Pete Bitar, a speaker at the marcus evans Aerospace & Defense Manufacturing Summit 2010, addresses some of the concerns shared by senior manufacturing executives in the aerospace and defense industry across the United States and Canada today.
Interview with: Pete Bitar, President and Chief Executive Officer, Xtreme Alternative Defense Systems (XADS)
Miami, FL, February 3, 2010 – FOR IMMEDIATE RELEASE
With no large-scale conflicts on the horizon, defense manufacturing executives may need to re-evaluate their focus on solely producing for the defense market. According to Pete Bitar, President and CEO of Xtreme Alternative Defense Systems, diversification is the key to survival. A speaker at the marcus evans Aerospace & Defense Manufacturing Summit 2010, taking place in Florida, February 10-12, Pete Bitar shares his thoughts on industry challenges and his outlook for the future of the aerospace and defense manufacturing industry.
What are some of the challenges experienced by senior manufacturing executives in the aerospace and defence industry? What strategies would you recommend to overcome these issues?
Pete Bitar: One of the biggest issues right now is uncertainty in terms of customer demand. The U.S. government is uncertain of the future with Iraq and Afghanistan, and whether there will be an eventual conflict with Iran. Therefore, the defense industry does not know what level of production capability it needs to maintain. Should they lay off employees or hire more? They cannot hire people unless there are contracts to justify it, and when you scale back on a program, you lose both talent and capacity. If the client changes their mind and needs more of your product, there is going to be a lag between the time the order was placed and when you have the capacity to deliver that order. It is very hard to predict the defense priorities in each industry – program managers cannot tell how the next policy decisions will affect their plans.
For nearly a year now, we have been talking to the army about an Improvised Explosive Device (IED) technology that they had been very interested in. But when the forces moved from Afghanistan to Iraq, all the development funding got pulled away. We essentially had to wait ten months before we could even discuss the contract again which is devastating for a small company. To mitigate that, we have looked at other markets to enter. One of the potential markets for our technologies is counter piracy applications for the maritime industry and counter mine capabilities for de-mining companies. We are beginning to make inroads into those markets, where our products are sold to post conflict clean-up organizations rather than directly to the U.S. military.
What long-term strategies would you recommend to senior manufacturing executives within the industry?
Pete Bitar: Diversifying, finding the people that are multi-talented in your organization that can do a variety of things is the key to surviving. We have been able to diversify enough that we are looking at many different pots of money to draw from and different markets to enter into. This is a good time to move away from overly focusing on one particular specialty and diversifying broadly, to capture a larger number of markets and offer your capabilities to different customers outside of the defense department. Defense companies are defense companies – I am not suggesting that defense departments become one of your five top customers representing only 20 per cent of your business. That is not going to happen. If you can take your defense dependency from 95 per cent down to 75 per cent, then if there is a cutback in defense spending you can absorb that cutback; diversification is the key.
My long-term goal is to capture some of the market niches that we are in right now. We have a unique technology package and intend to be the first to market many of them. We aim to grow our solutions within these niches as they are increasingly becoming a problem. Whenever you have a solution for a problem, you become essential and indispensible, which is where I would like our company to be.
What are your thoughts on re-using old equipment in the manufacturing process?
Pete Bitar: In this crisis, the large companies are laying people off or shutting down facilities and putting their equipment up for auction. This has been very beneficial for small businesses. At auction, you can pick up equipment for pennies on the dollar that can be rehabilitated for pennies on the dollar. You can end up with a capability, in terms of equipment, one tenth of the cost of buying them new. This allows smaller companies to spend less money on equipment, and afford the talent to take on a particular capability. But you have to be ready to buy something when it is up for sale, and be at the right place at the right time. There is some difficulty with that, however, the opportunities are definitely there. This is not just for defense equipment, but also for manufacturing tools that are also used by other industries. If you can capitalize on these capabilities, you can save a lot of money and continue to thrive and grow.
What initiatives or new technologies are we going to see in the future that could transform the industry?
Pete Bitar: There are very promising technologies with transformative ability, particularly in the area of material science. Medical technology is also another area I see taking some leaps and bouncing forward – I know that does not necessarily relate directly to the defense industry, but more and more science has been focusing on the soldier as a human being. The investment into different healing technologies will help diversify companies that focus on the soldier. This is also related to chemical and biological warfare – the technologies learned there will have medical applications in other fields, helping companies diversify. There will be a cross over between the medical technologies industry and the defense industry.
One of the things to continue considering is the role of militaries. I think we are moving away from large force-on-force conflict. If we believe that another world war will not take place, we will need fewer nuclear submarines, strategic bombers and large battle tanks and more equipment to arm the individual soldier, small squad, deal with IED, with individual soldier health and ability to recover from injury. Soldiers will generally be in a peaceful environment dealing with a potentially hostile force. Individual tools versus large-scale army tools change the nature of how you arm for conflict and all the manufacturing support that goes with it.
Contact: Sarin Kouyoumdjian-Gurunlian, Press Manager, marcus evans, Summits Division
Tel: + 357 22 849 313
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About the Aerospace & Defense Manufacturing Summit 2010
This unique forum will take place at the Doral Golf Resort & Spa, Miami, Florida, February 10-12, 2010. Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The summit includes presentations on the F-35 Global Production System, combating counterfeit products, production optimization and the greening of aerospace and defense manufacturing.
For more information please send an email to [email protected] or visit the event website at http://www.aerospacedefensesummit.com/PeteBitarInterview
Please note that the summit is a closed business event and the number of participants strictly limited.
About marcus evans Summits
marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-on-one business meetings. For more information, please visit http://www.marcusevans.com
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