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New Leonardo boss teases strategy

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ROME — Leonardo is eyeing “giant” joint ventures in Europe, starting with electronics tie-ups, and wants to boost its space alliance with Thales while making “peace” with shipyard Fincantieri, the Italian firm’s CEO has said.

In wide ranging speech to an Italian parliament defense committee, Roberto Cingolani outlined his strategy for the Italian flagship defense firm, five months after taking over the helm from previous CEO Alessandro Profumo.

The 61 year old Italian kicked off by stressing how he has worked to increase Leonardo’s capabilities in cybersecurity and high-powered computing, claiming the focus would reinforce, rather than distract, from the firm’s defense work.

“It’s not just bullets, but bytes,” he said, claiming, “we will defend our core business,” and “traditional defense remains a key pillar,” but adding, “we must broaden our horizons.”

A former chief technology and innovation officer at Leonardo, Cingolani pushed cyber and artificial intelligence programs at Leonardo before he left in 2021 to become a “green transition” minister in the Italian government, only to return to Leonardo as CEO in May.

“Everything has to be cyber safe by design,” he told the defense committee during his presentation on Wednesday, adding the firm was on a “forced march” towards digitalization, with “digital twins” now being created for all products.

Cingolani said Leonardo’s competitors were now not just defense companies, but the likes of Google, Microsoft, Amazon and IBM. “There are companies which didn’t exist. Ten years ago Elon Musk was running PayPal and then ran Tesla. Now we have these kind of competitors,” he said.

Musk’s SpaceX is a defense contractor and satellite communications company.

Cingolani is overseeing the cyber push as Leonardo’s co-general manager Lorenzo Mariani focuses on the firm’s more traditional defense work.

Turning to alliances, Cingolani said Leonardo wanted to play a key role in European industry consolidation.

“We are working on some alliances that should create European hubs in fundamental defense sectors. That means creating entities that are not just Italian, just German or just French, and can compete on level terms with U.S. and China colossuses,” he said.

“We have due diligence and talks with international banks underway to help us understand what to sell and what to buy, and we are mulling some joint venture on a giant scale,” he added.

Cingolani said a likely area for consolidation was electronics.

“However big we, or the French, or the Germans, are in electronics, none of us are big enough to compete with the American or Chinese, and that is why we are mulling aggregation,” he said.

Cingolani said he was calling a halt to tensions that have surfaced in recent years between Leonardo and fellow Italian state controlled firm Fincantieri. Leonardo provides radar, electronics and guns for Fincantieri vessels, but the two firms tussled as Fincantieri expanded into wider defense activities under former CEO Giuseppe Bono.

“Peace has broken out,” said Cingolani. He told the committee that he had agreed with current Fincantieri CEO Pierroberto Folgiero that “we will make things that fly and they will make things that float. It’s not that complicated, with electronics acting as the glue.”

Turning to Leonardo’s space activities, Cingolani quoted reports predicting the space business would be worth a trillion dollars by 2030 and claimed, “The market is crazy,” with “huge margins” for growth in satellites.

The CEO said he was looking to boost the activities of Leonardo’s space alliance with French firm Thales – a tie-up which had become “a bit sleepy” in recent years.

He added he had found a willing partner in Thales CEO Patrice Cain. “If we don’t work together to compete with SpaceX, not to mention the Indian and Chinese governments, we risk disappearing,” he said.

Tom Kington is the Italy correspondent for Defense News.

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