Smiths Aerospace is positioning itself as a key Tier 1 supplier on platforms as diverse as Boeing's 7E7 Dreamliner and the Lockheed Martin F-35. Group managing director John Ferrie outlines the priorities for the business to Paul Derby and explains where the opportunities for expansion lie.
Q: Boeing's decision last month to select Smiths Aerospace to supply landing gear actuation and high lift systems on the 7E7 was another important milestone for your business. How vital is 7E7 as a programme to Smiths and what is your approach to it?
A: Smiths selection as a Tier 1 systems integrator on the 7E7 reflects our long-term commitment to investment and research and is a testament to our skill at integrating electrical, mechanical and digital technologies to deliver the best value systems for our customers.
Increasingly, our customers are looking for ways that we can help them reduce costs by building more efficient aircraft. Smiths' extensive systems and technology expertise puts us in the perfect position to provide value - not only with Boeing on its 7E7, but with Airbus on the A380, with the military on the 767 Tanker, and on a host of other commercial and military aircraft. Smiths' unique breadth of capability provides many opportunities to provide powerful retrofit and upgrade solutions to in service aircraft.
Q: You have secured contracts on the F-35 Joint Strike Fighter programme. How is that development work shaping up?
A: Smiths has been selected for an extensive range of avionics systems from nose to tail on the aircraft, illustrating our technical leadership and commitment to provide systems value for our F-35 customers.
Our system deliveries are on schedule to the F-35 integration facilities at Lockheed Martin, Rolls-Royce and Pratt & Whitney. For example, we have already delivered more than 100 remote input/output data concentrator units to Lockheed Martin, and seven complete Short Take-Off/Vertical Landing (STOVL) LiftFan and six complete 3Bearing Swivel Module actuation systems to Rolls-Royce.
Our production content is now valued up to $1.1 million depending on aircraft variant, a key indicator that the F-35 is a significant growth programme for Smiths. We are looking forward to being a major part of one of the most exciting milestones in aviation history - the first F-35 flight - and continuing to be a significant contributor to the ongoing success of the programme as it transitions from development to production.
Q: You have spoken previously of positioning Smiths Aerospace as a supplier and integrator of systems rather than as a provider of components. What are the keys to delivering on that goal?
A: Our expertise in systems integration, and our ability to offer solutions incorporating digital, electrical and mechanical technologies, makes us uniquely able to create affordable, innovative solutions for nearly every system on an aircraft. Our increased R&D spending, which is now 8% of annual sales revenues, will be directed to continuing to develop our technologies in this space.
Q: Achieving the market position and the performance that shareholders require will be a significant challenge. How big a part in that challenge will acquisitions play?
A: We will continue to pursue strategic acquisitions and alliances which complement and expand our technology base and increase the development of innovative solutions for our customers. We've had great success with this in the past, having successfully integrated 12 businesses in the past five years, all of which are playing a significant role in the number of high-profile wins we've enjoyed this year.
Q: What have you accomplished to date on the 767 Tanker Transport programme?
A: Smiths was selected to provide the hose and drogue refuelling system and mission control system for the Boeing 767 Tanker, programmes valued at a combined total of more than $1 billion. While the US military programme is temporarily delayed, we're continuing to provide our leading-edge technologies on 767 Tankers to be delivered to Italy and Japan in 2005. In addition, we're incorporating our patented refuelling technologies on UAV aircraft in development for the US military.
Q: What is the single biggest challenge facing Smiths Aerospace in the next 12 months?
A: Our ability to bring the most innovative technologies to our customers is of utmost importance to Smiths. Our programmes are aligned and managed in such a way to keep new ideas and advanced technologies at the forefront of our integrated systems.
Q: When you look at the way the aerospace world is changing and the part that Smiths is playing, is there a geographical area where you feel under-represented and where do you see particular growth opportunities?
A: We are currently generating more than 60% of our sales in the US, largely based on a significant increase in US defence spending. We hope to return our military and commercial business to a 50:50 balance (from 60:40 now), in order to better manage the cyclical nature of these markets. In particular, we intend to grow our share of the European markets, for example, with Airbus.
Our recent wins on the 7E7 and A380 bring us in line with this goal. In addition, we're active in geographies with developing aerospace needs such as China, Japan, India and South Korea.
Source: Flight Daily News
