Farnborough Show News - July 14, 2008 - (Page 52)

FA R N B O R O U G H 2 0 0 8 ON THE RECORD— Mike Strianese, President & CEO, L-3 Communications L-3 Grows and Becomes a Prime In just a decade L-3 Communications has grown from a $700 million spinoff of 10 Loral companies into a $14 billion in revenues giant that ranks as the sixth largest U.S. defense contractor. After many years as a “black box” supplier of almost anything electronic, it is increasingly taking on the role of prime contractor, the biggest win to date being the C-27J Spartan Joint Cargo Aircraft program. Founder and past chairman Frank Lanza, who ran the company until his death in June 2006, delighted in acquiring smaller companies and specialist technologies that were leaders in their own niches. L-3 grew by leaps and bounds with a dizzying portfolio of capabilities that allowed it to bid on just about anything. Since then, president and CEO Mike Strianese has changed course, slowing the acquisitions substantially and streamlining L-3 into customer focused groups that can leverage the company’s portfolio of technologies to go after bigger game, more regularly now as prime contractor. “We have spent the last couple of years consolidating, streamlining, and strengthening our core business areas to integrate all of the acquisitions of the past decade,” Strianese told Show News. “This is resulting in a company that is winning its share of work as a prime, but also has the flexibility and agility to bid the whole spectrum of business opportunities all the way down to the single black box. “The strategy is not to abandon the black box business, but to augment it and strengthen our capabilities. We can really work at any point we choose to, and we are demonstrating that we are actually doing that.” Lanza used to joke that L-3 was like the Sears catalog—it had a bit of everything. Strianese agreed that some people might think of L-3 as a “cats and dogs” company, a conglomerate of $20 million to $50 million acquisitions. “Well, these have been reorganized into very logical business areas with very focused management on each of these markets,” he said. “We are getting a lot of leverage from the way we position things. We are not done. There is more to go.” The business have been streamlined into four groups, each with a president reporting to Strianese: the $2.5 billion C3ISR (signals, communications and human intelligence) group; the $4.2 bil- L-3 president and CEO Mike Strianese. lion government services (support personnel, encourages them to think out of the box for new management, and leadership training); the business, especially in the civilian world. For $2.7 billion aircraft modernization and mainte- example, government services’ expertise in crinance group; and the $4.2 billion specialized sis planning won it a contract with the Center products group (advanced electronics, sensors, for Disease Control to prepare for natural disasters such as disease pandemics. satcom and naval systems). Another example is the marine power systems “Take government services,” said Strianese, “which has been fully integrated since I took over group, acquired originally to serve the U.S. Navy. as CEO. It was two groups, now it is one group. But with that market at such a low ebb it has It used to be over 13 or 14 divisions. It is now six, focused on international commercial shipbuildpotentially five. We just consolidated another ing where there are currently 2,000 ships under one last week. Of those five divisions, three of construction. The result: “We grew that business by almost 10% last year and will do the same them are a billion dollars.” The point is that the acquisitions have been again this year.” Strianese sees a lot of opportuntiy internamelded into significant businesses and given direction. “You get the idea,” said Strianese. “You tionally, especially as overseas business makes up don’t see any small numbers here. Not every- just eight percent of L-3’s revenues. It is growone of them is multibillion, but they are all ing, but not enough to outpace the company’s reaching a critical mass where we can fund inter- 12% growth. An office set up in the UK four years ago has nal development, we can have a lead marketing person, a business developer for each of these begun to pay dividends with contract wins, and the C-27J partnership with Finmeccanica is a core areas for us.” Strianese has driven home the need to focus prime example of international cooperation. Both on getting L-3’s capabilities aligned under very were initiated by Lanza “so we had already begun focused management. “It seems to be paying that trajectory” Strianese noted, but under his off because specialized products will lead the watch it is stepping out further on the world other groups with growth this year of some stage, starting with offices in Australia and New 12%,” driving L-3’s consolidated margins to Zealand, partnerships in Korea and a ‘world tour’ last year by senior managers. around 12%. “I have to make this company more global to He reviews business strategies regularly with group and division managers (“Now I can sit continue to grow. We have to open the aperture,” down with seven people instead of 42”) and Strianese said. —John Morris L-3 Highlights at Farnborough • L-3’s prime position on the C-27J Spartan Joint Cargo Aircraft for the U.S. Army and Air Force; • L-3’s joint pursuit with Northrop Grumman of the U.S. Navy’s EP-3E replacement; • L-3’s win last year as prime contractor on the team to provide real-time intelligence capability to the UK Ministry of Defence and its operational forces through the Integrated Broadcast Service program; • L-3’s SafeRoute ADS-B software that is currently being integrated fleet wide by UPS, saving the carrier approximately one million gallons of jet fuel per year; • L-3’s LINK, a high fidelity, state-of-the art pilot training system used on multiple platforms. 52 July 14, 2008 www.aviationweek.com/shownews http://www.aviationweek.com/shownews

Table of Contents Feed for the Digital Edition of Farnborough Show News - July 14, 2008

Farnborough Show News - July 14, 2008 Contents Thirty More Years CFM Reveals New Engine Boeing Reduces Forecast UAVs’ Quiet Revolution Finmeccanica: U.S. Success A Plethora of AESAs BAE North America Plus L-3 Becomes a Prime Better Late Than Never A Peek Behind the Curtain China’s J-10 Revealed Boeing’s 787 Dreamliner Breaking LM’s Hegemony

Farnborough Show News - July 14, 2008

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