INTERVIEW with CAE's Martin Gagne at I/ITSEC 2011
19 Jan 12 | By Tim Mahon
The time that senior executives have during gatherings such as I/ITSEC is normally very limited, taking advantage as they do of a large nexus of the industry being temporarily co-located to see existing and potential customers. It is thus with great pleasure that Training and Simulation Forumwas able to corner Martin Gagné, CAE’s Group President, Military Products, Training and Services, to answer a few topical questions on day three of the annual gathering in Orlando, Florida, last month.
Mr. Gagné, what is your impression of the show so far?
Well, it appeared to be a little light to begin with on Monday, but yesterday and today have been very good for us. This is a great place for us to be and it is an important event for the entire community. It really is a global gathering, where windows are opened to the latest technology solutions and where the trend towards greater and greater integration for joint, networked mission training is very obvious this year.
What is the prognosis for the global market, in your view: challenge or opportunity?
It’s both, of course. I/ITSEC provides an opportunity to highlight our global footprint, which is one reason we sponsor the International Pavilion. Some areas of the world are moving more rapidly, while others are in a period of reflection and consolidation. Europe, for example, is quite different from some of our other markets. European customers are asking themselves the question "How can we maintain readiness at a lower cost?” Here, I think, we’re on the right side of the equation because simulation-based training is extremely cost-effective, and most importantly, delivers realistic training environments that help enhance readiness.
The United States is very much a current and existing market for us, where we have strong positions on some great platforms, such as the C-130J and some of our military helicopter solutions, including the MH-60S/R for the US Navy. The issue here is more one of timing and maintaining our close relationship with our customers so we can react to the changing budget environment and scheduling of their requirements.
Elsewhere, there has been lots of activity following the events of the ‘Arab Spring,’ and many customers are undergoing a period of self-examination, re-assessing their training programmes in light of developing circumstances. There are also more sustained levels of activity in India, for example – an important market for us and one in which our ability to address offsets as a result of recent developments will help position us for continued growth.
Australia and Canada have similar issues with regard to budget availability, but there are nevertheless great opportunities for us in both countries. There are tenders expected for outsourcing solutions for major pilot training programs in Australia, and in Canada, we already have a successful umbrella programme in place called the Operational Training Systems Provider to provide comprehensive solutions for the CC-130J and CH-47 fleets, where we are now looking at expanding the envelope to include mission rehearsal capabilities. In the land domain, too, there are new opportunities. Our bid in Canada for the Tactical Armoured Patrol Vehicle (TAPV) programme in which we teamed with Force Protection is already in and we have several other programmes we are working on. As well, Canada has a new naval investment programme, which represents a number of opportunities for us. CAE is already responsible for in-service support as a subcontractor in a number of areas, for example, the CF-18 aircraft and the maritime helicopter fleet, and we already provide systems engineering services as part of the Halifax Class Modernization program. We are now looking to lead in-service support programs in Canada, so we’re simply building on our past experience.
In terms of large scale projects, our work in, for example, establishing a modelling and simulation centre in Brunei is virtually complete and we are looking forward to a formal opening of the Centre within the next six months or so.
One of the themes that has run through the last few I/ITSEC conferences has been the need to address the so-called STEM Gap – the lack of sufficient numbers of skilled graduates in Science, Technology, Engineering and Mathematics. Does CAE see this in the same way as other major stakeholders?
This is certainly a challenge facing the global aerospace and defence industry as a whole. I suppose we are very lucky in the fact that our headquarters location in Montreal has four superb universities in close proximity, so maybe we see the problem in a slightly different light. We are very proactive in this regard, it has to be said: we have corporate programmes that take in university students for familiarisation and cooperative education, and we end up hiring many of them. It is interesting to note that many of them are very excited by the technologies we already use or are developing, when they see and understand them. These programmes are very successful for us – they provide us with a rich pipeline of engineering and technical talent.
The real challenge, to be honest, is how we make these even people more successful. Here our extensive relationships with original equipment manufacturers are a great help; we are conscious of the fact that "one size does not fit all” in individual career planning, but keeping talent within the supply chain is important to us. We therefore already know and have personal relationships with some of the people who later appear as important players in our joint ventures and partnerships.
What about emerging markets? Do they represent specific challenges in understanding, approach or methodology?
I think we see the so-called emerging markets as great opportunities rather than challenges. CAE is also a bit unique in these markets in that we do not just come in to address an opportunity and then leave. We take a long-term view and make significant investments in key regions of the world, which you can see in what we’ve done in India, Asia and the Middle East, among others. There is very strong recognition throughout these markets as to what it is that simulation technology can do – what sort of effective solutions we can deliver. Our customers – existing and potential – clearly appreciate what aspects of CAE’s portfolio such as mission rehearsal and the Common Database can provide to their forces. Good examples are Oman, for instance, and Saudi Arabia, where we already play a significant technical role.
I think one thing that characterises these markets is that individually and collectively they have a clear vision of where their ultimate objectives lie. They then tend to be divided into two equally important types of customer: those who will embark from the outset on a large scale project, with all the issues relating to a steep learning curve that may involve; and those who will try a ‘toe in the water’ approach prior to a major commitment. We have ideas and potential solutions to share with both those categories of future customers and partners.
Finally, the Hawker Beechcraft AT-6 trainer, for which CAE is the Ground Based Training Systems partner and for which you are showcasing the flight simulator here at I/ITSEC, has been excluded from the US Air Force Light Air Support (LAS) programme that many see as the anchor for the programme. How does this effect your approach to this market?
Well, it is true that the Air Force has excluded the AT-6, though we do not yet know the reasons. There is now a federal lawsuit filed by Hawker Beechcraft and the US Air Force has issued a stop work order on the LAS contract. From our perspective, though, it is important to understand that we are in this for the long haul. We very rarely enter into a partnership of this nature on the basis of winning a single programme and we do a lot of market research before committing to this level of effort. We see a very significant market for light attack and armed reconnaissance aircraft of this nature and we will continue to support our partner Hawker Beechcraft in approaching these market opportunities. Mexico and Iraq, for instance, are very healthy prospects for the kind of solution Hawker Beechcraft and CAE can provide.
It’s also worth pointing out that this type of relationship – the one we have supported with Hawker Beechcraft on the AT-6 platform– is built on the strength and the value that our partners see in CAE. They know CAE as a technology leader in simulation, and a company who is focused, experienced, and uniquely global in this niche. I think you can see all of this in our presence here at I/ITSEC in Orlando!
Thank you for your time and candour.