Saab: Advance On All Fronts
AWIN First
Bill Sweetman
Four years after taking on the job, Saab's CEO is optimistic about the company's outlook.
"We're just warming up," Saab Group president and CEO Hakan Bukshe says, expressing his optimism. Since Paris, Saab's flagship JAS 39E Gripen program has landed its first firm orders, ridden out Switzerland's referendum vote to withdraw from the project, and has seemed to be rolling successfully through negotiations on coproduction with Brazil. The company has also unveiled a complete range of land-based and maritime radars, due to be the first in service with gallium-nitride technology.
Boeing picked Saab last year as its design and development partner for the T-X trainer replacement program. Most recently, Saab and ThyssenKrupp reached final agreement on Saab's purchase of the former Kockums shipyard, which will make Saab the prime contractor on Sweden's new A26 submarine class.
"Our order backlog is the highest ever," Bukshe says, and it does not yet count the submarines or the Brazilian order. He adds that "75 per cent of our backlog is for export and 50 per cent of it is outside Europe."
Bukshe joined Saab in September 2010 after heading electricity producer E.ON Nordic. Before that, he says "I took a vacation from my last job and went to Farnborough."
"I don't believe," Bukshe says, "that if my father and mother had never met, Saab would be bankrupt. I joined a company that had been successful for 73 years." But, he adds, "competitors and others" did not see much of a future for the company, other than "an asymptotic decline to SEK15 billion ($2.2 billion) a year in sales."
Bukshe has pushed a few changes at Saab. "We increased our marketing activity and moved marketing and product development closer together. There were some areas where we needed to invest more." He cites improvements in efficiency, even though Saab was always a lean company. Notably, the fact that the JAS 39E is expected to cost less to operate than the C/D version was key to winning political approval for the program.
Brazil's order for 36 JAS 39E/Fs - with two more orders to follow, as the rest of Brazil's 100-strong fighter force is replaced - is being negotiated. An important milestone last week was the signature of a memorandum of understanding with Embraer covering technology transfer and co-development, including the design and testing of the JAS 39F two-seater. "Technology transfer was one of the reasons we were selected," Bukshe says. "People say, 'But you're giving everything away,' but I say 'When you get married, do you say that you're taking everything?'"
Sao Paulo, Bukshe notes, is already "Sweden's second largest industrial city" due to long-standing Swedish investment. The Wallenberg group, Saab's biggest shareholder, has been active in Brazil for more than a century.
"I'm very hopeful," says Bukshe of the company's T-X partnership with Boeing. "The leadership of Chris Chadwick" - Boeing's defense, space and security CEO - "is amazing. He's not a guy who will back off over some obstacle. He'll make that happen."
Saab can maintain its low-cost, lean model as it expands into other businesses. The risks of moving into a new business area - submarines - can be controlled, Bukshe says. "We're acquiring the whole of Kockums, including people who have designed and built submarines. We need to invest in some new machines, but basically it is there." And, he notes, Saab already works in naval combat systems, unmanned undersea vehicles and torpedoes.
The simple fact is that Sweden could not afford to maintain a defense industry without Saab's cost structure, Bukshe says. "We are getting the new Gripen and new submarines and we spend 1.17 percent of our GNP in defense. If we had the costs on our programs that our competitors have, the Swedish national debt would be 70 per cent higher - and I wouldn't be sitting here talking to you."
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