Canadian Defence Review
October 14, 2011
Title: Report on Quebec’s Aerospace and Defence Strategy
A lot has changed since Canadian Defence Review published its last Report on Quebec’s Aerospace and Defence industry two years ago. Pending procurement announcements, expansions, new technology development and expansions are keeping sector players busier than ever.
While Ontario has long been the main hub of land vehicle production, such as cars, trucks, armoured vehicles and so on, Quebec has focused it efforts on developing its aerospace sector, hosting world leaders, such as Bombardier, Bell Helicopter and L-3 MAS. According to Aero Montreal, a sector association, the province hosts close to 235 aerospace businesses which generated $10.9 billion in revenues during 2010, 80 percent of which is exported.
That said, according to Martin Gagné, group president (military products, training and services), at CAE, who also heads Aero Montreal’s Defence and National Security Working Group, there are is a lot of uncertainty in the marketplace due to current tough economic times. “With tight budgets, countries are looking at different air fleets to see what they can afford,” says Gagné. “Those that can’t make immediate procurements are looking for new ways to maintain readiness. In these tough times, we need to find new ways to part of the overall solution.”
Derek Gilmour, vice-president (sales, marketing and administration, specialized and amphibious aircraft) at Bombardier holds a similar pragmatic view. “(Events) in the international economy reflect themselves in the aerospace sector,” says Gilmour. “Right now there is some sluggishness. Long-term though, things look better.”
In short, Quebec’s aerospace sector, like the rest of its defence industry, can be characterized by a tough resilient attitude. For example Quebec companies also have high hopes stemming from the a variety of land procurement initiatives as well as National Shipbuilding Procurement Strategy (NSPS) which will see the federal government award major contracts to build a slew of combat and non-combat defence vessels during the coming decade. Following is our report on some of the more prominent companies and initiatives.
CAE: a global flight simulation technology leader
In September CAE, one of Quebec top aerospace players, announced that it had won $100 million in contracts to design and build four additional C-130J simulators for the US military, to provide support services for the German Air Force’s Eurofighter simulators and to upgrade Tornado simulators. In addition, over the past two decades, the company has developed more training systems for the C-130 than any company, including all weapons systems trainers for the aircraft’s latest variant. “Our defence arm is going well,” concludes Gagné. “Last year our military business comprised 53 percent of the company’s overall sales and we finished the period with more than $1 billion in orders, which gives us a great backlog to work from.”
L-3 MAS: keeping Canada’s fighters in fighting shape
L-3 MAS has also been keeping busy. The company employs 900 engineers, technicians and professionals in Canada, many at its site at Montreal’s Mirabel International Airport, where it services a large part of Canada’s F-18 fighter jets. In August, L-3 MAS won a contract to implement the Prime Air Vehicle (PAV) Optimized Weapon System Support initiative on that existing fleet. Another priority: trying to get action from Canada’s planned Joint Strike Fighter participation. On that score L-3 MAS recently inked a Memorandum of Understanding (MOU) with Lockheed Martin to try to make available in-country-support for the 65 F-35s that are expected to be purchased.
Bombardier: more than just civilian capabilities
Bombardier, one of Quebec’s largest aerospace players with $17.7 billion in sales during its most recent completed fiscal year, is primarily thought of as a producer of civilian aircraft. These include its Challenger, Q400s and its regional jet series. However many Bombardier planes have military, search and rescue and marine patrol capabilities. As a result, the company is also making great headway on the defence side says Gilmour.
For example in late September, the company announced that its Global Express XRS was granted the E-11A designation by the US Air Force, which now owns three of the aircraft, including its latest acquisition, which will be used as an overhead communications-relay platform in Asia. The aircraft will be equipped with Northrop Grunman’s Battlefield Airborne Communication Node, which enables various battlefield communications systems to share data. According to Gilmour, new versions of the company’s Global Express, which will feature longer ranges and faster speeds, will be available in 2016 and 2017 and will be particularly attractive options for many defence and VIP-travel related needs.
Bell Helicopter: a long-time CF supplier
This fall Bell Helicopter celebrated a more than 40-year relationship with the Canadian Armed Forces, which has flown a variety of the company’s helicopters and configurations during that time. The company is known in particular for the considerable in-service support work that it does, winning recently for example a ten-year deal related to the CH-146 Griffon Fleet under the 10-year Optimized Weapon System Support contract. In September Bell also inked a deal to supply three Bell 429s to the Australian Air Force, to which it has also provide sales and support for its Bell 47 Sioux, Bell 206 Kiowa and Bell UH-1 copters.
GE Aviation: aircraft engine components
Another somewhat “under-the-radar” Quebec defence sector player is GE Aviation, which in 2010 announced a six-year $63 million investment to diversify manufacturing capabilities at its Bromont Quebec plant. At the time the facility employed 545 people, with another 80 set to join them with the expansion. GE Aviation Quebec’s operations produce a variety of aircraft engine components including fan blades, metal leading edges, and various type of blades, which are used in various civilian and military aircraft engines including the CFM56 and GEnx.
CMC Electronics: an avionics leader
Another aerospace player with considerable momentum is CMC Electronics, which produces what it calls “innovative cockpit systems integration and avionics solutions,” for both the commercial and military markets. CMC Electronics, formerly known as Canadian Marconi Company, put another notch in its belt in September, when it was selected by Canada’s Department of National Defence to supply its latest generation of Flight Management System (FMS) and high-performance Global Positioning System Wide Area Augmentation System (GPS WAAS) sensors, for the avionics upgrade of DND’s A310 fleet of five Multi-role Transport and Tanker aircraft (MRTT).
These aircraft, also known as the CC-150 Polarises have been around since 1997, and were due for the new flight management system, to be known as the CMA-9000, which will operate in the passenger, cargo, VIP and tanker configurations. “The company’s strategy has been to have a balanced portfolio of military and commercial business,” notes Jean-Michel Comtois, its vice-president (marketing and sales, government and public affairs). The company also recently restructured its business into a Cockpits and Systems Integration Unit and an Aviation Products unit.
Discovery Air: Quebec’s Top Aces
Discovery Air is best known in Quebec for its Top Aces division, which supplies airborne training services to the Canadian Army, Navy and Air Force, its fleet of 16 Alpha Jet and four Westwind “aggressor aircraft as well as forward air controllers for the CF’s deployments in Afghanistan. In recent years the company has been angling to ink a long-term Contracted Airborne Training Services (CATS) contract, which governs the services that it offers DND, to replace the existing system which has seen repeated renewals of short-term deals. However earlier this year, Public Works and Government Services Canada nixed that idea and announced that it would be issuing a new RFP. That said, Top Aces’ existing standing offer was extended until June 2012, with an option for another 12 months. According to Gary Venman, the company’s vice-president (government services) Discovery Air also recently formed a new group called Discovery Air Innovations (DAI) which has a mandate to launch disruptive technologies and penetrate new markets with the company’s portfolio of services.
Obzerv Technologies: imaging solutions
Quebec companies are developing a variety of modern technologies that are needed to survive in fast changing global conflicts. This summer, Obzerv Technologies, which is known for its range-gazing IED detection solutions, announced the commercial availability of a Modular Active Range-Gated Camera. The company hopes that the new cameras can fit into the large numbers of Airborne Multi-Spectrum Imaging Turrets currently being produced around the world for applications ranging from intelligence, surveillance and reconnaissance work to search and rescue operations. According to Alain Laflamme, the company’s vice-president (sales and marketing), the company also recently inked a contract to supply 46 cameras to the Indian government which will be installed in towers and lighthouses and used for coastal surveillance. “It’s a very important deal for us,” notes Laflamme. “Because it significantly boosts our credibility as an international player in this market.”
Chantier Davie Canada: big hopes from NSPS
Once player hoping for major work from the NSPS program, is Chantier Davie Canada Inc. of Levis Quebec. The company was founded when Upper Lakes Group of Ontario bought out the assets of its predecessor in July for a reported $28 million. The company forms part of a joint venture with SNC-Lavalin, which filed a bid to become the main builder of the non-combat ships portion of the NSPS initiative. According to John Dewar, a vice-president at Upper Lakes Group, if successful, the initiative would breathe new life into Quebec’s shipbuilding industry, creating 1,500 jobs in the province, as well as 500 in St-Catharines Ontario.
SNC-Lavalin: MCDV and overseas deployment support
In addition to trying to get work under the NSPS, SNC Lavalin, the Quebec engineering giant, brings considerable defence industry experience to the table. The company’s SNC-Lavalin Defence Programs (SLDPI) division was formed to manage and later provide ongoing support for the 12 vessel Marine Coastal Defence Vehicles (MCDV) program. SNC-Lavalin is also not above getting its hands dirty. For example, another of its divisions, SNC-Lavalin PAE, which won the Canadian Forces Contractor Augmentation Program (CANCAP) contract in 2002, provides logistical support and information technology to Canadian Forces in Afghanistan.
L-3 MAPPS: IPMSs for Canada’s navy
Like all naval sector suppliers, the folk at L-3 MAPPS, which supply Integrated Platform Management Systems (IPMSs) that have been used by the Canadian navy for close to 30 years, have been sitting on pins and needles, waiting for announcements related to NSPS. To help generate some business says Rangesh Kasturi, L-3 MAPPS’s vice-president (marketing and communications), the company will be teaming with British Columbia-based Offshore Systems Limited (OSL). The goal is to combine L-3 MAPPS’s IPMS into the latter’s ECPINS navigation and bridge system. “Control and ship navigation systems and increasingly becoming integrated,” notes Kasturi. “Since we have two of the world’s leaders in both fields right here in Canada, it makes sense that we should work together.”
Rheinmetall Defence: land vehicle hopes
Rheinmetall Defence, which was founded in 1986 as Oerlikon Contraves, and was acquired in by Germany’s Rheinmetall Group in 1999, this year celebrated its 25th anniversary. The company, which employs 250 highly-skilled professionals, at its Saint-Jean-sur-Richelieu and Ottawa locations, is currently placing great hopes in its land vehicles capabilities.
According to Duncan Hills, Rheinmetall’s director (government relations and industrial benefits), the firm has submitted proposals to the Canadian government for the Close Combat Vehicle initiative and to convert Leopard battle tanks into armoured recovery vehicles, and armoured engineering vehicles. Rheinmetall is also part of a group headed by Textron Systems Canada that is bidding on DND’s Tactical Armoured Patrol Vehicle (TAPV) initiative. If the bid, which includes Kongsberg Protech Systems and other partners succeeds, Rheinmetall would conduct final vehicle assembly and numerous integration functions.
Pratt & Whitney Canada: committed to Quebec
Another company that has made a big investment in Quebec is aerospace engine giant Pratt & Whitney Canada. This spring, the firm opened the $575 million Mirabel Aerospace Center, which according to a company spokesperson “incorporates state-of-the-art equipment and the most advanced manufacturing technologies and processes.” There the company will test and assemble a new generation family of large business jet engines.
Peter Diekmeyer (Peter@peterdiekmeyer.com) is Canadian Defence Review’s Quebec Bureau Chief.
© 2011, 2010, 2009, 2008, 2007, 2006, 2005, 2004, 2003, 2002, 2001, 2000, 1999, 1998
Peter Diekmeyer Communications Inc.