WEBVTT

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- The challenge is not in the demand.

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The challenge is in the production.

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- Fabio, welcome.

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Fabio, what does it take
to scale defense production

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across Europe today?

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- It's a big challenge, Georgie.

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And I think it's a challenge
in multiple layers.

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So first of all,

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it takes a lot of production
ramp-up capabilities.

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Because we are a bit in the no man's land,

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I would say, right?

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So defense size and defense scale-up

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is not any more the haute couture size.

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Not yet, though, the mass market.

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We are somewhere in between,
so that's very complicated.

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This, I think, is challenge number one.

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Probably challenge number two

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is that the whole supply changed its scale,

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and we need to go deeper into that.

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Meaning, you know, chemicals, propellants,

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a lot of URUs and basic components.

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So everybody needs to scale up,

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and some of these
companies are very small.

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And I would say probably
a third layer of challenge

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is that we need to scale
it while at the same time

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preserving a certain level of sovereignty.

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- Can I ask your views on the fact

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that we're seeing some
prime contractors looking

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at unused car factory production lines

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in an effort to boost production?

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What's your view about that?

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Is that the answer?
- Yeah, well,

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I'm not among the most
enthusiastic on this

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in the sense that,

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let me distinguish probably
two layers, Georgie.

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One is, if we think about economy of war,

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should that happen, then, of course,

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countries need to have
a plan to take over,

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like happened in World War II,

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to take over the economy,
you know, all hands on deck.

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We saw a glimpse of that during COVID,

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where we end up, you know,
asking high engineering company

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to produce a ventilator.

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That's emergency answer
to an emergency question.

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So let me put that aside.

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If we think about instead
normal production ramp-up

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that what we need now,

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I would argue probably
automotive, meaning passenger car,

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is not the right answer for
the scale I described before.

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I think we're very, very
far from those numbers.

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Of course, I mean,
automotive can contribute

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for some segments.

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Off-road is a part of automotive.

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Agriculture is a part of
automotive, agricultural vehicle.

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So definitely can have a help,

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probably not so much as
is, you know,

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reading on the news these days.

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- Where do you think CEOs
should be prioritizing

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their resources right now?

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- Well, I think, first and
foremost, are visibility,

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because I want to stick on
this concept:

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Th challenge is not in the demand.

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The challenge is in the production.

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So I think the first element
in an uncertain demand signal

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is visibility on what's coming,

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visibility on what you have,

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visibility on what you don't have.

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I think probably the second layer is,

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for the first time in Europe,

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[there is] a fair shot
of the talent market,

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and therefore, that is very important.

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And probably the third element is

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helping your whole supply chain to scale up

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under the guidance
probably of the big prime.

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- Fabio, thank you so much for your time.
- Pleasure.