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CDR Editor-in-Chief, Peter Kitchen, recently caught up with this defence industry veteran and asked him about a number of issues of importance to his company and, through his position as Chair of CADSI, Canada's defence & security industry. Here is that conversation.

CDR: Danny, it's good to talk to you again this year. As you recall, back in 2016 CDR named GDLS-C Canada's top defence company for its on-going support of Canada's military, its success in the export market, its innovative product development et al, and it seems you've pretty much been on a roll since then. Can you please give us an update on what's been going on at the company lately?

DD: We have been moving in a number of areas domestically and internationally. We are executing our large international contract with the CCC (Canadian Commercial Corporation), which is well underway.

Here at home we are focused on executing our most recent Canadian contracts, which include the LAV Reconnaissance Surveillance Suite (LRSS) Upgrade Contract and the follow on LAV UP contract for 141 vehicles received in February of 2017.

What is also very exciting is the increasing emphasis we are putting on research and development. We have always taken great pride in staying ahead of technological advancements and as the pace of change in relation to technology increases, so do our innovation efforts, so we can maintain our position in a fast-paced highly competitive market. We are working with several Canadian Universities, as well as with DRDC on a number of projects.

CDR: About a year ago, GDLS-C won a $404 million contract to upgrade Canada's LAV Ills. Can you give us an update on how that project is progressing? DD: Execution on this latest contract award to upgrade Canada's LAV Ills is progressing well with vehicle deliveries to the customer starting this past November.


CDR: What is the status of the LAV 6.0, what do you expect its role will be in the CAF and what new capabilities will it bring?

DD: The Canadian Army Commander can better address the employment of LAV 6.0s. However, what I can tell you is that we still fully expect it to be the backbone of the Canadian Army's armoured fleet, and that it has improved technologies in a number of key areas. It ensures the agility and high mobility for which the LAV platform is known and adds a high degree of protection and increased lethality.

CDR: We've recently seen a reference to a LAV 700 and it was showcased at IDEX this year. Can you tell us what that product is about? Is it essentially a LAV 6.0 for the export market?

DD: There has been a demand from international customers for vehicles with different payload and capability profiles. Responding to that need we launched the LAV 700 at IDEX in February of last year. With a larger payload and higher protection, it gives GDLS-Canada a full suite of LAV products from the LAV II (~350hp, C130 transportable and amphibious capability) up to the LAV 700 (over 700hp, and highly protected).

CDR: When CDR profiled GDLS-C back in 2016, one of the things that really caught our attention was the company's sense of national pride and the company's "Canadian without compromise" motto, but we know that defence is a global business and to be successful you need to compete and win in the export market, so can you please tell us about some of your more important international business currently?

DD: The relationship between our domestic business and our export business is inextricably connected. The direct and indirect economic impact GDLS-Canada makes on our country is significant, recently, over $4 billion annually. Currently, over 90% of that economic benefit comes from exports. When we contract with Canada or export, our over 500 Canadian suppliers directly benefit and this sustains over 20% of Canada's defence industry.

Having said that, our home customer is extremely important to us. When Canada buys our product and then deploys our vehicles in very demanding missions, we bring that important credibility to bear in the export market. As we explore markets in Latin America, for example, it is important for these customers and potential customers to know how Canada has employed these vehicles in the full spectrum of operations, from floods and forest fires, to peacekeeping operations, to major conflict zones like Afghanistan.


CDR: Can you please remind us about what GDLS-C is doing in the US market?

DD: GDLS-Canada focuses primarily on Canadian and international markets. We are part of an integrated capability for General Dynamics Land Systems Stryker Program and US Marine Corps LAV programs.

CDR: Speaking of the US market, we have been hearing protectionist rumblings from the current administration there, but putting on your hat as CADSI Chair, to what degree is Canada protected by the Defence Production Sharing Agreement and does that bilateral agreement need updating?

DD: Canada and the United States have a longstanding defence partnership that dates back to the Second World War and is rooted in both our Defence Production Sharing Arrangement, and in our Defence Development Sharing Program. The origins of this partnership are based on our joint responsibility for the defence of North America.

A common defence industrial base is an integral and essential element of this common approach to the defence of North America. Due to the strategic nature of defence material - be it security of supply or independence of action - you cannot have effective common defence without a common industrial base.

This longstanding partnership works well for both countries, fostering a more integrated, innovative and competitive defence industry overall, while at the same time generating significant economic return for Canada.

CDR: While you have your CADSI hat on, can you please tell us what you think some of the more important issues are that Canada needs to deal with on the defence front?

DD: The Defence Minister recently laid out Canada's defence policy - Strong, Secure, Engaged - which outlines many important initiatives. So, the implementation of that policy will be important to the Canadian Armed Forces, and also to Canada's defence industry.

One of the priorities stated in that policy is "Long-Term Investments to Enhance the Canadian Armed Forces' Capabilities and Capacity to Support Peace and Security." Making this a reality will mean ensuring efficient procurements in order to sustain the needs of the CAF to ensure they have the highest quality, most technologically advanced equipment.

To implement Strong, Secure, Engaged effectively, from an industry perspective, some institutional focus is required to enable necessary co-ordination among departments to reach the government's overall goal of an innovative defence sector as a stated domestic priority of Strong, Secure, Engaged. This can be done with the very top of government playing a key strategic oversight role, helping to ensure co-operation among departments, defining what an "innovative defence sector" actually means, and developing a game plan, in co-operation with industry, to get us there as a nation. We are encouraged by the Government's willingness to listen and implement the necessary initiatives to make this happen.


CDR: Still from a CADSI perspective, is the Canadian government doing a good enough job of supporting Canada's defence and aerospace industry in international markets and are there specific areas where you would like to see improvement?

DD: Minister Bains and Minister Sajjan both have attended CANSEC, which has been very positive for the industry. Recently Minister Garneau, Minister Bains and Minister Champagne led a trade mission to India, along with the Canadian Commercial Corporation, in which we participated. These kinds of initiatives are positive signs that the Canadian Government is embracing international defence sales as part of its overall trade policy.

We are optimistic that the Government will take further steps to test and purchase what Canada's defence industry creates and then promote those products that they rely on to the rest of the world. In the highly competitive and protected defence market internationally, championing Canadian firms and suppliers with the highest levels of economic diplomacy is extremely important.

CDR: We know that GDLS-C has had some success in Peru lately, can you give us some details on that program?

DD: We have executed a very successful program for the Peruvian Naval Infantry. We delivered 32 LAV lls - a lighter amphibious vehicle. Those vehicles were recently used in the rescue of hundreds of people affected by the flood in Peru. We understand the Peruvian Naval Infantry regard this as a very successful program.

CDR: What other opportunities do you see in the South American market?

DD: We believe there are more opportunities in Columbia and Peru, and we continue to explore that potential. Additionally, we believe there are opportunities in other South American countries. We look forward to letting you know when we realize further success in these markets.

CDR: What are you doing in Australia?

DD: In Australia, General Dynamics Land Systems-Canada is directly supporting our Australian operations with respect to future program requirements, namely, a tracked medium weight vehicle for LAND 400 Phase 3.


CDR: And, in New Zealand...?

DD: The LAV III is in service with the NZDF and GDLS-Canada is grateful for this strong, almost twenty-year relationship. We continue to support that fleet and work closely with the customer to ensure its operational capability into the future.

CDR: We know you are under some restrictions but what are you able to tell us about your big multi billion-dollar contract win in the Middle East?

DD: Production for our major international contract with the Canadian Commercial Corporation is well underway. Together with suppliers from across the country and globally we are building product, and the program is progressing well.

CDR: Getting back to Canada, DND will be looking at upgrading its truck fleet soon through the LVM program and we know that GDLS-C has had a relationship with Oshkosh in the past. What interest do you have in participating in this program and what can GDLS-C bring to the table for a truck program like this?

DD: Yes, we have an interest in participating, and have a great deal to offer a potential partner. We won't get into any specifics, but GDLS-Canada has a substantial domestic supply chain and sustainment experience with our Canadian customer.


CDR: At the recent Best Defence conference and trade show in London, Ontario we noted a growing number of SME type suppliers in the region. How important is GDLS-C to Southern Ontario economically? Canada overall?

DD: GDLS-Canada makes up 20% of the defence industry in Canada. The fact that we operate out of London is significant for our community. We represent about 10% of the London economy, and our presence supports the established South Western Ontario Defence cluster. What we do here locally supports hundreds of Canadian suppliers, so all regions benefit. In fact, in London alone we have over 240 suppliers, and our supply chain spend in Ontario is about $450 million dollars annually. When we add in the remaining 250 suppliers we have across Canada, you see tremendous pan-Canadian economic impact.

CDR: We know GDLS-C employs a large number of highly trained and well-paid engineers, but how important is R & D to the company and what kinds of things are you working on?

DD: R&D is extremely important to us. Investing in research and development has always been a high priority for us because it not only ensures that we keep on top of global technological advancements, but that we support and encourage Canadian innovation and ingenuity so that we can stay ahead of industry trends. For example, what is always top of mind is how the future will look in relation to the current focus on autonomous systems, how we can make our product more relevant in multi-domain environments, and how we transfer new technology into the platform. Cyber is another area of focus and concern, with more of the vehicle being digitally dependent.

In addition, we're participating in a proposal response to the ISED Innovation Supercluster Initiative for advanced manufacturing in the South Western Ontario corridor, and we're developing responses anticipating the DND's IDEAS initiative.

CDR: At last year's CANSEC show you had a LAV 6.0 ambulance on display, what are your plans for this type of utility vehicle in Canada and elsewhere?

DD: The LAV 6.0 forms the backbone of the Canadian Army's modernized armoured combat vehicle fleet. The Ambulance and Maintenance and Recovery variants are the latest in the GDLS-Canada development of LAV 6.0 capability. The LAV 6.0 - Ambulance allows medical personnel to conduct primary first aid and emergency life-saving medical procedures under protection during transit. So, it is uniquely designed to help save soldiers' lives.

The LAV 6.0 Maintenance and Recovery variant provides solutions that offer highly protected mobile recovery, repair and maintenance capabilities. We expect these two variants will fulfill increased mission needs.


CDR: The LAV III has become an icon in the Canadian military and to mark the passing of a generation of capability, GDLS-C embarked on a program to donate retired LAV III hulls. Can you tell us what that initiative is about?

DD: This was a program spearheaded by Canada Company. GDLS-Canada supported Canada Company by providing the procedures necessary to ensure that the vehicles could be appropriately de-militarized. These monuments are an important way to remember Canada's contributions to Afghanistan.

CDR: What's in the future for GDLS-C Canada?

DD: We will continue to expand our customer relationships by anticipating their capability needs and delivering innovative platform solutions that meet those needs.

In addition to this, we will continue to expand our research and development activities and increase our partnerships with academic institutions and the scientific community. Our company is an innovation engine for the defence industry in Canada, and we are future focused on the Government's Strong, Secure, Engaged initiative by bringing comprehensive solutions to our customer's toughest problems.

We will continue to support the Canadian Armed Forces in future missions and we look forward to maintaining our robust export business, and to capturing additional global sales as we look at opportunities in Latin America, and the Middle East. We will continue to encourage the development of new technologies and innovations by pushing Canadian ingenuity to its furthest limits.

We are committed to showing clear and strong leadership within our community to better the lives of those around us.

Finally, we will ensure that the men and women who serve in our military, and those of our allies, are at the centre of everything we do.

CDR: Thank you.

Photo: Supporting Canada's military with vehicles like LAV III
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Title Annotation:CDR ONE-ON-ONE
Author:Kitchen, Peter
Publication:Canadian Defence Review
Article Type:Interview
Geographic Code:1CANA
Date:Apr 1, 2018

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