Title: Ready for takeoff: A report on Quebec’s Aerospace and Defence sector

Sub-title: Led by innovative players such L-3 Communications, CAE, Bombardier and Presagis, Quebec’s aerospace and defence sector is playing a growing role on the Canadian and the world stages.

 

When the Department of National Defence made its recent announcements regarding acquisitions to boost its strategic lift capabilities, the Canadian defence establishment immediately jumped to attention. While most observers tended to agree that purchase of the Boeing C-17 Globemasters and the Lockheed Martin Hercules C-130s was a major step forward, stakeholders across the country immediately set about trying to figure out how the make the moves work for them.

 

Few among them threw more of their heart into the task than Jacques Saada, president of the Quebec Aerospace Association. “When contracts of that size are handed out, the potential Industrial Regional Benefit opportunities are huge,” said Saada of the Boeing deal, which is valued at $3.4 billion over 20 years and the Lockheed Martin initiative, valued at $1.4 billion. “That means our members, which are mostly small-and-medium sized subcontractors, expect us to help make sure that Quebec’s aerospace sector gets its share.”

 

L-3 MAS: not just wrench and socket

Sylvain Bédard, president of Mirabel based L-3 MAS agrees. In mid July, the company proudly announced a $106 million export contract with the Royal Australian Air Force, to refurbish the country’s ageing fleet of F-18s. Under the deal, L-3 MAS will replace the Australian fighters’ center barrels, which hold the planes together. The move is expected to extend the RAAF’s fleet’s service window significantly.

 

The Australia contract was a major win for both L-3 MAS and the Quebec economy. The deal will keep more than 100 mostly highly-skilled employees busy at the company’s Mirabel facility and thus help maintain a key capability intact for the Canadian defence industry. 

 

However Bédard is quick to note that much of the Australia F-18 contract’s success was due to DND’s implementation of what he calls a “smart,” IRB policy, a strategy that he hopes will be extended to the new strategic left acquisitions.

 

“When DND made the original deal to buy Canada’s F-18 fighter planes, they also picked up some of the intellectual property rights that went along with it,” said Bédard. “That’s important, because as a result, we are now able to make improvements to the plane and to export to other countries. We are also making efforts in other countries too, like Spain. If DND had not acquired the IP rights, our potential would have been far more modest.”

 

CAE: from simulation to mission rehearsal

Writing about Quebec’s challenges regarding industrial regional benefits in an article about the province’s aerospace and defence sector, can be somewhat misleading. That’s because while over the years Quebec politicians have a gained a reputation for demanding their fair share of the IRB pie, many local defence industry players have become global centers of excellence in their own right.

 

Few companies exemplify this more than CAE, a firm whose simulator technology now comprises the lion’s share of the world market. “We are growing at a very good rate and thus it is an exiting time both for CAE and for Quebec,” says Martin Gagné, the company’s executive vice-president (marketing and sales). “The defence market continues to be solid and it balances neatly with our civil side, which has been doing well too.”

 

“Our goal is to identify new aircraft projects that are coming on-stream and to provide a broad platform with long legs,” says Gagné. “For example we have recently begun broadening the range of defence industry solutions that we provide. One example is expanding beyond pilot training and safety simulations into mission rehearsal.”

 

Key to helping maintain a virtuous cycle of excellence at CAE, is the company’s global reach. For example CAE was one of the first in Canada to begin leveraging the talents of Indian software and design professionals. Now, building on its development office in Bangalore, the Quebec flight simulator giant is broadening its sub-continental presence through both acquisitions and collaborative endeavors. One long range goal: getting a piece of the action once that country announces its intentions regarding the acquisition of new state-of-the-art fighter jets.

 

CAE`s international capabilities bring big spin-off benefits here to Canada. For example the company is a working hard on Public Works and Government Services Canada’s RFP for an Operational Training Systems Provider (OSTP) proposal to acquire equipment and aircrew training and services for the next 20 years. 

 

Bombardier: ready for tomorrow’s challenges

When talking about Quebec’s aerospace and defence sector, another player that springs immediately to mind is Bombardier. This innovative company’s 16,000 employees (12,000 of which are located in the Montreal area) not only produce world class transport, cargo and business aircraft, they are also surprisingly active in the defence sector as well. The company’s many existing platforms can be tailored to a variety of defence applications ranging for general transport to medical evacuation, C4ISR and search and rescue.

 

“One of our biggest advantages is our diversity,” says Derek Gilmour, Bombardier’s vice-president (sales and administrative). “The fact that we design and manufacture such a wide variety of aircraft at our Lear, De Havilland and Montreal facilities means that when we produce defence related solutions, they are better targeted as to what DND actually needs, as opposed to what we want to sell them.”

 

One indication of the broad acceptance that Bombardier aircraft have gained in international markets can be seen in the large number of countries that buy its equipment. During the past few months alone, Bombardier has inked contracts in Germany, the UK and Malaysia, which in June ordered two multipurpose amphibious aircraft for the Malaysian Maritime Enforcement Agency.

 

According to Gilmour, those past successes speak volumes. “We have more than 300 special mission aircraft out there in deployments around the world and we plan to build on that success,” says Gilmore. “The Canadian multipurpose aircraft initiative is currently gaining ground and we hope to have a role there too.”

 

L-3 MAPPS

In fact one factor that emerges consistently when interviewing Quebec defence sector players is how closely they all are integrated into the global economy. “Our technology is highly specialized and we would not be able to survive if we limited ourselves to domestic demand alone,” admits Rangesh Kasturi, vice-president for marketing and sales at L-3 MAPPs, which develops and builds marine control systems.  The company has operations in the United States, the United Kingdom and in India, which is in the midst of a substantial naval expansion program which includes frigates, landing craft and air craft carriers.

 

“We export close to 90 percent of our production,” says Kasturi. “But we are also very optimistic about the value that we can add to certain Canadian initiatives such as the IPMS frigate upgrades, the Arctic vessel programs and the new Joint Support Ship initiatives.”

 

But lest anyone think that L-MAPPs supplies just naval technology, Kasturi is there to quickly correct them. The company has more than two decades of experience in the marine automation field. And this summer L3 MAPPS announced a deal to upgrade the simulator platform at the French Institute for Radiological Protection and Nuclear Safety.

 

Presagis (technology use increasing at a faster pace)

Despite Quebec Aerospace and Defence Industry’s considerable progress in recent years, few companies are resting on their laurels, says Patrice Commune, president of Presagis Inc. The company is a worldwide leader in commercial-off-the-shelf (COTS) modeling, simulation, and embedded display graphics software and has more than 1,000 customers, including most of the largest defence players.

 

But according to Commune, despite Presagis’s leadership role, clients are always asking for new modifications, upgrades and additional functionality. `Lately we have seen a significant upsurge in demand for ground and helicopter simulations,” says Commune. “These require high fidelity models and databases, so we are working hard to make sure that our customers can get access to them by making our software code compatible with that of other providers.”

 

To help accomplish this, earlier this summer, Presgis introduced Aeria, a unified vision for modeling and simulation workflow. The technology brings together a singular portfolio of COTS software into an open, scalable and reusable platform for the development of brood applications.

 

Is “Canada First” good for Quebec?

The big question right now facing Quebec’s Aerospace and Defence industry players relates to repercussions following the announcement earlier this summer of the Conservative Government s Canada First Defence Strategy. On paper, the renewed commitment by DND to a strong relationship with
Canada’s defence industry is a strong positive.

 

But Quebecers tend to rely more on what politicians do, than on what they say. “There is no such thing as the status quo in the defence industry,” says Jacques Saada, of the Quebec Aerospace Association. “The proof is in the pudding. Right now we are still keeping an eye on how the industrial and regional benefits will line up regarding the strategic lift acquisitions. So far the Quebec offsets from the Lockheed purchases do not correspond to our share of the overall market. With the Boeing deal it’s going a little better. But we’ll have a better idea when the final numbers come in.”

 

Peter Diekmeyer (peter@peterdiekmeyer.com) is Canadian Defence Review’s Quebec correspondent.

 

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