In April of this year, John Pranzatelli elevated to the president role at MBDA Inc. – the U.S. arm of the European missile technology firm – close to three years after joining the firm as vice president of strategy and business operations.
The more-than-30-year government contracting veteran previously served as VP for finance and business management at Northrop Grumman after serving as VP for finance and controller of Northrop’s Electronic Systems unit.
In this conversation with ExecutiveBiz, Pranzatelli discussed importing international solutions in a tough budget environment, the future of competition in GovCon and how asymmetric threats will drive procurement.
ExecutiveBiz: What are your responsibilities in your role as president?
John Pranzatelli: I thought it might be good to give a little bit of background on MBDA, Inc., and then talk about what I've been doing as president. MBDA, Inc., is the U.S. branch, serving the U.S. Department of Defense, of a European missile technology company.
We have affiliates in several European countries and we have access to a very broad array of relevant technology. One of the things I’ve tried to do since joining the company is to find the right balance between our technology base and the U.S. military’s mission needs. And we’ve made a lot of progress, myself and others, since opening the Washington office about four years ago.
A lot of progress in that four“‘year time frame in developing those connections and understanding where we can fit. So, really, I think the challenge for me now in my new role is to implement and execute on those opportunities.
ExecutiveBiz: How are you working to keep growing your company in the U.S. market in the uncertain budget environment?
John Pranzatelli: We think the budget situation, actually, while it’s very disruptive, also creates some opportunities. I believe the U.S. military can really benefit in times of tighter budgets by taking advantage of the technologies that have already been developed by some of our closest allies.
So let me give you just one example. Our British affiliate has a missile called Brimstone that really sets the standard for precision and for low collateral damage. I think we will see that missile in U.S. service in the not“‘too“‘distant future. So it’s a great opportunity for us in the U.S. to benefit from Great Britain’s investment and to upgrade our own military capability quickly.
Now that kind of example aside, though, it’s also true that sequestration and the very protracted budget cycles that result from the current situation in the U.S. will really erode our country’s military capability. So, yes, from an industry perspective, those delays and decision“‘making and funding descriptions are frustrating. But, frankly, I think that’s a side issue, compared to what we’re doing to our own military capability.
ExecutiveBiz: What regulatory issues would need to be addressed for the U.S. military to adopt the Brimstone?
John Pranzatelli: Well, there are a couple aspects of that. One, MBDA, Inc., is a U.S. company operating under a special security agreement with the U.S. Department of Defense. And we have an American majority board of directors. So we’ve got strong firewall arrangements between us and our foreign affiliates.
In the case of our the British affiliate, they also have a set of regulatory requirements around exporting their missile to any other country, including the U.S. So on both sides of the Atlantic, we have to go through and make sure we’re completely compliant with our respective regulations.
We’ve actually done that now for a couple of different systems and products, and we really know how to do it pretty well. And for Brimstone, in particular, we’re very far down that path. But there are security regulations. There’s import/export regulations. There’s handling of classified material or information, if that’s required. So there are three or four different areas where we really have to be completely compliant and expert in what we’re doing.
ExecutiveBiz: It sounds like the company has smoothed out the transition process. Are there any other technologies coming from Europe to the United States that you wanted to highlight that MBDA is working with?
John Pranzatelli: Well, MBDA group has 45 different missile systems. These include all the legacy systems Great Britain, Germany, France, Italy. Brimstone is an easy one to point to, as a full up system. At the subsystem level, the company also has very capable electronics, guidance, control and propulsion systems and so forth. So there really is a broad array of things to draw on.
ExecutiveBiz: Where do you think government contracting goes from here, with all the changes that are going on right now and how has the industry changed during your time serving in it?
John Pranzatelli: I’ve been involved in government contracting, mostly defense contracting, for over 30 years. The structure of the industry, the relationship of the companies to our government customers has really changed a lot over that time. Today, there are fewer companies at the prime level pursuing a smaller number of bigger programs.
What that means is that each competition is much more important for that company. Each program is more critical. It makes the competition, on the one hand, tougher for the companies. The paradox of that is, unfortunately, it means the government customers have fewer alternatives, in many cases.
We’re in an environment where individual programs have more pressure, where competition’s tougher, and where the customers, our customers, have heavier challenges. I don’t really see that changing with the defense budget shrinking. It’s going to stay that way, maybe get a little tougher. And we have to work through that.
ExecutiveBiz: Where does your company fit into that landscape that you just described?
John Pranzatelli: MBDA entering the U.S. market gives the U.S. an opportunity to add a world“‘class, top“‘tier competitor associated with our closest allies to that landscape. So we can help a lot, in terms of adding competition in that environment, bringing in some other technologies that maybe some other countries have invested in or paid for and create a situation where government customers have an added alternative.
ExecutiveBiz: How did your time at TRW and Northrop prepare you for your current role?
John Pranzatelli: I was at TRW for 20 years. And then Northrop bought that company, and I was with Northrop for about eight. So over that period, I was lucky. I had a lot of opportunity. I saw a lot of change, worked in very different parts of those companies, very different functions and activities.
And so all of those experiences – if you reflect on them and think about them – can be brought to bear in any job. With TRW, I was in finance, M&A, program types of jobs. I moved between different businesses of that company. With a great diversity of programs. Got a really good, broad view of how the government works with industry. Most of those were defense contracts. Most of the others were government contracting. I also worked in the company headquarters and learned how we approached Wall Street. So you really benefit from having a great diversity of experience.
ExecutiveBiz: What are some of the technologies that are in high demand from government clients around the world that complement your business? Where are you looking to invest?
John Pranzatelli: We are. The remotely piloted aircraft area is something that does complement our business. There remains a need to deal with smaller asymmetric threats. I would expect the trend of the last 20 years to continue, towards more precision, lower collateral damage, being able to do things with better intelligence and so forth. That’s going to continue.
I think that is an opportunity for us, and, frankly our competitors, to continue down that path of greater precision and minimization of collateral effects.
ExecutiveBiz: What are you most excited about moving forward?
John Pranzatelli: Well, again, MBDA entering the U.S. market really gives us in this country the opportunity to add a world“‘class competitor to a shrinking base of U.S. defense companies. So that’s a great challenge for me and my colleagues here and will be, a few years from now, the biggest accomplishment of our careers.