STEWART PENNEY / LONDON
UK chief executive Alex Dorrian says the French manufacturer is happy competing as a British company
In January, Thales UK achieved something many sceptics believed impossible: it won a chunk of the UK's CVF future aircraft carrier programme. A few days later it secured another significant success, being one of the two finalists in the UK's Watchkeeper intelligence, surveillance, target acquisition and reconnaissance (ISTAR) competition.
These two successes go some way to justifying Thales's strategy of acquiring a number of UK-based defence and aerospace businesses and creating the country's number two defence company able to compete head-to-head with BAE Systems. Thales is now forming an alliance with BAE to build the two CVFs, which will be to the Thales design, and the UK giant is one of the companies Thales beat to the Watchkeeper downselect. Last week, Thales again beat BAEinto second place when it was picked for the Future Integrated Soldier Technology (FIST) programme assessment phase.
Although Thales is often considered as the reinvention of Racal following the latter's takeover by the then Thomson-CSF, Thales's UK business also incorporates companies - such as simulator specialist Thales Training & Simulation - already owned by Thomson at the time of the Racal takeover in 2000.
Others such as Shorts Missile Systems and Thomson-Marconi Sonar were joint ventures brought fully in-house, with the French group buying out co-owners Bombardier and BAE, respectively. Others such as optronics specialist Avimo and its reconnaissance system subsidiary W Vinten were acquisitions. The UK element is around 25% of Thales: it employs 12,000 of the 65,000 personnel and each of the French-based company's three sectors - Aerospace, Defence, and Information Technology and Services - is represented. Thales UK chief executive Alex Dorrian says the CVF result "hasn't changed anything we would like or want to do". CVF, he adds, is part of Thales's UK strategy and, along with Watchkeeper, is one of the six key programmes the company is targeting. Others are FIST; the Future Strategic Tanker Aircraft, as part of the AirTanker consortium; Ground Based Air Defence; and Soothsayer, anelectronic warfare (EW) system for the British Army. Each draws on elements from across the entire Thales group and each is a significant deal, either immediately on contract award or in the longer term through the programmes' lives, says Dorrian.
As well as providing significant work, another "benefit" of CVF is "that people beyond core customers now recognise Thales as more than a sum of its parts", says Dorrian.
Thales is in talks with BAE and the Ministry of Defence to createthe "alliance" that will manage the two-ship, £2.8 billion ($4.5 billion) CVF development and construction programme (Flight International, 4-10 February).
Dorrian says the three sides are "in the final stages of putting together the method of operating".
Thales UK can also compete happily as a UK company, says Dorrian. The UK government's industrial strategy means the MoD views a company as British if it places jobs and work and creates intellectual property (IPR) in the UK, he says, adding: "We've been doing that in the UK anyway."
One fallout from the CVF battle is a recognition in key places that Thales, bidding as prime contractor against BAE, offers the prospect of a UK jobs versus UK jobs competition, which in turn means the Soothsayer programme, against Lockheed Martin, could be seen as a UK jobs and technology against US jobs and technology competition, says Dorrian.
Thales is also the incumbent EW supplier to the British Army, he notes. This "doesn't make it easier to win competitions, but because we're more obviously a British player, the environment is different, it is less difficult to get our message over".
As well as jobs, security can be an issue in government contracts. Dorrian says Thales Defence's structure is split into five business groups sharing a global matrix with national companies in Australia, France, the Netherlands, South Africa, South Korea and the USA as well as the UK. Each national unit is responsible for all aspects of contact with local government, including IPR and security, but can access technologies and best practices from across the company.
There is no point in developing two radars for two different countries, says Dorrian, but it is possible to create two systems using common building blocks, which allows the sharing of development investment. "Take sonar, for instance. We have three companies in the naval business group, one in the UK - Thales Underwater Systems - one in Australia and one in France. Sonar is a very sensitive area, particularly in France and the UK [because of their submarine-based nuclear deterrence programmes], but we have been working together for years and have the complete confidence of the two MoDs and Australian Department of Defence that we can manage security," says Dorrian.
Some of the big six UK programmes are fundamental for some of Thales's facilities, which has "implications", acknowledges Dorrian. During the CVF contest, says Dorrian, Thales focused on the customer's needs. He adds: "I would expect to win our fair share of the work [Thales will] focus on what the customer wants and providing value for money."
Source: Flight International
