Aero and defence industries as problem-solvers

Posted on 21 Jan 2011 by The Manufacturer

At the A|D|S 2011 annual dinner in London, recently-elected A|D|S President Peter Rogers, Chief Executive of Babcock, addressed the 700 delegates.

Mr Rogers sought to demonstrate how the UK’s aerospace, defence, security and space industries can boost the UK economy as well as help the Government meet its priorities for even greater value for money. As well as looking ahead to 2011 and what it may bring he also took time to look back at the first full year of operation of A|D|S as the trade organisation representing these successful UK sectors that together employ around half a million people and generate over £60bn per year to the British economy.

Mr Rogers’ speech in full:
A|D|S members, distinguished guests. It is my pleasant duty – indeed my first job as the second President of A|D|S – to address you this evening, and to offer you some reflections on the state of our industry. It is, of course, always easier to be the second to do something than to be the first (even thoughI was the first to be elected!). So, I must salute my predecessor, Alex Dorrian, for having led A|D|S through the merger phase and its first crucial year.

Looking back 2010 was hardly a straightforward time on which for A|D|S to cut its teeth. Twelve months ago, there was the late surge by the last Government to get things done before the general election; then the election itself, for which A|D|S produced its own set of manifestos for our sectors, and afterwards, the emergence of the first peacetime Coalition Government for 80 years, inevitably teeming with new ideas – and a fresh Parliament with no fewer than 266 new MPs.

A Strategic Defence and Security Review was swiftly set in motion with profound implications all-round. Somewhere in the middle of all this was a small event called the Farnborough Air Show. Oh yes, and a volcano in Iceland erupted, to remind everyone that regular and safe air travel is vital to our society and not to be taken for granted.

Now I don’t want to catalogue all the things that went on in 2010 that were important to our different sectors. But I would like to mention that that lengthy list included the report from the Space Innovation and Growth Team plus the first ever “Security Farnborough” also known as “HOSDB” – or to give it its full title, the Home Office Scientific Development Branch Exhibition. The point I want to make is that last year was an exceptional one, with a lot of changes affecting all our sectors and all our members.

These developments were a massive challenge to the newly formed structure of A|D|S Boards and Committees to handle their implications and I believe the Association came through this baptism of fire with much merit and significant success. This was thanks, of course, to the intellectual input and hard work of many of the 900 odd members of A|D|S. This includes many individuals here tonight, but, above all to the co-ordinating effort of the A|D|S Executive team led by Ian Godden and Rees Ward. I am sure you will want to join me in thanking them for the tremendous work they have put in over the last year.

Looking ahead to 2011 and the contribution our industries can make
At the New Year when I reviewed the newspaper forecasts for the year of my presidency of A|D|S, it was hard to avoid grim phrases like “the age of austerity”. The headlines have been – and will increasingly be – dominated by cuts in public sector spending and what those cuts – which I should remind you “UK plc” as a whole supports – may give rise to. I have no doubt that A|D|S has many members who will lose some, perhaps a lot, of business over this Parliament as a result.

But the outlook is not all gloomy. Major civil aircraft producers are increasing production; security and space remain key growth areas, and in defence the prospects for exports and support services remain positive. It is vitally important that we do not get locked into a negative way of thinking about the future, for two reasons in particular.

A British success story
First, our sectors are real and ongoing success stories for the British economy. I don’t need to rehearse the impressive facts to this audience as it would be preaching to the converted. You know the story: we are big employers and trainers of highly skilled staff, including thousands of graduates and apprentices; big investors in research and development; big cultivators in our supply chain of specialist SMEs; big exporters of equipment and services and big generators of tax revenue for the Treasury. This is true of all our sectors from space to civil aviation, from defence to cyber security. In my book A|D|S can’t tell this story too many times: it is the epitome of the rebalanced economy and the advanced engineering which the Government says it wishes to see.

A problem-solving partner for the Government to benefit the UK’s future
Second, I do not believe it is beyond our capabilities – far from it – for us to understand the changed environment to listen and to adjust for the long term. The message from the Government is clear – value for money and more for less – is the name of the game. I believe that the industries represented here are more than capable of delivering this and of taking advantage of the increased focus on support of exports. Like it or not, the Government is our customer and too often our relations border on the antagonistic rather than the constructive.

You may just have noticed – if only in a stream of broadsheet articles in the last quarter of last year – that industry’s reputation is in poor shape. We are all suffering from the excesses of parts of the financial sector. The economic climate is now much tougher than even at the toughest points of the 1980s and the constraints on the Government’s budget are well understood.

We have to help the Government through this rough patch by improving efficiency and, above all, by innovating and adapting. If we don’t make that kind of behavioural investment I mentioned a few moments ago, there might not be a major industry here in 20 years’ time. There are plenty of other countries all too ready to invest in the required capability and culture. The question to be answered is this: do we want to have thriving civil air, defence, security and space industries here in the UK in 2025 or not. If we do, let’s work together – with Government – to make that happen. I am looking forward to my year of grappling with these issues with the help of the four Vice Presidents, the Council and the A|D|S staff. We are determined to do all we can collectively to help you succeed.