Leonardo boss on why investing in defence is extra essential than ever

Clive Higgins, the chief executive and chairman of the defence giant Leonardo UK, faces some of the greatest challenges of his 30-year career. Defence Secretary John Healey last week spoke of the possible cancellation of military contracts, even as the heads of M16 and the CIA warned of the ‘reckless campaign of sabotage’ waged by Russia across Europe.

At the same time, Sir Richard Moore of MI6 and Bill Burns of the CIA said that the UK and the US faced an ‘unprecedented array of threats’, including the ‘resurgent’ danger from the Islamic State.

Two months ago, Healey said the Government would launch ‘a root and branch’ defence review, which is due to announce its findings next summer.

But before that date, Higgins, 46, can expect to learn whether Leonardo will win the contract to replace the RAF’s fleet of ageing Puma helicopters, or whether the programme will be cut back or scrapped.

A fortnight ago, Leonardo which makes Merlin and Wildcat helicopters and is the second largest supplier of defence equipment to the Ministry of Defence after BAE Systems, became the sole bidder.

The competing contractors, Airbus and Lockheed, pulled out, sensing that the costs of building the replacement helicopters could exceed the gains from the project.

Even before the Election, Higgins, who is down to earth, but eloquent, was campaigning to shift opinion on the necessity of investing in defence, combating the ‘woke’ view that it is not ethical.

He speaks from the heart not only on behalf of the company, which he joined as a 16-year-old apprentice, but also in the interest of the security of the realm.

He says: ‘There has been a massive push to invest money in carbon neutral stocks. Which is understandable. But what Ukraine has done is shown that you can’t have some of those things unless you have security of defence.’

After Vladimir Putin’s invasion of Ukraine in February 2022, Europe’s top seven defence companies, including BAE Systems, Leonardo and Saab, have received new orders worth $300 billion (£225 billion).

This was driven by a 7 per cent surge in global spending to a record $2.4 trillion in 2023, the steepest annual rise in 15 years.

‘The invasion has changed the priorities of the investment community and Government. We need to secure ourselves,’ Higgins says.

Nevertheless, he argues that we have been naive compared with some of our allies such as the US.

‘In the US look how it supports its veterans and defence industry. There is national recognition of how important it is,’ he says.

‘I don’t think we have that same level in the UK. Yes, people support the Armed Forces but maybe defence companies are just seen as other businesses. We have spent time working with stakeholders so that people are aware of the value.’

But defence companies and the Government have still had to work hard to convince investors that the sector was something to invest in, despite the big rise in expenditure by governments across the globe.

Higgins says that Labour has been ‘very active, willing to listen and understand – wanting to engage on defence and employment issues’.He is lending his support to the Government’s attempt to forge closer ties with Brussels. The UK administration and the governments of EU states must all work to make defence budgets stretch further.

Leonardo UK is a division of the £10 billion Italian Leonardo group, which is listed on the Milan stock exchange. Roberto Cingolani, chief executive of the group has said that one of the lessons of the invasion of Ukraine is that ‘no country can be on its own’.

Leonardo UK employs 8,500 staff. Its biggest location is Yeovil in Somerset, on the site of what used to be Westland Helicopters.

Think of Somerset and the first thought is likely to be cheddar cheese, rolling hills, cider and Glastonbury. But it is helicopters that are the county’s most high value exports, contributing hundreds of millions of pounds to the local economy every year.

Westland’s history dates back to the world wars, when more than 2,000 Spitfires (and the Naval version, Seafires) were produced.

The company was famously at the centre of row in 1986 between Margaret Thatcher and her Defence Secretary Sir Michael Heseltine, which led to his resignation. Heseltine favoured a European buyout, but Thatcher won out when Westland merged with America’s Sikorsky group.

It then passed through the hands of several owners, ending up with Finmeccanica of Italy, which in 2016 changed its name to Leonardo, after the artist and designer.

Higgins grew up near the factory in Yeovil and could hear the helicopters fly around the town.

‘Every day you would see something flying around, the noise resides across the town,’ he says.

He went to school locally, leaving at 16 and joining Westland Helicopters as a mechanical engineering apprentice. He moved into human resources, before becoming director of government affairs in 2019, and landing the top UK job in 2023.

Higgins clearly loves the cut and thrust of the industry, quipping that it really is all ‘boys toys’.

He’s lean and fit and sporty – a running enthusiast and keen cricketer, bowling medium pace.

Not naturally an early riser, Higgins, who is married with no children, says being based in Yeovil sometimes means waking up at the crack of dawn is inevitable.

‘If I have to get to London then I’m up at 5am for the train – that’s just how it is,’ he says affably.

The company’s biggest projects include providing helicopters for the Polish air force as well as the Global Combat Air Programme, working alongside BAE Systems. This is a initiative led by the UK, Japan and Italy to jointly develop a sixth-generation stealth fighter.

It aims to replace the Eurofighter Typhoon in service with both the Royal Air Force and the Italian Air Force, and the Mitsubishi F-2 in service with the Japan Air Self-Defence Force.

Unveiled in December last year, GCAP is one of the most ambitious military programmes, aimed at expanding each nation’s defence capabilities to address rising threats from Russia and China. It merges Japan’s F-X programme with the UK and Italy’s Tempest project and aims to deliver a supersonic jet in roughly half the time – and at far lower cost.

On own his ambition, Higgins says he’s committed to Leonardo, despite the company’s top brass – Cingolani and chairman Stefano Pontecorvo – residing in Rome.

Higgins spent three years at the firm’s Italian helicopter headquarters in Cascina Costa between 2014 to 2017 – which will have left him in good stead should he wish to climb further up the ladder.

He adds: ‘That experience in Italy puts people in a good position for careers. The north is akin to parts of Germany – it’s one of the most economically profitable parts of Europe – engineering, fashion and pharmaceuticals but the further south you are there are fewer industrial centres.

Higgins has the same faith in the North of England. Leonardo has opened a research site in Newcastle, creating 200 highly skilled jobs. He says: ‘Go to areas in the North-East – there’s a passion, there’s a vibrancy, there’s talent and we’ve got to tap into that.’