INDUSTRY INTERVIEW: CAE USA
John Lenyo
President and General Manager
CAE USA
Q: Summarize your most recently concluded fiscal year results and discuss your military business forecast for calendar year 2009.
A: Over the past several years, the primary markets for CAE—commercial aviation and defense—have been quite strong, and this has led to excellent financial results for CAE and its shareholders. While the current turmoil in the financial and credit markets does create some uncertainty moving forward, a positive trend is the greater use of simulation throughout the defense systems life cycle. Government and defense forces are using simulation for not only training, but for analysis and operations as well. Simulation offers a number of advantages, most notably cost advantages, that simply cannot be ignored in today’s uncertain economic and threat environment. We fully anticipate that overall defense spending in the United States will face challenges over the next couple years, but there will be opportunities for companies like CAE because of the compelling value proposition of simulation.
Q: CAE recently opened an office in Hampton Roads. How is this effort succeeding and does CAE plan to open any other U.S. field offices in the near future?
A: The Hampton Roads area is home to a number of key U.S. DoD and homeland security organizations, as well as Old Dominion’s Virginia Modeling, Analysis and Simulation Center. CAE has a professional services division that helps clients optimize the use of simulation for analysis, design and experimentation. We wanted a physical presence in the Hampton Roads area because of its focus on modeling and simulation throughout industry, government and academia. We are pleased with the progress to date because it has helped create awareness for CAE and our capabilities. While we have no immediate plans for further expansion in the United States, we are always looking for opportunities to be close to our customer base.
Q: Briefly discuss your leading U.S. military programs.
A: We have grown our business substantially with the U.S. Navy over the past several years. CAE USA is the prime contractor responsible for developing the Navy’s MH-60S and MH-60R helicopter training systems. Under subcontract to Boeing, we are also developing the prototype simulator for the new P-8A Poseidon maritime patrol aircraft. CAE is the leading provider of C-130J Hercules training systems in partnership with Lockheed Martin, and we see excellent prospects for this platform both in the United States and internationally.
Q: Will any CAE visual solution upgrades or new products be made available in the near term for the U.S. military training community?
A: During I/ITSEC 2008, we will be demonstrating a range of new database and visual technologies. For example, the common database (CDB) we originally developed for USSOCOM and the SE Core Database Virtual Environment Development we’re doing for the U.S. Army will highlight our expertise in developing correlated and interoperable databases. Our latest generation CAE Medallion- 6000 image generator features new graphics processors from NVIDIA that enhance realism. We will also showcase something we call motif compositing technology, which automatically generates database content.
Q: Briefly describe CAE’s current support for unmanned aerial systems—what are your strategies for supporting this burgeoning market?
A: The increasing complexity and scope of the UAS mission has placed more challenging demands on UAS operators, and militaries are beginning to rethink earlier ideas on the selection of candidates for UAS operator training. CAE has a range of initiatives related to training for the UAS community, including the air vehicle operator, sensor operator and command staff using the data and intelligence gathered by unmanned systems. We believe training should be focused on the entire UAS “mission team,” so we’ve developed solutions for a comprehensive UAS mission training center. We also have simulation-based UAS solutions for government research and experimentation labs.
Q: Summarize CAE’s efforts to insert training system efficiencies and technologies from civilian aviation programs into military aviation systems.
A: CAE is somewhat unique in that the focus of the entire company is simulation and training. We invest a significant amount on research and development specific to this niche, and there are opportunities to leverage technologies between the civil and military markets. For example, we developed a product called CAE True Environment for the civil market to add automated air traffic control simulation to our civil full-flight simulators. We see the need for this capability in military simulators as well, particularly in transport aircraft simulators. We’ll be demonstrating the CAE True Environment product at I/ ITSEC in a C-130 application.
Q: What else does the future hold for CAE USA?
A: CAE does believe strongly that the future of simulation is very promising. The increased cost of fuel, environmental impacts and significant wear and tear on weapon systems all point to the greater use of simulation and synthetic training. A specific area of focus for CAE USA will be in the services area as an aircrew training system provider. Some do not realize that CAE is a leader in the design, development and operation training schoolhouses. In fact, we own and operate more than 25 civil and military aviation training centers around the world, where we train more than 75,000 aircrews annually. We have all the capabilities of a world-class training systems integrator and aircrew training system provider. ♦
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