a significant portion of revenues from Alenia Aermacchi today already depends on civilian programmes, in all market segments, from regional aircraft to large airliners like the Boeing 787. In the company's business plan, future investments in the civilian sector represent almost two thirds of total investment. Today already over 70% of the direct jobs in Alenia Aermacchi concern civilian programmes. The role in ATR and Sukhoi Civil Aircraft Company, and the possible launch of a new ATR will increase this trend. As for the international collaborations in the fixed wing sector, we are evaluating the opportunity of intensifying the relations with Airbus in future programmes. All this happens, of course, alongside the ongoing strong commitment in the military sector, for example with the M-346, the C-27J, the unmanned combat air vehicle, and the Lockheed Martin F-35 JSF programme. With reference to the UAV business, Finmeccanica, through the initiatives involving Alenia Aermacchi and Selex Galileo, aims to consolidate its position - on the basis of the skills developed in the large tactical and mission systems segment and in the aircraft/platform (MALE and UCAV) component - getting a reference role within the cooperation programmes at the European level.

In the rotary-wing market, a concept of a family of products has recently been launched alongside the tilt-rotor development. Where are you heading in this sector?

AgustaWestland is growing substantially in the civilian field and in services, while maintaining its traditional positions of strength in the military area. The aircraft that are currently being developed will be increasingly "dual" purpose. We have introduced the concept of families of helicopters, available in commercial and military versions, which represent AgustaWestland's answer to growing world demand. Three different models - the AW169, AW139 and AW189 - although in different size and weight classes, share a common design and operational philosophy, multiple components and systems, and the approach to maintenance and training, all in full compliance with the latest certification requirements. Moreover, we have purchased all rights of the AW609 tilt rotor, now being industrialised for production, while defining the concepts of a second generation of tilt rotor for commercial transport. All this, of course, alongside the military-dedicated helicopters in production today, the AW129, NH90, AW101, and AW159 Lynx.

Finmeccanica is expecting a significant evolution in the defence and security sector. What is the roadmap for unified Selex? Where are you heading in terms of business areas and products?

A very significant evolution awaits, indeed, the sector of defence and security electronics. There is a growing demand for sophisticated systems to support intelligence activities and the still only partially explored universe of cyber security. Many of these areas require the dual technologies into which we are venturing, similar to those we are applying in the systems for air traffic management and the monitoring of maritime traffic, coastal waters and frontiers. We can leverage our expertise to offer the building and management of complex civilian infrastructure, with a view to concepts such as smart grid and smart city. Precisely because of these wide prospects that are opening up, we have to make our electronics sector more efficient and competitive, transforming it into one of the fundamental pillars of Finmeccanica. A unified Selex will therefore have to grow not only vertically but also horizontally. It must increase in efficiency and competitiveness to better exploit the potential arising from a single offer, drawing from the broad portfolio of products and technologies available at Selex Sistemi Integrati, Selex Galileo and Selex Elsag. This will allow us to strengthen our presence in domestic and export markets and optimise investments in the sector, enhancing the synergies.

What are your plans for Finmeccanica's US activities?

The reorganisation of DRS Technologies in the USA, under the leadership of Bill Lynn, is the premise to operating as a single company, with a simplified structure, which will bring significant benefits both in economic terms and in interfacing with customers and key partners in the US market. In addition, a new chapter will begin in the relationship with our European companies in the electronics sector.

What are your strategies in the space sector?

Space is another area in which technologies have dual applications. A flagship programme such as Cosmo-SkyMed allowed us to grow in the field of space technologies, both military and civilian, and related services and applications. Finmeccanica companies are a unique combination of expertise covering the full value chain with a vertical integration of the offer, from the development and realisation of the infrastructures to all the services with excellence in Earth observation, both radar and optical. Space is one of the domains where competition will be the toughest, both in the commercial and the military sector, and Finmeccanica intends to remain the national industrial leader by exploiting the substantial investments that the country has made in this area.

In the defence sector, are you exploring international alliances for both Oto Melara and WASS?

Oto Melara and WASS represent two excellences within our group. They are globally recognised and particularly appreciated by our armed forces, which have always fully supported them. The need to compete in a more international scenario, however, raises a problem of size for both companies. We are therefore exploring possible partnerships to allow them to rival the major global groups on an equal footing in international markets. The reference model we're looking at is MBDA, which represents a good example of European industrial integration, also in terms of a supranational governance.

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