Project Phoenix: CAE's R&D initiative

"It is the largest R&D initiative ever launched by CAE."

Global flight simulation leader CAE Inc., in the midst of a major reorganization of its business, is banking on Project Phoenix, a $630-million, six-year initiative to help put the Montreal company back in full flight when it comes to research and development.

The federal government will provide $189 million of this through Technology Partnerships Canada, a program that contributes heavily to the aerospace industry with payback from royalties on sales of equipment resulting from the research. “It is the largest R&D initiative ever launched by CAE,” says president and CEO Robert Brown, who joined the firm in 2004 after holding the top job at Bombardier Inc. until he was forced out, in 2002.

Brown says the only way for CAE to control its destiny is to “come up with products that have high quality, are reliable and are innovative,” all the while keeping costs in check. In a mid-February conference call with analysts and journalists to discuss improved third-quarter results–$17.6 million profit for the period ended Dec. 31 on revenue of $276.6 million, compared to a loss of $347 million the previous year–Brown did not want to give too many details about Project Phoenix. But he did say that aerospace-related research will be its primary focus, and new applications of simulation technology to the civilian and military markets will also be explored. Brown acknowledged the simulator market is a competitive one. “We fully expect to have competition; that's part of life.”