July 14, 2008
EADS North America is at an inflection point in the company’s evolution, with the focus now set on expanding its business in defense-related mission systems, platforms, defense electronics, services/support and the homeland security sectors.
During a briefing for international journalists at this week’s Farnborough Airshow in England, Chief Operating Officer John H. Young, Jr. said EADS North America is well positioned for future growth, having already won key platform contracts and demonstrating excellent program performance as a U.S. prime contractor.
“EADS North America has established itself as a trusted, dependable and critical supplier to the U.S. Department of Defense,” he explained. “We have shown our ability to perform on programs entrusted to our company, and we have a tremendous amount of potential ahead of us.”
Created in 2003, EADS North America has successfully progressed from providing customer liaison support for parent company EADS – the world’s second largest aerospace and defense firm – into a business development function, and subsequently moving into program execution and winning major new business as a prime contractor.
“Today, EADS North America has revenues of over $1 billion, backed by a highly capable management team and the corporate structure to handle classified programs on the majority of critical technologies that are vital to the U.S. government,” Young explained. “Our future growth potential is based on expanding current programs, capturing new programs, as well as pursuing company acquisitions – moving up the value chain in both areas.”
Young said EADS North America’s strategy is to evolve from its role as a supplier on platform-based programs to being more involved in mission systems, subsystems and integrated systems. The expanded emphasis will include network-centric systems, defense electronics and operational services and support – including the full range of services and products necessary to enable, train and sustain combat forces and related systems.
“As approximately 70 percent of each U.S. defense dollar is spent on services, we will have a very distinct focus on growing our footprint in this sector,” Young explained. “We’re looking specifically at services where we can bring the value-added through the capabilities and depth of EADS.”
A key element of EADS North America’s business capture strategy is program performance – which is an important aspect in the U.S. defense acquisition process. “If we perform well on our programs, by definition we’ll be positioned to win new business,” Young said.
EADS North America’s commitment to meeting contractual obligations is demonstrated by its prime contractor role on the U.S. Army’s UH-72A Lakota Light Utility Helicopter – with more than 30 of these new rotary-wing aircraft delivered on-time or ahead of schedule to date. The Light Utility Helicopter contract was awarded to EADS North America in 2006.
Company acquisition is another cornerstone of EADS North America’s development roadmap, with the potential for purchases of both mid- and larger-sized businesses, Young said. An example of this strategy was EADS North America’s recent acquisition of PlantCML – a California-based emergency response technology provider with sales at just under $200 million.
EADS North America also will pursue new U.S. business opportunities based on the products of its EADS parent company. This includes the role as the airframe and refueling boom supplier for Northrop Grumman’s KC-45 Tanker, and the potential future offering of EADS’ new A400M multi-role airlifter to address a capability gap in Air Force airlift requirements.
Additional new business prospects in the U.S. marketplace range from EADS-developed mobile medical care facilities and special mission aircraft to target drones, communications encryption products and satellite imagery.
