It is sometimes said the best defence is a good offence. While that line is most often associated with sports catch-phrases it is also quite apropos in the case of Thales Canada, the enormously successful multi-dimensional defence, avionics and transportation company that designs and builds high-tech electronic systems. The company offers its products and services in markets throughout Canada and around the world and is constantly seeking out new methods of innovation and safety standards to stay ahead of the competition in providing the protection of people, infrastructure and information.
At the core of its business, Thales Canada occupies a preeminent role in providing the optimal solutions for its clients in the creation of a safer world by delivering to them the technological products necessary to perform critical tasks. The protection of people, infrastructure and information requires immense preparation, careful execution and follow up to which the company has earned a stellar reputation.
With origins in France, Thales employs about 61,000 people in 56 countries, 20,000 of whom represent some of the top engineering and research minds in the world. The company has a unique capability of designing, developing and deploying equipment, systems and services that meet the most complex requirements. Thales is one of the leading global providers of sensor technology, including the likes of radar and sonar.
There are two branches to the Canadian history; the first being the naval business through the Canadian government to which the enterprise became involved in more than 30 years ago. The other branch took hold in 2006 with the acquisition of a number of assets from Alcatel, including their transportation division, which had a history dating back to the late 1970s with special funding through the Ontario provincial government of automated transportation activities and their Crown Corporation at the time, the Urban Transportation Development Corporation (UTDC).
With locations in Toronto, Ottawa, Montreal, Quebec City and Vancouver, Thales Canada is a $500 million enterprise with more than 1,350 employees nationwide and is continuing its robust growth pattern. Among Thales Canada’s three business units, transportation accounts for about 50% of the annual business, defence makes up 30% and avionics brings in the other 20%. Canada is home to three of Thales’ Worldwide Centres of Excellence: Business & Regional Jet Flight Control Systems, in Montreal; Optronics, in Montreal; and, Urban Rail Signalling, in Toronto.
The head of the Canadian operations is President and CEO Mark Halinaty, a man who has been with the company for three decades. The Canadian Business Journal had an opportunity to speak with Halinaty and Siegfried Usal, VP Strategy and Communications.
“Our company grew from a handful of people to what is today 900 people based in Toronto, exporting the technology that came out of that around the world,” begins Halinaty.
The multi-faceted high-tech enterprise has enjoyed immense success, but Halinaty, who assumed the lead role in Canada in November 2013, confirms there are certain aspects he wants to continue to evolve and other initiatives he would like to pursue in order to expand potential opportunities under his leadership.
“We’ve been a successful business in a number of domains so I want to continue to grow those, but I also want take the company into other business areas that we haven’t necessarily been involved with in Canada. It would be to broaden our footprint in terms of markets that we address here in Canada,” he reveals.
On an international scale, Thales is primarily involved in defence, space, aerospace, security and transportation. In Canada, the emphasis has focused mostly on defence, avionics and transportation with an abundance of opportunities in those sectors. But Halinaty makes it abundantly clear the Canadian operations fully intend at looking to expand into the more generic areas of security – and others as well – if and when the opportunity arises.
“We certainly want to expand into things like smart cities, which touches on a number of domains,” he remarks. “Space is a question mark; I’m not sure yet if there’s room for us in the Canadian market.”
As an integral player in such enormously complex technologically-driven industries, the necessity for cohesiveness within the Thales Group is essential. Halinaty and his executive team have made a conscious effort to balance defence and civil businesses in order to best mitigate the times when defence spending may hit a downturn. This approach ensures the enterprise is always sporting a healthy stable of projects.
Highly-educated employees with a widespread number of skillsets provides Thales with numerous opportunities to exploit synergies across various platforms while also giving rise to potential new business through expansion of the core competencies that are already in place. In spite of such very high-end technological requirements, Halinaty says there are pronounced synergies across their various platforms that serve to enhance the overall business model.
“There is a lot of commonality in the sense that we do a lot of big project work and systems engineering and critical software development so whether it’s in avionics , defence or transportation, our core skillset is similar across those,” he remarks.
Within the defence industry in Canada, the main client is the federal government. In the transportation sector, whether it’s in Canada or internationally, in most cases the end customer is a government-related agency, but they are often not the direct client.
“We often work with big prime contractors such as an SNC-Lavalin or Bombardier or we work with rolling-stock suppliers,” says Halinaty. “In avionics, we work for aircraft manufacturers such as Bombardier and Gulfstream in the U.S.”
In the transportation sector, Thales Canada is providing the train control system for a major $2.1 billion project in our nation’s capital, known as the Ottawa LRT Confederation Line, which is scheduled for completion by 2017. That particular endeavour is a perfect example of Thales working closely with both government bodies and private-sector enterprises, where the P3 model has been implemented, led by a consortium known as the Rideau Transit Group (RTG). The aforementioned SNC-Lavalin, EllisDon, ACS Infrastructure and Dragados Canada, spearhead that group. Halinaty is extremely proud to have his company be involved in such a ground-breaking transportation project.
“It’s important for us for a number of reasons. First of all, it’s a domestic project but being in Ottawa, it’s where our defence business is centred, which adds to the relevance for us,” he says.
In an operation with the magnitude and scope of Thales Canada there are countless projects always in progress, just finishing or just beginning. But there are a couple in which Halinaty mentions as being quite special in terms of developing new frontiers for the business.
“We just announced recently that we were successful in winning a job in Hong Kong that involves updating a number of (rail) lines in that country. This is a long-term contract that we’ve just been awarded,” remarks Halinaty. “One of the jobs that we’ve just completed is in London, England where we re-signalled the Jubilee and Northern lines for the London Underground. The Underground in London is kind of the reference point for subways and metros around the world. It was very significant for us. The Jubilee line, which was the first one that we did, was in service to support the 2012 Olympics and performed flawlessly in carrying a record numbers of passengers.”
Meanwhile the defence industry has been, and will continue to be, a main pillar for Thales Canada, which is directly involved in the National Shipbuilding Procurement Strategy (NSPS) with the Canadian government, and partnered with Seaspan on the west coast.
“We are currently the electronic system’s integrator for the Coast Guard ships, which right now is the Offshore Fisheries and Science Vessel, as well as the Joint Support Ship for the Canadian navy. We also have our eyes on the Canadian Service Combatant program, which is the upcoming frigate program. We see that naval area as one of our big growth potential areas on the defence side of the business here in Canada,” states Halinaty.
A segment of the projects taken on by the company are standalone here in Canada and at other times there is direct involvement with Thales units in other countries. The ability to tap into those global units provides an immense benefit to the Canadian operations in its quest to grow its own marketplace. The office in Toronto is the corporate Centre of Excellence for urban rail transportation and results in Thales working with multiple countries. Oftentimes there will be a local Thales company involved doing some of the groundwork, while Halinaty’s team supplies the core technologies from Canada.
“We have access to the Thales global portfolio of products, but we’ve built up the capability in Canada to deliver our own services.”
Thales Canada has identified significant international emerging markets in the transportation sector including the likes of Southeast Asia, India, the Middle East and South America, each of whom have experienced noticeable increases in urbanization and money being spent towards necessary infrastructure improvements.
“Although we are active in all those areas right now the potential there is really quite huge,” reflects Halinaty.
Thanks to its excellent history of being the leader in technology in the signalling market with Communication-Based Train Control (CBTC), the resultant successes have opened many doors for Thales Canada on a global scale.
“We started out under a program funded by the Ontario government where we were very much a niche player with a new technology that didn’t exist in the market. Jump ahead 30 years and that technology is now the standard in the market, and although some of our competitors provide that technology, we clearly led the way and drove the market. Our track record speaks for itself.”
From the defence perspective, success in Canada can largely be attributed to the fact the business unit in this country constantly capitalizes on the success of Thales as a global defence company and a leader in sensor technology. The ability to develop on the core competencies of each domain in Canada has allowed the Canadian arm to substantiate and capitalize that much more on the technology aspect. A relatively new Research & Technology facility in Quebec City, with over 40 researchers and engineers, devote their time and effort in that regard.
“We invest $30 million each year in Research and Development just in Canada,” confirms Halinaty. “We started the operation in Quebec City as an offshoot of our defence business. It has done a lot of work with DRDC, which is the R&D branch of the Department of National Defence. We’ve grown that and worked with various academic institutions to expand the scope. More recently we were formally recognized within Thales as a Research & Technology centre. There are just five of those in the world.”
The significance of having a bona fide Research &Technology centre in this country brings about additional funding from the corporation while establishing a well-earned reputation and recognition on an international scale. Siegfried Usal, VP Strategy and Communications, has been instrumental in leading the team in Quebec City.
“Half of the 1,350 people in our organization are engineers, so we are always looking to tap into any new domain of business with that engineer’s mentality,” says Usal. “The centre in Quebec City is running $55 million in projects over the next five years with the support of partners, including 12 universities and four research centres.”
Thales Canada has become adept at capitalizing on expertise in bringing integrated solutions for defence, all of which is developed by the skilled employees of this country. The flexible technology can serve the dual purpose of providing solutions for the defence market and for civil applications.
“We combine that with new technology trusts – big data analytics, cyber security and also cloud computing,” says Usal. “As opposed to big IT companies that are bringing in data and computed solutions, we have an expertise in the field in security and transportation and we combine that enhanced computing technologies and analytics that are available to come up with new value innovation for our customers and non-customers and it’s in that space where we want to create new business.”
Looking to the future
One of the main benefits in the consistent advancement of technology is the synergistic capabilities that allow for multi-purpose applications to be executed. The expectations for branching out further into the security sector are that new companies or entities will emerge who have an interest in security, which potentially is a very broad market for Thales Canada to pursue.
“I see a lot of convergence not only in the markets we are currently in but those we are looking to get into,” says Halinaty. “It’s quite exciting for us because I think it will open up new markets for us as well as present new challenges.”
“It’s the ability of Thales is to provide integrated solutions, because that’s what we’ve been doing for decades in the most stringent environments with the most challenging platforms, such as aircraft, frigates, satellites and urban rail,” Usal adds. “Our challenge moving forward is to better communicate with those new potential customers and design with them solutions to address their requirements.”
The development of new innovative business models with customers is what has been, and is now, expected of Thales, which currently holds about 15,000 patents. There is always encouragement from the executive branch to have engineers file patents, which can generate tremendous commercial value. Both Halinaty and Usal have high expectations for Thales Canada moving forward.
“I would like to see us grow significantly over that time period through a combination of getting into new sectors,” states Halinaty. “In the shorter term I’d like to see us be well established in some of those new markets. I would like to see our existing business in avionics, defence and transportation to continue on the growth path that we’re on.”
Thales Canada is also a strong supporter of charities, including the likes of the United Way and a special program called True Patriot Love, which helps veterans from the Canadian Forces assimilate back into domestic life.
“A new initiative from our group is the Thales Foundation, which started six months ago,” says Usal. “The purpose of the foundation is the development of education and humanitarian actions. In the next few years, there will be regular waves of financing.”
A formal process is also in place whereby the company reviews a number of aspects and set goals that it looks to achieve in terms of environmental protection and educational driven projects. “And I am happy to announce that one of the 13 first worldwide awarded project teams was selected for funding in Canada, an educational project called ‘Bringing Sciences and Technology to all with Microscope’ designed and implemented by PREST organisation”, adds Usal.
Halinaty says Thales Canada views itself as a Canadian company that happens to be part of an international organization that they have capitalized on to the maximum benefit for a strong Canadian presence with an excellent base of domestic and international business projects from which to build from.
“We’ve established ourselves as a true Canadian company with successes in a number of business areas and looking to get into even more areas,” he says.