In November, Rosemary J. Chapdelaine took over the helm as president and general manager of Lockheed Martin Canada. A former director of business development for the company’s Mission Systems & Training business in the United States, she has held management positions in both the U.S. and United Kingdom, including as director of the MH-60 maritime helicopter production program. She spoke with Vanguard about immediate priorities and growth opportunities.
What is top of your agenda as you step into this job?
The number one priority is the Halifax-class modernization program. That’s the biggest contract that we have at Lockheed Martin Canada, working with SEASPAN and Irving Shipbuilding as well as the DND navy team. We’re focused on meeting the milestones and delivering the commitments.
Are you facing any particular challenges in meeting those at the moment?
The challenges are the typical challenges for the type of program, the fact that the Halifax-class modernization involves a lot of refit activity. Planning the refit depends on the state of the ship when it comes in – sometimes you don’t know the exact state it is going to be in which can make it difficult to prepare for the upgrades and stay within the timelines. My perception in the short time that I’ve been here is that the team has learned a lot and I think we are going to see a lot of efficiencies come from that. But the challenges are still in front of us.
Are you approaching the CEO role with a specific strategy?
Lockheed Martin Canada has been here for a while and has a diverse portfolio of capabilities and programs. I’m inheriting an sound business plan and strategy. As we look forward at some of the changing dynamics of the environment across Canada or internationally, there will always be changes that you have to be prepared for, whether its customer budgets or new opportunities for which we might have to adjust our pre-existing strategy. I’m going to spend some time understanding the business as well as some of the strengths and products that we have and probably modify as it seems fit.
Your biography mentioned experience with contract performance. Have you had any previous experience with the Canadian procurement system?
I’ve worked in the United Kingdom as well as the U.S., so I have dealt with the MoD and the DoD, primarily on navy and some air force programs. I have to say that the introduction into Canada has been wonderful. I’ve attended integrated production team meetings, sponsors meetings, a working group with industry partners and members of Parliament, and the open environment, the open conversations are very positive.
Does the economic downturn in the U.S. affect your Canadian strategy in any way?
We’re a separate Canadian company so the downturn in the U.S. doesn’t directly affect any of our programs here. We’re not dependent on export sales to the U.S. And even the larger global downturn doesn’t really impact us. Our mandate is to serve the Canadian Forces, and we’re in a strong position looking forward.
Are there specific growth areas you are considering, either in the defence sector or elsewhere?
Lockheed Martin as a corporation is looking at areas for growth in general. And Lockheed Martin Canada would participate in that philosophy. So there is definitely growth, whether it is growing our existing base or going into some adjacent markets. I don’t have any specifics but there are some initiatives that we might be seeing in the near future. As well, I hope to work with our team to get their ideas on where we might be able to expand. Growth is definitely in the vision, within the current business that we are doing as well as in adjacent areas.
You have a strong presence within the Canadian Forces Health Services infrastructure. Is there a commercial role for that capability?
I would absolutely love to do that. The Canadian Forces Health Information System is, I think, a great starting point for an infrastructure and whether we can replicate it into other areas of health or expand the existing Canadian Forces piece to pick up more modules, that is a perfect area to look for growth opportunities. It would be dependent on the customer, what their vision is, scalability of solutions and working with other partners.
Is cyber a growth area in Canada, especially as the federal government expands its needs? In the U.S. you have created the NexGen Cyber Innovation and Technology Center.
Cyber space and cyber security are definitely areas of concern. I can’t speak specifically about Lockheed Martin Canada yet but we have expertise within the corporation here in Canada on IT solutions. So I believe that is an area that Lockheed Martin would be very interested in as well. We’re looking at other government opportunities beyond DND, looking at what the RCMP might be up to, Fisheries and Oceans, etc. One of our goals is working collaboratively within the Lockheed Martin team. We have one division in the U.S., Integrated Services and Government Systems, and I think if IS&GS had some turnkey or modified solutions, we would look to partner with them where it makes sense.
As a company, do you aim to do more of your business through partnership or acquisition?
It’s going to be a mix. As a corporation, we have roles as both a prime contractor or subcontractor – we really have the breadth. So I think it depends on the opportunity and where our strengths and our partner’s strengths lie. Acquisition is one area of expansion that is always under consideration.
There has been a lot more emphasis recently on the need for innovation. Where does R&D fit within your Canadian strategy?
As part of our standard business model, we do investments in R&D and we do it annually. I don’t have the specifics on our R&D plan for next year. We’re able to exploit much of the R&D we do in the U.S. We’ve also invested in Dalhousie, the University of New Brunswick and other schools across the country in a variety of disciplines from aerospace engineering to systems engineering and biomass. We also set up a research chair at the University of Cape Breton in 2011 looking at renewable energies.
Is green technology a key part of that plan?
We are actively looking to extend markets, particularly in the North with communities that may want to go off the grid. We’d probably seek to do it in partnership with a company that provides smart grid services. It’s certainly an adjacent market for us.
Speaking of technology, will there come a point when you are able to leverage the information integration or data fusion experience you are gaining on the F-35 program and apply it to your naval programs?
We are leveraging the programs we have been doing historically like the air force command and control information system, the joint forces system, that sort of thing, to other incremental programs. Bridging it to a program like the F-35 may be an ideal, but it is not in the immediate plans.
Given the importance of modelling and simulation in training, are you building those training systems into your programs from the start?
Absolutely. The training systems are a large component of the Halifax-class modernization program. Our building in Halifax is primarily an integrated classroom. It is a land-based test site where all the systems are integrated and groomed prior to going down to the ship. But it also has two or three large synthetic training environments where we can bring entire crews or individuals. We can replicate all kinds of weird and wonderful scenarios. We can set a lot of the parameters – location such as the South China Sea at noon on a Saturday in January, for example – or replicate sea states. It’s great training and obviously cost-effective.
The way the training system is set up is also quite modular, so if you put in new upgrades to a ship it is pretty easy to do the training system upgrade almost in parallel to the actual delivery of the product – you don’t have to wait six months to train the crew on a new capability. I think with what we are doing in Halifax, it is definitely an area for potential expansion.
Is there one major trend you’ll be monitoring in 2013?
For us it’s the National Shipbuilding Procurement Strategy and continued progress and execution on Halifax-class modernization. The government announced the NSPS about 14 months ago and we have not seen much as of yet. They do seem to have some momentum in terms of engaging industry and setting in place the frameworks for contractual arrangements, so 2013 we would expect to be in getting down to writing documents in support of the Canadian Surface Combatant and hopefully moving toward a contract on the Arctic Offshore Patrol. Unlike some markets we look at internationally, Canada seems to have a fair bit of momentum and hopefully in 2013 we move toward the contracts.