Finmeccanica Becomes ‘One Company’ with Assimilation of Legacy Firms

by Richard Pettibone, Aerospace & Defense Companies Analyst, Forecast International

AgustaWestland Lynx Wildcat. Source - U.K. Ministry of Defence
AgustaWestland, now Finmeccanica-Helicopters, Lynx Wildcat.  Source – U.K. Ministry of Defence

Under Finmeccanica’s latest “One Company” restructuring effort (effective January 1, 2016), the firm is now focused on the helicopters; aeronautics; space; and catchall electronics, defense, and security systems sectors.  The company serves these sectors through seven divisions formed from the legacy companies of AgustaWestland, Alenia Aermacchi, Selex ES, Oto Melara, and WASS. Previously, the headquarters of Finmeccanica acted as more of a holding company for the aforementioned operating brands. The aim of the restructuring effort is to cut costs by removing areas of duplication in areas such as R&D and to divest unprofitable activities across the board.

This strategy follows the playbook of many industrial consolidations of late, with the focus being on core activities.  In Finmeccanica’s case, this means concentrating on operations in the aerospace, defense, and security industries.  Over the next five years, operations that do not fit in this paradigm will be divested, merged, or closed.  This trimming of the portfolio should help the firm increase its focus and better deploy limited resources to support continued growth in an anemic home market.

The organization is now believed to be structured as follows (percentage of ownership in joint ventures in parentheses):

1.  Helicopters

1.1       PZL-Swidnik SA

2.  Aircraft

3.  Aerostructures

3.1        ATR (50 percent)

4.  Airborne and Space Systems

4.1        Avionics and Communications

4.2        Airborne Radars and Sensors

4.3        Remotely Piloted Aerial Systems

4.4        Mission Systems

4.5        Space Activities

4.5.1            Thales Alenia Space (33 percent)

4.5.2            Telespazio (67 percent)

5.  Land and Naval Defence Electronics

5.1        Land Systems

5.2        Naval Systems

6.  Defence Systems

6.1        Eurotorp (50 percent)

6.2        MBDA (25 percent)

7.  Security and Information Systems

7.1        Homeland Security and Critical Infrastructure

7.2        Cyber Security and ICT Solutions

7.3        Air and Sea Traffic Control Systems

7.4        Automation Systems

Helicopters.  This unit, composed of the former AgustaWestland operations, manufactures civil and public utility helicopters for executive transport, emergency medical services, and commuter and support services for oil platforms.  It also produces military, patrol, and supervision combat helicopters.  In addition, this division is involved in helicopter retrofit, overhaul, and maintenance. Models currently being developed include the AW109 Trekker and AW609 tiltrotor.  Finmeccanica stated on Twitter that the AgustaWestland branding, “AW,” will continue to be used at the product level.

PZL-Swidnik SA.  This is a Polish subsidiary that manufactures helicopters, as well as aircraft structures for the fixed-wing market.  Major products include the SW-4 and W-3A Sokól helicopters.

Aircraft.  This unit, formerly Alenia Aermacchi, designs, constructs, and services trainer aircraft, military aircraft, special mission aircraft, and unmanned systems.  The division participates in the production of the Tornado multirole combat aircraft, AMX close support aircraft, Eurofighter Typhoon air superiority aircraft, and G222 tactical aircraft and its derivative, the C-27J.  This unit is also working on the nEUROn – the European technology demonstrator for an unmanned aircraft – and the U.S. F-35 Lightning II program.

Aerostructures.  This new division, born of Alenia Aermacchi’s aerostructures operations, provides structures and components for large commercial aircraft and executive jets.  It serves as a participant or subcontractor on Airbus (A319, A320, A321, A330/340, A500/600, A380) and Boeing (717, 757, 767, 777) programs, and on the new 787 and Dassault (Falcon 900EX and 2000) programs.  This unit produces moving surfaces, radomes, tail surfaces, vertical rudders, fins, flap parts, and fuselage panels and sections.  In a joint venture with Airbus Group, this unit produces the ATR 42 and ATR 72 family of regional transport aircraft.

Airborne and Space Systems.  Products for this division include integrated mission systems, airborne radars and sensors, electronic warfare systems, aerial target systems, simulation systems, and onboard avionics. The division’s space systems operations manufacture sensors, mission payloads, and robotic systems.

Land and Naval Defence Electronics. This division develops products that provide information superiority, situational awareness, command and control capability, weapons systems management, and network communications.  Products include electro-optical systems, airborne radars, defense and secure communications systems, and naval surface radars.

Defence Systems.  This unit handles the development and production of integrated air defense systems; ground and naval missiles and weapons systems; land-based and shipborne surveillance and fire-control radars; armored vehicles; naval, anti-aircraft, and field artillery; naval surface and underwater systems; torpedoes; and remotely piloted vehicles.

Security and Information Systems. This division provides network infrastructures and systems architecture solutions for homeland protection, cybersecurity, and air and vessel traffic management. The division also provides integrated sorting, handling, and tracking systems for letters, parcels, and baggage.

According to the company, Finmeccanica retains control of subsidiaries and joint ventures not included in the divisional scope. These businesses include: DRS Technologies, the U.S. subsidiary that deals with the supply of products, services, and integrated support for the military, intelligence agencies, and defense companies; ATR, the joint venture established with Airbus Group that manufactures regional aircraft; MBDA, the joint venture established with BAE Systems and Airbus Group that manufactures missile systems; and Telespazio and Thales Alenia Space, the two joint ventures established with Thales as part of the Space Alliance that provide satellite services and manufacture satellites and orbiting infrastructures, respectively.

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