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HAL's changing fortunes

HINDUSTAN AERONAUTICS' (HAL's) annual results for 2003-04 put out as a press release, but with no press conference, are in line with `expectations'. The turnover increased by an impressive 22 per cent from Rs. 3016 crores in 2002-03 to Rs. 3690 crores last year, but the profit inched up by about 3 per cent from Rs. 433 to Rs. 445 crores.

Exports, on the other hand, have more than doubled from Rs. 104 crores to Rs. 215 crores with a licence built Dornier 228 exported to Mauritius and two indigenously developed Dhruv helicopters to a "friendly country" making significant contributions. One assumes that the figures do not include the $ 5 million plus order for helicopter tail rotor blades announced late in February by Bell of the U.S.

Eight Jaguar strike aircraft, 13 Dhruvs and 28 upgraded MiG-21 BIS fighters were delivered to the Indian armed forces, but it is meaningless to attempt comparison with previous years because `delivery' in many such cases is rather nebulous with the process often extending for months on end. That is not true with the Jaguars because they are the first of a new and upgraded series with an interesting tale to tell.

Central to the upgrade is a nav-attack system with a new mission computer. For reasons that are difficult to understand, the IAF and HAL originally decided not to adopt the superb computer developed by the Bangalore based DARE (Defence Avionics Research Establishment) for the most potent weapon system currently in the IAF's armoury, the Sukhoi 30 MKI, for the Jaguar and MiG-27 upgrades. Having finally realised the folly of their approach, a frenzied joint effort between DARE and HAL culminated in the new Jaguars actually taking to the air with their much-improved new avionics. One hopes that similarly upgraded MiGs will follow suit soon.

Slightly larger numbers of MiGs, Dhruvs and Jaguars are expected to be delivered this year, but there might be a hiatus in 2005-06 until significant LCA, Sukhoi and Dhruv deliveries begin.

The retirement later this year of N. R. Mohanty should therefore be seen by HAL as an opportunity to energise itself once again. Mr. Mohanty's relatively short innings has seen some ground work made for the future, but has been marked much more by his transparent and somewhat emotional integrity.

It is important that whoever takes over as the new chairman has a minimum five years of senior aircraft manufacturing experience (at least at the general manager's level), but it is essential that the ability to think and manage strategically is given at least as much weight.

A first step is for HAL to benchmark itself internationally. This applies as much to human as to physical resources while taking cognisance of the fact that over a third of its employees are in non-core activities such as transport and health. In a similar fashion, while the company was forced by political compulsions, personified by Sanjay Gandhi, to put up a sophisticated avionics unit at Korwa in eastern Uttar Pradesh, it needs to see how best it can make the best of a difficult situation, rather than cry over spilt milk.

C. Manmohan Reddy

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