FLUG REVUE August 2005: Interview with Finmeccanica CEO Guarguaglini

August 2005

VIP Interview

PIER FRANCESCO GUARGUAGLINI

Pier Francesco Guarguaglini is Chairman and Chief Executive Officer of Finmeccanica SpA and President of the AeroSpace and Defence Industries Association of Europe (ASD).

FLUG REVUE: Finmeccanica is a company which is very dependent on technology. How much does it spend on research and development?

Pier Francesco Guarguaglini: We spend roughly 16 per cent of our turnover on research and development or 1.6 billion Euro.

FR: That is more than the average European aerospace company spends on R & D.

Guarguaglini: Yes. Last year, in the UK the Department of Trade produced a list of companies ranked by the amount they spent on R & D. We came second!

FR: Does the European research framework offer enough support for the aerospace industry and Finmeccanica to develop technologies which help the industry to remain competitive?

Guarguaglini: No, it doesn't. We receive some money from the European commission and some from the Italian government, but most of our funding comes from inside our own company. They need to fund more, but they can't.

FR: Is there any scope for using technologies which have been developed for military applications for civil purposes and vice versa?

Guarguaglini: Yes. Inside Finmeccanica we have many divisions. We have the radar groups, the space groups, we have the aircraft groups. All these groups bring put together their technology and exchange information so as to optimise the scope for synergies. In space, for example, we have Telespazio and Alenia Spazio, so we try to have synergies or to establish them between all the groups headed by Finmeccanica.

FR: Finmeccanica has a very broad product portfolio, from the MEADS missile systems, regional aircraft, helicopters and the Eurofighter to electronics and Space activities. Is there any product which you don't have in your portfolio which you would like to add?

Guarguaglini: No because apart from the naval activities, we have everything inside Finmeccanica. Our interest is not to enlarge our portfolio but to concentrate. The fact is, we spent money in our helicopter business in order to buy 50 per cent of AgustaWestland. We want to achieve a greater presence in our fields than we have today. But that requires that we have to accept a minority role, it is not a matter. As you know, we have only a 25 percent share in MBDA. And in our space activities, for example, we partnered with Alcatel. They are the leader in the company that will manufacturing satellites, we are the leader on the satellite services side.

FR: How important is international cooperation to Finmeccanica?

Guarguaglini: International cooperation is very important to us. We need to cooperate to reduce the investment and to develop good products which are globally competitive. At the same time, if you want to open new markets, you have to go there. You can't establish a good relationship with a country without working with a local company. For us, international cooperation is one of the pillars of our company. One example of good international cooperation is our aerostructures business. We build structures for all the major manufacturers.

FR: You and your U.S. partner have won the competition for the next US presidential helicopter. Do you see that as an door-opener for further contracts with the US government?

Guarguaglini: We are confident. We have good products, for example for the Personnel Recovery Vehicle (US101 helicopter) for the U.S. Air Force. We see good opportunities for our C-27J with the U.S. Army.

FR: Finmeccanica is also a partner in the ATR programme. Do you see a new product on the horizon? The turboprop market seems to be shrinking whereas the jet market still shows signs of growth. What is your strategy with ATR?

Guarguaglini: This year, we have received a lot of orders for ATR and we think it will prove a boom year for ATR. We already have around 50 orders. We know, that EADS is not interested in the long run in ATR and we are looking at every possibility around the world. We are ready for all kinds of cooperation and we are looking ahead to what the customers want.

FR: Do you expect further consolidation in the European aerospace industry?

Guarguaglini: The trend towards consolidation is not over yet. There will be further consolidation in the defence and electronics industry. Just look at France at Thales and others. I think that other European companies will participate in the consolidation process. Finmeccanica is ready to pursue whatever opportunities might emerge.

FROM FLUG REVUE 8/2005

Last updated 15 July 2005

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