Alliances Strengthen Smiths’ Place In Defense Contracts

April 22, 2002
| By Katy Rent |
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GRAND RAPIDS — Smiths Aerospace, part of the Smiths Group, has announced strategic agreements with two aerospace systems integrators.

Smiths says that in separate agreements with Lockheed Martin and BAE Systems, it is working to secure its place as a top aerospace supplier.

BAE is a joint venture of British Aerospace and Marconi Electronics Systems. Lockheed Martin is the contractor whose design for the F-35 joint strike fighter last year won Department of Defense approval.

The aircraft, now slated for production, is to replace the U.S. Air Force F-16 and A-10 Warthog, to complement the US Navy's F-18 and to replace the Marine Corps' Harrier and the British Royal Navy's Sea Harrier. It also is to be added to Canada's aircraft inventory.

The F-35 embodies stealth technology but also is more agile than any other combat aircraft flying. It also is more affordable in that it will bring closer the day when all three services can operate with differing configurations of the same basic aircraft.

The military contracts for the F-35 also penalize overruns and reward savings, encouraging the strategic arrangements into which Smiths is entering with Lockheed Martin and BAE systems.

Both strategies are aimed at working together to form new business alliances, common initiatives and mutual cost savings and will go into effect immediately.

"There are clear benefits to be gained by both companies in pursuing a joint supply chain strategy that rationalizes and aligns our respective strengths," said John Ferrie, group managing director for Smiths.

"Taken with our recent selection by Boeing for a major integrated system on the 767 tanker program, these agreements strengthen Smiths' position as a major first-tier systems supplier to the world's leading aircraft manufacturers."

Smiths Aerospace is the first of BAE Systems' 17 so-called Enterprise Suppliers to agree to such a supply chain strategy. The strategy aims at delivering sustained performance improvement and will be put to use in BAE programs including the Eurofighter, Hawk, Nimrod and MRA4, and in future business ventures between the companies.

"This will solidify our position as a key supplier with BAE and Lockheed and strengthen our position as getting the heads-up as the first on development projects," said Jennifer Villarreal, communications manager.

"It ensures us a position and makes us first in line, and also allows us to be involved in the development process so we can make the best products and work together on quality."

BAE is a global systems company with international reach as a prime contractor and systems integrator in the air, land, sea, space and command and control market sectors with skills in naval platforms, military aircraft, electronics, systems integration and other technologies.

Lockheed Martin has executed a Strategic Supplier Program Memorandum of Understanding with Smiths, which focuses on program strategies and efficiencies. The agreement will cover future and current projects between the two companies, across all platforms.

Lockheed Martin is a global firm, prominently engaged in the research, design, development, manufacture and integration of advanced technology systems, products and services for government and commercial customers.

The immediate objective of the Strategic Supplier Program is to establish, identify and prioritize common initiatives and near-term goals to begin the process for capturing mutual cost savings expected with the implementation of the Strategic Supplier concept.

"This alliance also assures Smiths a seat at the table," said Villarreal.

"It shows that Smiths is committed, and while there will still be other suppliers for various jobs, it just creates that stronger business relationship while adding more certainty that we can give them what they are looking for."           

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