Leonardo boss Clive Higgins explains why investing in defence is more important than ever

Clive Higgins, the CEO and chairman of defence giant Leonardo UK, is facing one of the biggest challenges of his 30-year career.

Defence Secretary John Healey last week spoke of the possible cancellation of military contracts, while the bosses of MI6 and the CIA warned of Russia’s “reckless campaign of sabotage” across Europe.

At the same time, Sir Richard Moore of MI6 and Bill Burns of the CIA said the UK and US faced an “unprecedented range of threats”, including the “re-emerging” threat from Islamic State.

Two months ago, Healey said the government would launch a full defense investigation, with findings to be made public next summer.

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

Two weeks ago, Leonardo, manufacturer of Merlin and Wildcat helicopters and 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, withdrew because they suspected that the costs of building the replacement helicopters could exceed the project’s revenues.

Even before the election, Higgins, a sober but articulate man, campaigned to change perceptions about the need for defence investment, challenging the ‘woke’ view that it is unethical.

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

He says: ‘There’s been a huge push to put money into carbon neutral equities. That’s understandable. But what Ukraine has done is shown that you can’t have some of those things if you don’t have defensive security.’

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

This was driven by a 7 percent increase in global spending to a record $2.4 trillion in 2023, the strongest annual increase in 15 years.

“The invasion has changed the priorities of the investment community and the government. We need to secure ourselves,” Higgins said.

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

“Look at the US and how it supports its veterans and defense 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 perhaps defence companies are just seen as other companies. We’ve spent time working with stakeholders to make sure people understand the value.’

However, defense companies and governments have still had to work hard to convince investors that it is worth investing in this sector, despite the huge increase in spending by governments around the world.

Higgins says Labour has been “very active, willing to listen and understand – and to engage on defence and jobs issues”. He supports the government’s attempt to forge closer ties with Brussels. The British government and EU governments must all work to stretch defence budgets further.

Leonardo UK is a division of the £10bn Italian Leonardo group, which is listed on the Milan stock exchange. Roberto Cingolani, the group’s chief executive, has said one of the lessons of the invasion of Ukraine is that “no country can stand alone”.

Leonardo UK has 8,500 employees. Its largest site is Yeovil in Somerset, on the site of what was formerly Westland Helicopters.

Think of Somerset and the first thing that probably comes to mind is cheddar cheese, rolling hills, cider and Glastonbury. But it’s helicopters that are the county’s most valuable export, contributing hundreds of millions of pounds to the local economy every year.

Westland’s history goes back to the World Wars, when more than 2,000 Spitfires (and the naval version, the Seafires) were produced.

The company was at the centre of a conflict between Margaret Thatcher and her Defence Secretary Sir Michael Heseltine in 1986, leading to his resignation.

Heseltine favoured a European takeover, but Thatcher won when Westland merged with the American Sikorsky group.

It then had several owners, until it finally ended up with Finmeccanica in Italy. In 2016 it changed its name to Leonardo, after the artist and designer.

Higgins grew up near the factory in Yeovil and could hear the helicopters flying over the town.

“Every day you saw something flying around, the noise was heard all over the city,” he says.

He went to school nearby, left at 16 and joined Westland Helicopters as an apprentice in mechanical engineering. He moved into HR, became director of government affairs in 2019 and was given the best job in the UK in 2023.

Higgins clearly loves the directness of the industry, saying it’s all “boys’ toys” really.

He is slim, fit and athletic, a running enthusiast and a keen cricketer, who bowls at medium pace.

Higgins is not an early riser by nature, but is married with no children. He says that living in Yeovil sometimes means he has to wake up at the crack of dawn.

“If I have to go to London, I get up at 5 in the morning to catch the train. That’s just the way it is,” he says kindly.

The company’s largest projects include supplying helicopters to the Polish Air Force and the Global Combat Air Programme, in partnership with BAE Systems, an initiative led by the UK, Japan and Italy to jointly develop a sixth-generation stealth fighter.

The aim is 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 Japanese Air Force.

GCAP, unveiled last December, is one of the most ambitious military programs, aimed at expanding each country’s defense capabilities to deal with growing threats from Russia and China. It combines Japan’s FX program with the British and Italian Tempest projects and aims to deliver a supersonic jet in about half the time – and at a much lower cost.

Higgins says that despite his ambition, he is loyal to Leonardo, despite the fact that the company’s top executives – Cingolani and chairman Stefano Pontecorvo – live in Rome.

Higgins spent three years working at the company’s Italian helicopter headquarters in Cascina Costa between 2014 and 2017, a position that will serve him well as he seeks to advance.

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

Higgins has the same confidence in the North of England. Leonardo has opened a research site in Newcastle, where 200 highly skilled jobs have been created. He says: ‘Go to areas in the North East – there is passion, there is vibrancy, there is talent and we need to tap into that.’