FARNBOROUGH, England — The head of Leonardo-Finmeccanica gave a guarded response Monday to the UK's decision to award new Apache work to Boeing, stating that he will continue to invest in his firm's facility in Yeovil, England, as long as the UK government does the same.
Speaking at the Farnborough Air Show, Mauro Moretti also announced a new corporate presence in the UK to better interface with the UK government, which will be run by Norman Bone, and confirmed that the Italian firm had been down selected to supply IFF systems (identification, friend or foe) to the UK.
The CEO's news conference at the show started hours after the UK government announced it had selected Boeing to provide new build AH‑64E helicopters to the British Army instead of picking Leonardo-Finmeccanica to produce the helicopters at its Yeovil plant, formerly a site under AgustaWestland.
That leaves Yeovil with the potential consolation prize of support work on the new Boeing helicopters. The Ministry of Defence (MoD) said in a statement: "The proposed arrangements for these services will be finalised over the next year, with contracts being placed toward the end of the decade."
Defence Secretary Michael Fallon said: "In the longer term, I want these new Apaches to be maintained in the UK and for UK companies to do most of the work. This includes Leonardo helicopters."
Asked about Yeovil's fate after the Apache decision, Moretti said: "We are discussing with the MoD what is the role for Yeovil," adding: "We have to balance orders and results. When we have an opportunity to better to understand the whole Apache decision, we can define the right consideration."
Speaking to reporters after the conference, he added: "Will the MoD want to maintain an important facility like Yeovil? At the moment, Yeovil produces platforms born in Italy for the global market, but we need a mix with the domestic market. In the US, without the support of the US administration, Bell, Sikorsky and Boeing would fail. We don't ask the same, just some consideration."
"We would like to continue to build the AW101 in the UK and possibly the new AW189, it depends on the intention of the UK government to support the work, otherwise there are a lot of countries interested in our facilities. Yeovil is a legacy for us, but also for the UK and there is a common interest to maintain this," Moretti said.
The MoD signed a strategic partnering agreement with the firm Monday, with the defense procurement minister, Philip Dunne, saying that Leonardo-Finmeccanica would "continue to support Merlin and Wildcat, two of our five main helicopter fleets, to 2030 and beyond, as well as our current Apache helicopters for the next eight years."
The deal has no value but should be worth about £3 billion (US $3.88 billion) over the next decade.
During his conference, Moretti also announced a shakeup of Leonardo-Finmeccanica's corporate structure in the UK, with the addition of a new legal entity — likely to be called Leonardo MW — to interface between the firm's divisions in the UK and the UK government.
"We have a lot of facilities in the UK," Moretti said. "And we have to give the UK government the real image of our footprint."
The "MW" would stand for Marconi and Westland — two historic brands now absorbed into the group.
With the firm's top UK executive, Brian Burridge, leaving, Bone will become the head of the new corporate front office while keeping his existing role as head of the firm's Airborne & Space Systems Division.
Under its previous guise as Finmeccanica, the firm did have a corporate office in London, but Bone said the new entity was not a return to the past.
"Back then I did not report to the London office, but now, the head of our helicopter operation in the UK, for example, will report to me," he said.
Asked about any negative fallout for Leonardo-Finmeccanica from the Brexit vote in the UK, Moretti said it could turn out to be a positive factor for the firm.
"With a stress on domestic innovation (in the UK) this could be an opportunity for us," he said.
Rumors have been circulating in Italy that Moretti would be discussing the sale of Leonardo-Finmeccanica's stake in MBDA at the show with fellow shareholders BAE and Airbus. Asked for news, he replied: "No news." But he did say he would be holding onto the firm's stake in its Superjet joint venture with Sukhoi.
Asked about the crash of a prototype of the firm's AW609 tiltrotor, strategy chief Giuseppe Giovanni said flight testing would resume within two months.
Tom Kington is the Italy correspondent for Defense News.
