ROME — Leonardo is eyeing “giant” joint ventures in Europe, starting with electronics tie-ups, and is seeking to boost its space alliance with Thales while making “peace” with shipyard Fincantieri, the Italian firm’s CEO has said.
In a wide-ranging speech to an Italian parliamentary defense committee, Roberto Cingolani outlined his strategy for the Italian flagship defense firm, five months after taking over the helm from previous CEO Alessandro Profumo.
The 61-year-old Italian kicked off his speech by stressing how he has worked to increase Leonardo’s capabilities in cybersecurity and high-powered computing, claiming the focus would reinforce, rather than distract, from the firm’s defense work.
“It’s not just bullets, but bytes,” he said, adding that “we will defend our core business” and emphasizing that “traditional defense remains a key pillar.”
However, he explained, “we must broaden our horizons.”
A former chief technology and innovation officer at Leonardo, Cingolani pushed cyber and artificial intelligence programs at the firm before he left in 2021 to become a so-called green transition minister with the Italian government, only to return to Leonardo as CEO in May.
“Everything has to be cyber safe by design,” he told the committee during his Oct. 25 presentation, adding that the firm is on a “forced march” toward digitalization, with “digital twins” now being created for all products.
Cingolani said Leonardo’s competitors are now not only defense companies, but the likes of Google, Microsoft, Amazon and IBM.
“There are companies which didn’t exist. Ten years ago Elon Musk was running PayPal and then ran Tesla. Now we have these kind of competitors,” he said.
Musk’s SpaceX is a defense contractor and satellite communications company.
Cingolani is overseeing the cyber push, while Leonardo’s co-general manager, Lorenzo Mariani, focuses on the firm’s more traditional defense work.
Turning to alliances, Cingolani said Leonardo wants to play a key role in European industry consolidation.
“We are working on some alliances that should create European hubs in fundamental defense sectors. That means creating entities that are not just Italian, just German or just French, and can compete on level terms with U.S. and China colossuses,” he said. “We have due diligence and talks with international banks underway to help us understand what to sell and what to buy, and we are mulling some joint venture on a giant scale.”
Cingolani said a likely area for consolidation is electronics.
“However big we — or the French, or the Germans — are in electronics, none of us are big enough to compete with the American or Chinese, and that is why we are mulling aggregation,” he explained.
Cingolani added he is calling for a halt to tension that surfaced in recent years between Leonardo and fellow Italian state-controlled firm Fincantieri. Leonardo provides radar, electronics and guns for Fincantieri vessels, but the two firms tussled as Fincantieri expanded into wider defense activities under former CEO Giuseppe Bono.
“Peace has broken out,” Cingolani said. He also told the committee that he had agreed with current Fincantieri CEO Pierroberto Folgiero that “we will make things that fly and they will make things that float. It’s not that complicated, with electronics acting as the glue.”
Turning to Leonardo’s space activities, Cingolani quoted reports predicting the space business would be worth $1 trillion by 2030, claiming that “the market is crazy,” with “huge margins” for growth in satellites.
The CEO also said he wants to boost the activities of Leonardo’s space alliance with French firm Thales — a tie-up which had become “a bit sleepy” in recent years.
He added he had found a willing partner in Thales CEO Patrice Caine.
“If we don’t work together to compete with SpaceX, not to mention the Indian and Chinese governments, we risk disappearing,” he said.
Tom Kington is the Italy correspondent for Defense News.
