Scotland ‘must embrace aerospace and defence’

By Ian Fraser

Published: The Sunday Times

Date: June 21, 2009

Norman Bone urges Scottish Enterprise to recognise economic potential of defence and aerospace industries

Norman Bone, senior vice-president at Edinburgh-based Selex Galileo has called on the government of Alex Salmond to include the aerospace and defence sector as one of its priorities for future economic growth

The government currently prioritises six sectors which it deems capable of hauling Scotland out of recession and fostering long-term sustainable economic growth. These include life sciences, digital media, energy, tourism and financial services. Despite having been asked repeatedly over the past few years, Scottish Enterprise refuses to recognise the aerospace and defence sector in the same way.

Bone said this is wrongheaded, given that the aerospace and defence sector employs 16,000 people in Scotland, generates £2.3 billion in revenues of which more than half (£1.3 billion) is exported, brings high-level sustainable jobs, and is expanding. Salaries in the the aerospace and defence sector in Scotland are 32-34% higher than the Scottish average wage.

Speaking at the Paris air show, Bone said: “It deserves to be a priority sector because of what it brings to the Scottish economy and because of the types of jobs – the sustainable jobs – it brings. With 16,000 people and one of the most successful export businesses in Scotland, it should be at the forefront.”

“We’ve got a very good relationship with Scottish Enterprise, who have been very helpful over the last few years. But the thing I’ve always fallen out with Jack Perry (SE’s chief executive) over is that he names his key industries and aerospace and defence is not one of them. I’ll certainly be raising this with whoever takes over from him.”

Large companies in the sector in Scotland also include Rolls-Royce, Spirit Aerosystems, Goodrich, General Electric, BAE Systems, Thales, Babcock and Raytheon. These companies outsource much of their manufacturing to smaller Scottish based companies supporting a further 160 players in the sector.

Bone suspects that Salmond’s reservations about embracing the sector stem from the fact defence is a reserved matter and the nuclear dimension, given Babcock’s role at the Faslane submarine base.

Selex Galileo, part of Rome-based defence giant Finmeccanica, employs 1,900 people in Edinburgh and has a turnover of £490m, 40% of which is exported.

The site, formerly operated by Ferranti, GEC Marconi and BAE Systems, specialises in developing avionics equipment – including radar, sensors, missile detection systems and electronic warfare suites – for both civilian and military aircraft.

Selex Galileo has recently received orders from customers in the US, Ecuador, Italy, Brazil and Sweden.

Bob Mason, executive vice-president of Selex Galileo in Edinburgh, said: “The contract we’re about to sign with Swedish aerospace means we will actually be getting a radar into the Saab Grippen. This is a huge opportunity for us. It gives us secondary platform alongside Eurofighter.”

Bone said that Selex Galileo “final negotiations” with two or three “exotic countries” and will announce further contract wins in the next three months. He added that the company’s recent export success is compensating for a possible downturn in orders from the UK Ministry of Defence. He said the 40% of the Edinburgh site’s turnover now goes into the Eurofighter Typhoon, down from 60% a few years ago.

Last year Spirit AeroSystems, based at Prestwick, secured a $3.7bn contract with Airbus to produce wing structures for a range of passenger aircraft over the next nine years. The Kansas-headquartered group also opened a maintenance, repair and overhaul station at the Ayrshire airport for the repair and overhaul of Boeing 737NG and 777 aircraft.

An edited version of this article was published in The Sunday Times on June 21, 2009

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