Finmeccanica set to unveil heavy losses Giuseppe Orsi, in his newly combined role as chairman and chief executive of Finmeccanica, will this week try to draw a line under a year of heavy losses and official investigations into corruption at the Italian defence and industrial conglomerate. Finmeccanica is expected by analysts to announce losses for 2011 of some €2.3bn on Tuesday as the new management uses the culmination of an internal power struggle to clean up the accounts through heavy writedowns on goodwill and contracts in the pipeline. Finmeccanica posted a 2010 net profit of €560m. Investors will want to hear an update from Mr Orsi on his talks with various parties to sell the lossmaking Ansaldo Breda rolling stock unit, as well as Ansaldo Energia and train systems Ansaldo STS (both profitable), plus its 14 per cent stake in Avio, an aerospace group. Mr Osi announced the planned sales last November and is under pressure to deliver to reduce the group's debt which analysts estimate stood at €3.4bn at end-2011. Mr Orsi is also expected to reiterate his attention to corporate ethics and governance in the wake of investigations by state prosecutors into suspected slush funds and false accounting at Finmeccanica and Enav, the civilian air traffic controller. Those probes, which are continuing, led a reluctant Pier Francesco Guarguaglini to step down as chairman of Finmeccanica, on December 1, followed by his wife, Marina Grossi, as head of the Selex Sistemi Integrati unit. They deny wrongdoing and neither have been charged. The leading couple are among 45 Finmeccanica managers to have been removed under Mr Orsi's watch for reasons of "non-performance" since he took over from Mr Guarguaglini as chief executive last May, backed by the then finance minister, Giulio Tremonti, holder of the government's 32 per cent controlling stake. Silvio Berlusconi's resignation as prime minister last November and his replacement by the unelected Mario Monti, a former European competition commissioner, has benefited Mr Orsi as he seeks to steer Finmeccanica back to a healthy profit in 2013 and out of the Berlusconi-Guarguaglini era. Those days of political interference when Finmeccanica obligingly took on non-profitable government contracts were vividly illustrated by Mr Guarguaglini himself when he told a television interviewer that he had employed a Colombian beauty queen as a consultant on the suggestion of Mr Berlusconi. Mr Monti stressed his pro-market approach to industry this month when he said publicly that Fiat - Italy's biggest industrial group - should invest where best. "Fiat has no duty to think only about Italy," he said. Those words are seen applying also to Finmeccanica, Italy's second-largest industrial company with 71,000 workers but already some 4,000 fewer under Mr Orsi who has chosen a more modest company jet and limousine and is slashing costs at the company's Rome headquarters. Mr Orsi's "no tolerance" of corporate malpractice was demonstrated by the appointment of Giuseppe Grechi, a respected former judge, as head of its governance watchdog. Company officials say evidence of Finmeccanica's good standing was the acceptance in January by William Lynn, former deputy defence secretary in the Obama administration, of the post of chief executive of DRS Technologies. Mr Orsi said Mr Lynn would develop business in North America and "be responsible for ensuring the highest standards of corporate governance, business ethics and security compliance across the company." Analysts expect a goodwill writedown of over €500m for DRS, the US defence electronics subsidiary which Mr Guarguaglini acquired in 2008 for what the market saw as an expensive $5.2bn. Finmeccanica's shares traded at over €20 that year. It closed at €3.52 last week. Finmeccanica needs "painful but necessary cleanings," Mediobanca Securities said in a note to investors, predicting a "smaller but cleaner" company would emerge.