Marc Parent
President and CEO, CAE
Published: 30 November 2009
Appointed president and chief executive officer of CAE in October, Marc Parent takes the helm of one of Canada's largest aerospace and defense companies during a slump in civil aviation and a growth period in the company's military market.
Marc Parent is CEO of Montreal-based CAE. (DAVID PUGLIESE / STAFF)
Originally trained as an engineer, Parent has nearly 25 years of experience in the aerospace industry. He started his career in 1984 with Canadair, focusing on the development of regional jet aircraft. He held key positions in the company, which Bombardier later bought, and was heavily involved in the development of the Challenger 604 and Q400 aircraft. In 1998, he was promoted to vice president of program management for all Bombardier aircraft development programs.
Parent joined CAE in February 2005 as the group president responsible for civil simulation products business, as well as the design, manufacture and support of products for the company's civil and military training businesses. His role was expanded in May 2006, when he was appointed group president for simulation products and military training and services. In November 2008, he was named executive vice president and chief operating officer, responsible for all four of CAE's business segments and new growth initiatives.
Q. How is CAE faring in the downturn?
A. Not bad. It's a tough year, there's no doubt about that. In the civilian airline business, there is a huge fallout from the world economic crisis. But our strategy of diversification has really paid off.
Over the last three or four years, we've really put a lot of our emphasis on growing our military business. So if you look today, the civil business, which is the most affected, is about 50 percent of our business now rather than 80 percent from previous years. Our civil business was hit pretty hard. We're not expecting a quick recovery.
But our military business has grown dramatically. We have a large backlog. We see the trend is very good for continued growth.
Q. Last year, you reached a record $1 billion in military sales. Do you see that trend continuing?
A. I separate order intake from revenue. Last year, over $300 million of that was one big order from the Canadian military. The year before, there was an order for the NH90 from Australia. Do I expect a billion dollars of orders this year? I don't know. But it's still going to be a good year for orders. I think we'll do well.
Q. This $300 million contract for the Canadian Forces was the training and simulation systems for the new fleet of C-130Js. Where are you with that?
A. We're busy executing the contract, designing and building the simulators and the whole solution we have for the government.
Q. You also have the simulator and training contract coming up for Canada's new CH-47 Chinooks?
A. We're negotiating a contract now. They've ordered the helicopter so we have to put the training solution in place, and we're working as fast as we can.
Q. CAE has been named overall simulator and training provider for the Canadian Forces. Does that mean, for instance, when the Air Force buys a new fixed-wing search-and-rescue aircraft, you will develop the simulation and training package for those planes?
A. That was the intent when the government put together the program; it covers not just one platform, but all of them. There's a real synergy that you get from that, from a training point of view. There's real savings in terms of being able to leverage common courseware, common learning systems and a real consistent ethos in how you train a military operator. At the time we put together the program, they were only considering the C-130J and the Chinook. Now, as the military gets more platforms, we expect that to work on those, as well. But we have to work all that out with the government.
Q. Is this training package a capability you could market internationally?
A. Yes. It resonates a lot. We've talked to a number of forces around the world, most recently Australia. They have a very similar kind of defense infrastructure, very similar kinds of platforms as Canada. They looked at what we put in for Canada and they could really see the advantages. To me, in that form or another form, such as being a training service integrator, I think that is exportable. And it's part of our strategy going forward. There's a real trend out there where governments are seeking to outsource their military pilot training.
And we have a lot of credibility in doing it. It's not just this contract. We were the first company to come up with a private financing initiative for military pilot training, in the U.K. at RAF Benson. We train all of the medium helicopter aircrew for the Royal Air Force. They do not only pilot training, but very sophisticated mission rehearsal. We're the only company in the world who has a fully independent C-130 aircrew training in Tampa. We also have the NH90 training system, part of a coalition of partners.
Q. Is CAE looking at expanding more into land simulation?
A. We've been doing land force technology. We've done a lot in the U.K. - gunnery trainers, forward air support trainers, artillery trainers. We're the de facto training company for the Warrior combat vehicle in the U.K. We recently developed a comprehensive training suite for the T-90 former Soviet tank for a big bid that's going on in India.
In Canada, we'll try to position ourselves as a training system provider to the OEMs [original equipment manufacturers] for land systems. One of our strategies in aviation is to always try to partner with the OEMs. We would see no difference in the land domain.
Q. What about the naval area?
A. We want to further expand in land and naval. If you look in Canada, we're already with Lockheed Martin, using mission simulation to support ... the Halifax-class frigate modernization program. We've got a big piece of that.
In India, we do what are called action speed tactical trainers, which are basically tools that do a constructive simulation, mainly to train commanders of ships and weapon-control system teams.
We can certainly expand. There are big contracts coming up. Look at the Halifax-class modernization in Canada. It is our aim to get a big part of that.
Q. More than what you have already?
A. Yes. If you look at Canada's spending on the Canada First Defence Strategy and the $20 billion for that, clearly we would like to have a good position on that. There's good opportunities. If you look at CAE's revenues, only 6 percent comes from Canada. There's opportunity to do more here.
Q. You mentioned T-90 tanks. Is there other potential work to develop simulation and training systems for Russian equipment?
A. Absolutely. There are a lot of T-90s, so it makes sense to have a training tool. We've already developed a simulator for the MiG-29 for Malaysia. Recently, we had a contract for a MiG-21 trainer for India.
Q. Do you see UAVs as a potential growth area for simulation?
A. Yes. The use of UAVs is growing at an unprecedented rate. We've been in that market for 10 years. We've had the contract for doing all the Predator training for the U.S. Air Force down at Creech Air Force Base in Nevada.
In some applications, it's to train the operators. But the other aspect is that a UAV is a flying sensor platform, so we're able to use our expertise to play a role in the C4ISR world, and that requires a high knowledge of system integration. That's one reason why we bought xwave [a Canadian maker of training and simulation software]. That bolsters our capability.
Q. Do you plan any other acquisitions?
A. The bulk of our growth will be organic. The contracts are out there, and we think we can win our fair share. But we continue to look at bolt-on acquisitions to either deepen our subject-matter expertise or penetration into other markets. We'll continue bolt-on, but I don't think we'd be looking at something very large right now. One of our tendencies is to stay fiscally very conservative, and that has paid off in this kind of market. So we won't move away from that, which is why we would look at bolt-on.
Q. About a third of your business comes from the North American market, a third from Europe and the rest from other locations around the world. Do you see those portions changing?
A. I'm not hard up that it has to be a third, a third, a third. We're organized in such a way that I put a very strong authority and autonomy to our global leaders. The reason we're able to grow our military business so much is because we gave a lot of autonomy to the local leaders; those people are there to grow the overseas business. We will grow and diversify at the rate that the opportunities come in those markets, not as the result of any specific drive by us to grow in any specific area. We positioned ourselves from the military standpoint where we think the strongest military budgets are, and the strongest growth is for simulation, modeling and training.
Q. You have been focused on India lately.
A. We bought Macmet in India, and they have been doing very well for us. If we want to grow quickly in a country, we seek and acquire a company. Macmet is recognized as a good simulation partner for the Indian government. Since then, we're under contract with a joint venture with HAL [Hindustan Aeronautics Ltd.], the biggest, by far, military contractor in India. We're doing a military and civil helicopter training center. We had those T-90 tanks.
Last year, we bought a company in Singapore and established ourselves there. ■
- By David Pugliese in Montreal.
COMPANY PROFILE
■ Founded: 1947.
■ Headquarters: Montreal.
■ Employees: 6,500 in 20 countries.
■ Revenues: More than 1.6 billion Canadian dollars ($1.5 billion) for the year ending March 31.
■ Operates 29 civil and military training centers, training more than 75,000 crew members yearly. Military centers in the United States and Britain provide flight and technical training for C-130H Hercules, CH-47 Chinook, EH101 Merlin and Puma operators. CAE and Agusta-Westland train helicopter operators at the Rotorsim center in Italy. CAE is part of a consortium that has opened the world's first NH90 training center in Germany.
Source: CAE, Defense News research
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