“You don’t get to be a 105-year-old company without reinventing yourself many times over,” admits Steve Fitz-Gerald, chief executive of Marshall Aerospace and Defence Group. As part of its latest transformation, the Cambridge-based company has been tackling costs and performance issues, and loosening its reliance on defence by developing and purchasing new businesses in the civil sector. Fitz-Gerald describes it as a “massive journey that is accelerating” for the venerable firm.
It is a process recognised by one of Marshall’s oldest customers. In April, Boeing named the company a supplier of the year for its auxiliary fuel tanks on the P-8 maritime patrol aircraft in service with the US and Indian navies. “We were one of 15 out of 23,000 Boeing suppliers and the only UK company,” enthuses Fitz-Gerald, recruited three years ago from Cobham to lead a transformation strategy at the aerospace and defence business. “Boeing said we had made the greatest journey. When I joined, we were the worst supplier on the P-8.”
Marshall is one of the most unusual companies in the UK aerospace sector. Founded as a chauffeur service in 1909 and still owned by the original family, it runs motor dealerships and has a large property portfolio, including Cambridge airport, where its aerospace business is based. Aerospace and defence make up about £320 million ($534 million) of the group’s £1.29 billion revenues – its activities ranging from military aircraft modifications and support to chartering business jets.
Although Marshall has been repairing military aircraft since the Second World War and has relationships with Boeing and Lockheed Martin stretching back decades, Fitz-Gerald says one of the biggest challenges he confronted at Marshall was an obsession with the company’s previous successes. “When I joined, all everyone wanted to talk about was what we did in the past. But I said I can’t affect the past – only the future,” he recalls.
In 2010, Marshall’s aerospace and defence business was badly in need of a rethink. The post-9/11 slump in air travel and rising demand for military capabilities with the Afghanistan and Iraq campaigns had led to the company to reorientate its aerospace activities from a 50/50 civil/defence split in the late 1990s – when it carried out projects such as upgrading British Airways’ Boeing 747 business class cabins – to 80/20 in favour of defence a decade later.
Marshall Aerospace and Defence
But by the turn of the decade, this was not such a great place to be because of cuts in military spending prompted by budgetary pressures and the winding down of the Afghan and Iraq campaigns. “Then came SDR [the UK government’s Strategic Defence Review of 2010] which said our two primary platforms would go out of service,” says Fitz-Gerald. Sustaining the UK Royal Air Force’s Lockheed L-1011 TriStar and Lockheed Martin C-130K fleets represented 40% of Marshall’s military support business.
“The first thing we needed was a strategy. We knew that we needed to broaden our portfolio, recognising where our key strengths lay and what we could develop,” he says. It meant a spate of redundancies as Fitz-Gerald addressed the cost base, something he said was driven by customers such as Boeing “wanting more for less” as well as defence cuts. An internal project known as Fit for Growth was instigated to “address how for less cost we can give the customer more available aircraft”.
But as well as streamlining the legacy military maintenance, repair and overhaul business, Fitz-Gerald has also been given “substantial” funds by the board for a “programme of targeted acquisition”. Much of the activity so far has been in business aviation, a sector Marshall had little more than dabbled in, with a modest charter and maintenance operation focused on Cessnas. But two acquisitions in 2013 – FlairJet, an Embraer Phenom 100 charter operator, and the former Hawker Beechcraft maintenance, repair and overhaul facility at Broughton – have boosted Marshall’s business aviation turnover from £15 million to £50 million.
A new unit – Marshall Aviation Services – now runs all the company’s business aviation activities, from brokerage and chartering to MRO. The company is even moving back into VIP conversions, an activity Fitz-Gerald says aligns with the military modifications business. He sees a big market for special mission adaptations of business aircraft, including the Beechcraft King Air 350ER, a platform that Marshall now has expertise in with the acquisition of Broughton.
Two other niche businesses pre-date Fitz-Gerald. Former glider manufacturer Slingsby Advanced Composites, based in North Yorkshire, was purchased in 2010 for its capabilities in advanced composites. The business designs and builds components for Marshall as well as third parties. A decade earlier, Marshall launched its own engineering manpower agency, Aeropeople. Today, the business has several hundred licensed engineers working with companies around the world, including Formula 1 team Ferrari.
Military MRO remains vital to Marshall and accounts for 60% of its revenues. However, this is down from 80% a few years ago and by 2020 it will be just 40%, says Fitz-Gerald. He is not entirely comfortable describing Marshall as an MRO business. “We are in support solutions. Yes, we do MRO, but we want to be in value-added services where we can provide whole-life solutions for customers, not commoditised markets like commercial MRO.”
The company retains an international reputation in its field, he says. “People all over the word recognise us for what we do.” It won a recent seven-year contract to support Norwegian and Danish C-130Js in competition with Lockheed Martin. Another eight air forces operating versions of the Hercules transport are among its customers. “We are one of three fully-approved centres for the C-130J worldwide, and one of them is Lockheed Martin itself,” says Fitz-Gerald.
Fitz-Gerald was one of two “industry-recognised” chief executives brought in to run Marshall’s two main divisions (the family run the third arm, property). He notes that his title, and that of his counterpart on the car retailing side, is chief executive, rather than divisional managing director: “The difference is that we run strategy.” He saw the job as a huge challenge. “I wanted to make a difference, to leave a legacy in the industry,” he says. “I might only be here 10 years if I’m lucky, but I wanted to say I’ve positioned the business for the next 100 years, by putting in foundations that will endure over time.”
Marshall, he notes, is often described as a “mini prime” or an “OEM without a product”, such is the range of its competencies. “It’s why we are asked to get so involved in UK defence strategy,” he says. “We can design, install and certificate a modification for an aircraft. We can do a full end-to-end piece.” He has a message for those who think the company’s best days are behind it. “People think the TriStars and C-130Ks going [from RAF service] means we are going to the wall. Well, we’re not. We’ve had two of the best years in the company’s history.”
Source: Flight International
