"For a European defense companies must unite"

Jesús Sánchez Bargos has been managing the Spanish division of the French multinational Thales for eleven years.

Oliver Thansan
Oliver Thansan
20 April 2024 Saturday 17:13
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"For a European defense companies must unite"

Jesús Sánchez Bargos has been managing the Spanish division of the French multinational Thales for eleven years. With a workforce of 1,800 workers that will remain at 1,100 this year after the total sale of the transport area to Hitachi. The aim is to focus on the defense business. The company closed 2023 with an order book of 300 million. Its roadmap involves implementing synergies in the sector to move towards true defense in Europe.

What is Thales and where is it headed?

It is the European technological leader, both in defense and in digital security, which has a very clear strategy: to use its capabilities to reuse them in the civil and military spheres. After the covid, we have seen a growth in the aerospace area and the aeronautical area. We are now developing products with the coming decades in mind.

How was 2023 in Spain?

We consider ourselves a Spanish multinational because from here we export to other countries with products and technology made in Spain, based on the Thales portfolio. We are promoting the defense area, purchases of companies have been made and the transport part has been sold. In the end, we have a catalog of capabilities and solutions that gives us an advantage in the national market. We are in a relevant and attractive position.

What are your main military projects?

We are a very relevant actor in everything related to command and control systems and tactical communications. It is the main bet in Spain and customers consider us a benchmark. Now we try to have more customers and evolve in the solutions. For example, we are the supplier of PR4G radios and we are perfecting them. We try to position ourselves as a technological partner of reference for Spanish companies. We have signed a contract with India, in collaboration with Oesia. How do we make the best use of the financial resources we have? Not all European countries can develop all technologies from scratch because they would need unlimited budgets. What can Thales offer? Interoperability

More deals between companies?

If we want to go towards a European defence, we need to reach agreements and unions between companies. Thales can complement the national industry to be able to have national products with the required sovereignty. This is the goal and we are working on this in defense.

What is the situation of the European defense industry?

You have to think in European terms. Here there is a consensus in the companies to unite. How and when do we get there? This is the most controversial point and there can be different opinions. It is good to know where we come from, that is to say, from a stage in which investments were very limited and this has conditioned the ability to develop joint systems. Now we are in a different situation. But how dependent is Europe on purchases of non-European products? We buy approximately 80% outside Europe. Point one: you need to invest in your own developments. Point two: we continue to buy products from countries that are outside of Europe, but we buy from countries that are at least part of NATO. I think this deserves some thought. Does it make sense to keep buying products that you don't have in your country? Yes, because you don't have them. But at least buy them in Europe. That's what worries me, because we continue to see purchases where really someone should be asking the question: what was bought outside of Europe and outside of NATO, couldn't it have been bought in Europe even if it costs a little more? I am concerned that the short-term strategy is not consistent with the long-term one.

Do you see jealousy between companies and countries?

I think it is seen in all countries. At heart we are Europeans, but first we are nationals. So if I can have it on a national scale, I'd rather have it before on a European scale. Why should I entrust my security to another country in Europe? This is where the paradigm shift is. We must trust what we have built together, which is Europe. We trust that we defend ourselves together.

What synergies does Thales have with Spanish companies?

We have quite a varied format. In defence, we started with a business alliance with Amper. We have established joint ventures, with Navantia and the sonars of the F110 frigates. Also with Indra. Thales is a technology partner in these companies. We continue to have Thales Alenia Space, shared with Leonardo. We have a model of flexibility to adapt to the context and local requirements. We are collaborating with Telefónica for a new command and control system for the Land Army. We are flexible. We bring knowledge and that is very good for local industry and national capabilities. For me, this means achieving a level of excellence in the model that gives a lot of added value.

Will they acquire more assets in Spain?

In defense, we have the main capabilities. We want to grow in digital security because it is a business that is increasing at a significant rate. We have invested a lot in cyber security and want to position ourselves as one of the main players on a global scale. In Spain, we bought S21sec and Gemalto. Yes, everything that has to do with this field can be of interest to Thales.

Also Minsait, of Indra?

It is not a goal for now for Thales.

They work with the main Spanish banks.

In Barcelona we have a credit card personalization center. We work with CaixaBank, Santander and BBVA. We also work on everything to do with digital banking, we supply cyber security services for banks. For us, it is an important sector.

Do you have labor problems?

It's a widespread problem. The time it takes to get and recruit high value people is increasing, probably because the demand is greater than the supply and there is currently a war for talent in all European countries. Spain is no exception.

What would happen to the defense industry if there is a change of government in the United States in November?

I don't think it is the best way to evaluate this issue, but everyone feels a certain uncertainty and a certain concern in case someone arrives who can set new requirements for the NATO countries.