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

Clive Higgins, chief executive and chairman of defence giant Leonardo UK, is facing some 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 heads of M16 and the CIA warned of Russia’s “reckless sabotage campaign” 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 array of threats”, including the “resurgent” threat of Islamic State.

Two months ago, Healey said the government would launch a comprehensive defence review, the results of which would be announced next summer.

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

A fortnight ago, Leonardo, which makes the Merlin and Wildcat helicopters and is the MoD’s second-largest supplier of defence equipment after BAE Systems, became the sole bidder.

Competing contractors Airbus and Lockheed withdrew, realizing that the costs of building replacement helicopters might exceed the project’s profits.

Even before the election, Higgins, who is a no-nonsense but articulate person, was campaigning to change opinion on the need to invest in defence, combating the “woke” view that it is unethical.

He speaks from the heart not only on behalf of the company, which he joined as an apprentice at the age of 16, but also in the interest of the kingdom’s security.

“There’s been a big push to put money into carbon-neutral stocks, which is understandable, but what Ukraine has done is show that you can’t have some of those things unless you have defence security,” he says.

Following 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 $300bn (£225bn).

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

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

However, he argues that we have been naive compared to some of our allies, such as the United States.

“In the United States, you just have to look at the way veterans and the defense industry are supported. There is a national recognition of how important this is,” he says.

“I don’t think we have that level of support in the UK. Yes, people support the armed forces, but perhaps defence companies are seen as just other businesses. We’ve spent time working with stakeholders to make people aware of the value.”

But defence companies and governments have still had to work hard to convince investors that the sector was a place to invest, despite a huge increase in spending by governments around the world.

Higgins says Labour has been “very active, willing to listen and understand, willing to engage on defence and employment issues”. He supports the government’s attempt to forge closer ties with Brussels. The UK administration and EU state governments must work together to make defence budgets work harder.

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

Leonardo UK employs 8,500 people. Its largest headquarters is in Yeovil, Somerset, on the site of what used to be Westland Helicopters.

Think of Somerset and you might first think of cheddar cheese, rolling hills, cider and Glastonbury. But helicopters are the county’s highest-value export, contributing hundreds of millions of pounds to the local economy every year.

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

The company was at the centre of a dispute in 1986 between Margaret Thatcher and her Defence Secretary Sir Michael Heseltine, which led to the latter’s resignation. Heseltine was in favour of a European takeover, but Thatcher won out when Westland merged with the US group Sikorsky.

It then passed through the hands of several owners until it reached Finmeccanica of Italy, which in 2016 changed its name to Leonardo, in honour of the artist and designer.

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

“Every day you saw something flying everywhere and the noise spread throughout the city,” he says.

He attended the local school, leaving at 16 and joining Westland Helicopters as a mechanical engineering apprentice. He moved into HR, before becoming Government Affairs Director in 2019 and landing the top job in the UK in 2023.

Higgins clearly loves the push and pull of the industry, joking that they are all really “boy’s toys.”

He is slim, fit and sporty: he is a keen runner and an avid cricketer who bowls at medium pace.

Higgins, who is married with no children and not a morning person by nature, says living in Yeovil sometimes means waking up at the crack of dawn is inevitable.

“If I have to go to London, I get up at five in the morning to catch the train. That’s how it is,” he says affably.

Among the company’s most important projects are the supply of helicopters for the Polish Air Force, as well as the Global Combat Air Programme, in collaboration with BAE Systems, an initiative led by the United Kingdom, Japan and Italy to jointly develop a sixth-generation stealth fighter.

It is intended 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-Defense Force.

The GCAP, unveiled in December last year, is one of the most ambitious military programs, aimed at expanding each nation’s defense capabilities to meet growing threats from Russia and China. It merges Japan’s FX program with the UK and Italy’s Tempest project and aims to build a supersonic aircraft in about half the time and at a much lower cost.

On his ambition, Higgins says he is committed to Leonardo, even though the company’s top executives – Cingolani and chairman Stefano Pontecorvo – reside in Rome.

Higgins spent three years at the company’s helicopter headquarters in Cascina Costa, Italy, between 2014 and 2017, which will have left him well placed if he wants to move further up the ranks.

He adds: “That experience in Italy puts people in a good position to develop their professional careers. The north is similar to some parts of Germany, it is one of the most economically profitable areas in Europe: engineering, fashion and pharmaceuticals, but the further south you are, the fewer industrial centres there are.

Higgins has the same faith in the north of England. Leonardo has opened a research centre in Newcastle, which has created 200 highly-skilled jobs. “You have to go to the north-east areas: there is passion, there is dynamism, there is talent and we have to take advantage of it,” he says.