1/2015. Case Millog Case Aviation Opinion. Finnish-Swedish defence cooperation a symbiotic relationship or just a symbolic gesture?

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1 1/2015 Case Millog Case Aviation Opinion Millog s situational awareness enables the Finnish Defence Forces to plan the storage, reuse, deployment in training and maintenance of the material in an optimal fashion. Strategic partnership with Patria provides the Finnish Air Force with operational and economic benefits. Finnish-Swedish defence cooperation a symbiotic relationship or just a symbolic gesture? Patria magazine online

2 1/ Patria Group s stakeholder magazine. Birgitta Selonen, Editor in Chief, birgitta.selonen@patria.fi. Editing and layout Otavamedia Oy. Print NewPrint. Paper cover 200g Galerie Art Silk, inside pages 130g Galerie Art Silk. Feedback, request for information and subscriptions: info@patria.fi. Cover phography Patria. ISSN ISSN-L Key Figures In many respects, Patria Group s earnings for the financial period 2014 measured up to expectations. As expected, net sales fell, but profitability remained satisfactory. The Group s operating profit represented 12.1% of net sales. Sales outside Finland for the Financial Period accounted for 50% of the net sales. 348,5 415,0 514,2 589,5 462,4 52,1 78,3 87,8 56,0 8,8 15,1 13,1 12,5 8, , Net sales* (EUR Million) Operating profit* (EUR Million) Gross investments in fixed assets* (EUR Million) Personnel average* 8 Without the services produced by Patria, the FAF would be unable to operate. We would no longer be able to fly. - Kari Renko, Brigadier General (Engineering), Finnish Defence Forces (FDF). 4 Editorial In collaboration with our customer, the Finnish Defence Forces, we have managed to develop the Millog concept into a functional and cost-efficient model which can be easily applied to other countries, including our neighbour, Sweden. 6 Proud of my work A feeling of success comes from finding the best operational model, while working together in an open manner. 8 Aviation Strategic partnership with Patria provides the Finnish Air Force with operational and economic benefits. 12 Land Superbly capable in off-road use, Patria AMV XP also has excellent on-road performance. 16 Systems Fast technological advances in training systems in combination with limited financial resources demand innovative technological solutions capable of securing modern, high-quality and efficient training capabilities. 18 Millog The well started collaboration between the Finnish Defence Forces and Millog was further expanded in early 2015, when the FDF transferred an additional portion of its maintenance functions, including 300 staff members, to Millog. 20 Responsibility Patria became a partner in a project set up to restore a Myrsky fighter. 24 Opinion Finnish-Swedish defence cooperation a symbiotic relationship or just a symbolic gesture? 26 In brief Patria achieves good ranking in anti-corruption study. Patria will again provide pilot training to students from Kazakhstan. Patria s products at DSEI in London ,3 56,1 54,6 55, ,4 49, ,5 780, , Order stock* (EUR Million) Equity ratio* (%) Net sales outside Finland* (%) 50 45,3 Tax footprint Patria is subject to corporate income tax in the following countries: Finland, Sweden, Norway, Germany and Poland. Patria does not have operative companies in low taxation countries. A dormant company in Delaware, U.S. Vammas Corporation, was liquidated in Patria s tax strategy is to support business solutions and ensure that they are implemented properly and in a compliant manner also from a taxation perspective. The starting point is compliance with applicable local legislation and handling reporting obligations. Further information Net sales 462,4 EUR Million Operating profit 56,0 EUR Million Personnel average * The years pro forma due to the change of Nammo s consolidation method. From the year 2013 onwards, in Patria s financial statements, Nammo is consolidated using the equity method. 2 Patria Patria 3

3 Editorial Photo Arto Wiikari We have found new and interesting markets by offering our services to a wider range of customers, including also security authorities. Strategic partnerships and corporate social responsibility play a key role This magazine provides a broad presentation of the know-how, products and expanding services of the Patria Group. In particular, this issue explores our partnerships and the related services. Securing the supply of mili tary materiel, maintaining the Finnish Defence Forces (FDF) equipment and related systems, and ensuring their performance requires seamless collaboration between the entire defence administration and various industries. This represents the core competence of the Patria Group which, due in part to its history, plays a natural and major role in the activities of the various Finnish defence branches. In addition, we have found new and interesting markets by offering our services to a wider range of customers, including also security authorities. On the international market, our Land Business Unit in particular has established itself and we aim to deepen the related know-how by engaging in international projects with various partners. Our subsidiary, Millog, is the FDF s strategic partner, providing life-cycle support services for Army and the Navy materiel, in both normal and crisis time conditions. In other words, under normal conditions we are a corporate organisation that has precisely speci fied duties in crisis time. In early 2015, all Army garrison repair shops and Navy maintenance centres were transferred to Millog. Our agreement with the FDF will expand and deepen our exis ting strategic partnership. In collaboration with our customer, the FDF, we have managed to develop the Millog concept into a functional and cost-efficient model which can be easily applied to other countries, including our neighbour, Sweden. We have, after all, been operating for years in Sweden, where we maintain equipment such as helicopters, the most recent example being the signature of an agreement on the maintenance of HKP-16 Black Hawk helicopters. For more information on Millog, see pages in this issue. This issue includes an article on our strategic collaboration with the Finnish Air Force (FAF). In early 2015, Patria s Aviation Business Unit strengthened its partnership with the FAF, by signing a strategic partnership agreement on the provision of life-cycle services for military aviation systems. This agreement specifies the procedures and terms of the deca de-long collaboration between the two parties, strengthening the position of our strategic partnership in all situations. Via this collaboration, an aircraft maintenance concept has been created in Finland which is viewed as being more cost-effective than a system under which OEM suppliers provide the same services. In addition to collaborating with the FDF, Patria is playing an increasingly important role in the security sector. An example of this is an agreement, signed in early 2015, on a field command system to be primarily used under mobile conditions by various authorities. This system will enable a range of activities, including the management of operations conducted by various authorities in the field, the maintenance of situational awareness, the entry of data into various systems, the real-time exchange of information between public authorities, and communications. The system will be used by the police, the rescue services, the social and health services, the Boarder Guard, the FDF, Customs, as well as any other authorities that join the system later. On the international market, Patria will set its sights in the coming years on regions such as Australia and the Middle East. BAE Systems and Patria are joint participants in a highly important tendering process arranged by Australia for the procurement of armoured reconnaissance vehicles. As the market leader in modern 8x8 wheeled armoured vehicles, Patria makes an excellent partner for BAE Systems in Australia in the delivery of a suitable wheeled vehicle. With KONGSBERG, we have signed a partnership agreement on participation in projects focusing on the delivery of vehicle and weapon systems in the Middle East. In addition to wheeled vehicles, Patria is also the market leader in turreted 120mm mortar systems. Both kinds of systems are already in service in the Middle East, as are Kongsberg s RWS weapon systems. Together, we form a powerful team in terms of meeting future customer needs. Changes are also taking place in the ownership of the company. Patria s owner, the Finnish state, has announced that it is looking for an industrial partner to assume the role of a Patria s shareholder, following Patria s decision to redeem the shares owned by Airbus Group NV after the end of the 2014 financial year. This issue is likely to be resolved during the current financial year. Patria bases its profitable business operations, development and future on frictionless partnerships. A good partnership is based on responsible practices, which means going far beyond zero tolerance of corruption. See pages of this issue for more information on responsible operations. Have a wonderful summer. I hope to see you at the DSEI event in London in the autumn, where Patria will again showcase some of its unmissable, amazing high tech. Heikki Allonen President and CEO 4 Patria Patria 5

4 Proud of my work Patria Photos Patria and Millog Together we create success Creating success together is one of Patria s values. We asked Patria employees about the kinds of experiences that give them a feeling of success in their work. TAPANI KUUKKANEN Personnel Development Manager, Group Services, Tampere ERKKI LUUMI Aircraft Mechanic, Aviation Halli MINNA KIRIJATSHENKO Key Account Manager, Millog Oy Tampere SISKO HALONEN Process Manager, Aerostructures Halli EERO KOVAMÄKI Product Group Manager, Systems Halli I train and coach Patria employees at various events and, together with our Business Units, develop solutions for issues that require development and for those that we want to handle even better than now. A feeling of success comes from finding the best operational model, while working together in an open manner. My work at Hawk maintenance services involves a variety of tasks, including structural inspections, engine test runs and preparing aircraft for flight operations. It is gratifying to see the result of one s work. Being able to meet the requirements of a customer with our services and completing a tender gives me the feeling of success. And of course it is always gratifying to see a tender resulting to an order. Maintaining a cheerful and easy working atmosphere is important. If the prerequisites are in place for fruitful work and employees are satisfied, quality and efficiency will also remain high and I myself will feel that I succeeded. In my own work, I feel that I ve succeeded when my team manages to bring a challenging project to a successful conclusion by working together. Feedback from a customer is always valuable. It is highly rewarding. 6 Patria Patria 7

5 Case Aviation Jukka Nortio Photos Antti Hentinen, Rami Marjamäki and Harri Hinkka From co-operation to strategic partnership In early 2015, the long-standing and close co-operation between the Finnish Air Force (FAF) and Patria was sealed to form a strategic partnership. This approach is intended for both peacetime and crisis situations, enabling Patria to perform its role on a systematic and long-term basis while generating cost savings. Strategic partnership is a novel concept for the Finnish Defence Forces (FDF). I think we first raised strategic partnership up as a topic for discussion at the FDF when we began examining the possibility of finding partners for Army maintenance functions in the early 2000s. Partnership means the Defence Administration engaging in networking with the private sector, comments Kari Renko, Brigadier General (Engineering). On 6 March 2015, the date when the FAF celebrates its foundation, cooperation between the FAF and Patria was sealed when the parties signed an agreement on a strategic partnership for the delivery of life-cycle services for military aviation systems. Our collaboration has a long-standing foundation and has now been formalised to meet the requirements of the modern world. All of the practical arrangements have now been put down on paper, Renko remarks. THE LOGISTICS ESTABLISHMENT IS THE KEY ELEMENT The FDF strategy includes a definition of strategic partnership according to which the FDF will focus on its core function, the defence of Finland by military means, while basing its support functions on a networked operating model. The FDF Logistics Establishment plays a key role in this model. 8 Patria Patria 9

6 Case Aviation Strategic partnership with Patria also provides the Finnish Air Force with operational and economic benefits. Martti Wallin, Unit Manager at Patria Aviation (left) and Kari Renko Brigadier General (Engineering) from The Finnish Defence Forces. The Logistics Establishment links the military component of FDF logistics with one from the civilian world, Renko remarks. The Logistics Establishment, which serves the entire FDF, was founded in early Previously, each branch of the FDF had its own materiel command. The Logistics Establishment is responsible for material management, such as the upkeep and maintenance of equipment and the provision of other support services for every branch of the FDF. Under the new model, the FAF is an operator conducting flight operations, assuming responsibility for the servicing of aircraft and, to a certain degree, for maintenance performed at workshop level. The Logistics Establishment is responsible for all material, ranging from aircraft to fuel tankers. The FAF reports its material needs, while the Logistics Establishment produces the required materiel together with our industrial partners such as Patria, Renko comments. The FDF Logistics Establishment uses domestic industrial partners such as Patria, engaging them in a variety of functions including planning, maintenance and manufacturing. Such collaboration enables both the development of maintenance systems and the repair of equipment in Finland in a manner that relieves us of depending solely on the original equipment manufacturers, comments Martti Wallin, Unit Manager at Patria Aviation. PREPAREDNESS UNDER ALL CONDITIONS Strategic partnership deepens collaboration to a level where account can be taken of critical security of supply in peacetime and in crisis situations. Strategic partnership involves the planning and development of operating procedures, conducted in a long-term manner and close collaboration. Patria, a strategic partner, can be considered part of our logistics organisation, Renko comments. The depth of collaboration between Patria and the FAF is illustrated by the completion by Patria of the many modifications to FAF aircraft. The details of such modifications are subject to approval by the Logistics Establishment, which is responsible for ensuring that military aircraft in Finland are airworthy. Major modifications area also subject to a further approval by the Finnish Military Aviation Authority, a body attached to the Finnish Air Force Headquarters and which is equivalent to the Finnish Transport Safety Agency (Trafi), the civilian safety authority. The military aviation authority has set a standard for our operations and ensures that we comply with it. An independent authority ensures that FAF aircraft are airworthy under all circumstances, Wallin says. Our expertise, which is high quality by international standards, did not emerge by chance. To be capable of maintenance operations in Finland, an operator requires the necessary equipment and in-depth expertise. The prerequisite for this is continuous and in-depth training in aircraft maintenance engineering. Aircraft procurement agreements always include the purchase of know-how and planning capability, aimed at enabling us to gain comprehensive expertise in aircraft maintenance, Renko remarks. The maintenance and modification of Hawk trainer fighters Measures already completed: Adoption of the life-cycle management scheme for the Hawk jet trainers, under which Patria and its predecessors have committed themselves since 1978 to providing maintenance services in Finland, and the modification in 2010 of the used aircraft purchased from Switzerland to suit Finnish conditions. In addition to savings, the decisions taken led to the rescheduling of the replacement of Hawk aircraft from 2015 to Kari Renko Collaboration dating back one hundred years The partnership between the Depot was split off from the State Aircraft the present-day Patria Aviation Business FDF and Patria dates back as Factory and placed under the Air Force Area. far as to the dawn of Finnish Headquarters in Practices have developed over the independence, to a period This organisation basically remained years, with procurement legislation, when the FAF began organising its own aircraft maintenance services in In the 1920s we had the Aviation Dock that repaired aircraft and the Aviation Depot that provided materiel for the Air Force. The Air Force Aircraft Factory was founded in 1921, Renko says. In 1928, a factory called the State Aircraft Factory was founded under the Ministry of Defence, while the Aviation unchanged until the 2012 defence reform. Today, such collaboration between two organisations is termed partnership, comments Renko. Over the years, this corporate structure underwent changes as the industries close to the FDF were brought together under the name of Valmet. Valmet Aviation was separated from this corporate structure in 1991 and developed into among other factors, governing the forms of collaboration adopted. Close cooperation has developed between Patria and the FAF in order to meet the demands of the period in question, providing a model for operational development within the other service branches. EFFICIENCY AND SAVINGS Strategic partnership with Patria also provides the FAF with operational and economic benefits. Operationally, the shift in the focus of the FAF s core operations is the most notable change compared to the previous years. Like the FDF across its entire organisation, the FAF has been compelled to make substantial staff cuts, but this has not lowered its operational standards. The development of continuous and long-term collaboration between Patria and the FAF will bring cost savings. Substantial savings can be achieved on a yearly basis in several areas of collaboration. Renko succinctly sums up the close partnership based on trust and a long, shared history, as follows. Without the services produced by Patria, the FAF would be unable to operate. We would no longer be able to fly. 10 Patria Patria 11

7 Case Land Tapio Koisaari Photos Matti Immonen and Patria Ensuring the vehicle s smooth passage across terrain requires a substantial degree of flexibility in the suspension, along with a sufficiently smooth and progressive dampening action that can be adjusted to match the suspension s flexibility. Such a suspension adjustment is virtually the opposite of that required of a vehicle making sharp swerves on tarmac. Patria AMV XP Agility on the street and off road Armoured wheeled vehicles have performed outstandingly well in current crisis management operations. These vehicles are equally manoeuvrable on tarmac and off road, offering ever better protection for their crews. Patria s wheeled armoured vehicles had a long history before the introduction of the current AMV model. The roots of the legendary Pasi are deep in peacekeeping operations, in which it has a long, successful record. Production of the six-wheeled Pasi was discontinued in 2003 when the new 8x8 Patria AMV entered serial production, but the faithful Pasi will continue to serve for decades to come. A project is currently underway to upgrade the Pasi vehicles used by the Finnish Defence Forces (FDF). While the Pasi armoured vehicle was chiefly based on technology used in trucks with lighter protection, current wheeled vehicles perform significantly better and feature improved protection. This is due to the fact that the latest operations in countries such as Afghanistan have shown that vehicles on patrol duty are exposed to increasingly effective mines and roadside bombs. THE NEW XP Patria has taken up the challenge with the introduction of its new AMV XP model, which takes account of the requirements faced by current customers and the advantages offered by AMV s excellent basic structure. Whether a wheeled vehicle is used as a personnel carrier or a platform for weapon systems, the ability to maximise its payload is a key requirement. With a total weight of 30 tonnes, AMV XP can deliver a payload of 13 PATRIA AMV XP XP stands for Extra Payload Extra Performance Extra Protection 12 Patria Patria 13

8 Case Land The truly extreme environment for any ordinary land vehicle is water. However, AMV has an amphibious basic structure, enabling it up to a weight of 28 tonnes to swim through water, provided that it is fitted with an amphibious option. However, the current engine power is not the only interesting figure, since the equipment of contemporary soldiers and the vehicle s own systems will require substantial levels of electrical power. tonnes. The mass of the vehicle s protection, weapons, equipment and crew is taken into consideration when calculating the payload. With regard to vehicles, engine power is also a consideration. The engine of AMV XP provides an output power of 450kW, representing an increase of ten per cent over the vehicle s predecessor. However, the current engine power is not the only interesting figure, since the equipment of contemporary soldiers and the vehicle s own systems will require substantial levels of electrical power. The maximum output of generators associated with the introduction of XP will be sufficient for future needs. IMPROVED CHASSIS The design of AMV 8x8 was already found to be highly functional at the prototype stage, something that came as no surprise to its designers. Due to multibody simulation, the designers were able to ensure excellent driving dynamics at the drawing board stage the simulation models were made progressively cellent performance on terrain, but all of this is supplemented by AMV s maximum speed of more than 100km/h. Ensuring stability at high speeds also requires expertise on tyres, one of the strengths of AMV design team. Superbly capable in off-road use, this vehicle also has excellent on-road performance. To reconcile the conflicting features of onroad and off-road use, AMV XP will be equipped with an optional mechanism for adjusting the vehicle s ground clearance, enabling enhanced manoeuvrability in extreme conditions. In addition to adding enhanced equipment, the suspension of XP has been optimised to a degree that surpasses that of the previous model, with the aim of maximising the vehicle s performance. A well-functioning chassis also facilitates the operation of the weapon system stabiliser. Ensuring the vehicle s smooth passage across terrain requires a substantial degree of flexibility in the suspension, along with a sufficiently smooth and progressive dampening action that can be adjusted to match the suspension s flexibility. Such a suspension adjustment is virtually the opposite of that required of a vehicle making sharp swerves on tarmac. The truly extreme environment for any ordinary land vehicle is water. However, AMV has an amphibious basic structure, enabling it up to a weight of 28 tonnes to swim through water, provided that it is fitted with an amphibious option. FLEXIBLE PRODUCT STRUCTURE While the modular product structure is a key innovation in manufacturing industry, its adoption is making slow progress among manufacturers of heavy equipment and military vehicles. AMV customers benefit in a number of ways from the fact that Patria is an industry forerunner in this respect. For example, the axle wheel stations described above, with their interchangeable suspension components, constitute a module of their own. This is a major advantage with regard to security of supply on the battlefield. On the other hand, AMV can be fitted out for a broad range of tasks, from ambulance duties to providing a platform for heavy mortars. In the process of integrating weapons systems, mere modularity is insufficient the assistance of Patria s design team is required more precise by verifying them through various measurements. The objective the designers set for themselves when designing AMV s features was manoeuvrability equivalent to that of tracked vehicles under difficult conditions on terrain, while retaining the advantages of wheeled vehicles on the road, says Kari Grön, Vice President, vehicles product line, when summing up the project s challenges. The basic solutions regarding the vehicle s suspension speak volumes to those who know about automotive engineering. An independent double wishbone suspension, familiar in racing cars, provides an excellent foundation for the design. Combined with a hydropneumatic suspension element a less familiar feature to the general public this mechanism enables the vehicle s wheels to oscillate almost half a metre in a precisely controlled manner. Alongside the optimisation of power distribution within the powertrain system, the work cited above alone would deliver an exin order to ensure the overall performance of the vehicle. Customisability supported by Patria s flexible design team is one of the company s strengths. The benefits of modularity become clear when considering the vehicle s protection and crew compartment. Modularity enables the development of the vehicle s protection during the late phases of its life-cycle, which is often made necessary by changes in the operating environment. However, the customer can already see the key benefits during the vehicle s procurement phase. A well-thought out product is also cheaper to manufacture and, naturally, to maintain. The product s competitiveness is therefore evident not only in its performance, but also in its price. RELIABLE LIFE-CYCLE SUPPORT Patria can arrange for the assembly of AMV in the vehicle s target country, enabling the customer to take advantage of product support located nearby. An assembly plant in the customer s own country can be a significant asset during a crisis or similar situation when equipment maintenance capability is put to a genuine test. A long service life of up to 30 years means that the greatest development pressure appears in the form of digitalisation. AMV XP is already compatible with any C4I or BMS system and, due to the vehicle s modularity, system upgrades can be smoothly performed on its electronic systems. The ability to ensure the reliability of the partial deliveries and product support required by the vehicle s long service life places certain requirements on the company delivering such vehicles. Patria s steady ownership lays a strong foundation for long term operations. Due to the vehicle s modularity, system upgrades can be smoothly performed. A well-functioning chassis also facilitates the operation of the weapon system stabiliser. 14 Patria Patria 15

9 Case Systems Patria Photos Patria and Finnish Air Force VIRTUAL SIMULATORS LIVE REAL WORLD C2 Virtual reality and real world combined in training SYNTHETIC FORCES LIVE RANGE Fast technological advances in training systems in combination with limited financial resources demand innovative technological solutions capable of securing modern, high-quality and efficient training capabilities. Photo Finnish Air Force The increasing training requirements of users and the need for a wider approach to simulator training across service branches constantly sets increasing requirements for the networking of simulators. Patria s competence and experience in the field of training systems, achieved through long-term efforts and perseverance, date from the integration of the national data link system with Finland s Hornet simulators. The network expanded over the years and its technology was updated to High Level Architecture (HLA). These years spent working with the national data link system have built a strong foundation of competence for Patria in a challenging operating environment. Today, Patria demonstrates its expertise in training systems by the networking of increasingly distributed training systems. If required, the HLA standard enables the implementation of a joint virtual training environment for soldiers, providing fire control data on the ground and fighter pilots flying through the skies. HLA also makes joint exercises between the simulators of different service branches possible. At the moment, the HLA standard is published by the IEEE and NATO (STANAG 4603). In 2014, Patria supplied the Finnish Air Force with a system solution that enables the use of realistic high fidelity Computer Generated Forces in Hawk simulator training. This technological solution enables the networking of Hawk simulators with Hornet simulators and, in the future, with modern anti-aircraft simulators. With the help of a networked training system based on a virtual environment, all personnel materially involved in the application of firepower can be trained in the same exercise scenario. A good example of such a scenario is artillery fire control, in which the observers, the desired extent of the indirect fire command chain and, if necessary, weapons system simulators can all be involved in the same exercise. In such training environments, decision-making and the command Patria supplied the Finnish Air Force with a system solution that enables the use of realistic high fidelity Computer Generated Forces in Hawk simulator training. chain are implemented according to the actual organisation and using actual command systems. At the Eurosatory 2014 exhibition, Patria presented a configuration in which the Nemo Training Simulator was linked to the indirect fire control system inside of an AMV Command Post vehicle, which created targets and fire missions for the simulator. EMBEDDED TRAINING The boundary between the simulated and real worlds is disappearing, as systems in operative use enable the production and reception of simulated information in real-life training scenarios. For example, Embedded Training capabilities integrated with defence systems enable the execution of extensive air combat exercises against entirely synthetic threats. This enables the exercise to be carried out without tying a significant number of fighters and pilots down in flying as the opposing forces. The implementation of a system as described in the previous example requires setting up a synthetic threat environment and the transmission of the data generated by it between the aircraft and a ground station. As an added benefit, in addition to the significant cost savings, performance characteristics of the desired threats can easily be implemented for the synthetic targets, which would be impossible when using an opposing force consisting of own fighters or jet trainers. Embedded Training can also be used to expand the capabilities of the users systems by simulating an entirely virtual radar for jet trainer that reacts like an actual radar to real aircraft and synthetic threats in the same exercise network. The creation of virtual weapons systems that can be used to engage targets in the exercise network is also possible. In weapons systems, embedded training capabilities enable practising the use of modern weapons systems with computer-based interfaces in training mode without expending ammunition or the need for the precautions and shooting ranges required for live fire exercises. At Patria, our challenge is to integrate systems implemented with different technologies into seamless interoperation, while simultaneously creating training scenarios that are realistic but might be unfeasible to execute in real life. Patria s customer-oriented mode of operations provides the conditions for success in technically complex yet cost-effective projects. 16 Patria Patria 17

10 Case Millog Matti Remes Photos Millog Millog has operations in various locations in Finland. The professionals at their work in Riihimäki (up) and Kalkku (below) The deepening partnership The well started collaboration between the Finnish Defence Force (FDF) and Millog was further expanded in early 2015, when the FDF transferred an additional portion of its maintenance functions, including 300 staff members, to Millog. In September 2014, the FDF and Millog, a Patria subsidiary, agreed to deepen their strategic partnership, with Millog taking a larger responsibility of the FDF s maintenance functions. This strategic partnership for maintenance was built in two phases. In the first phase, implemented in 2009, Millog assumed responsibility for maintenance functions performed at the Army Depot (2nd level), comprising activities such as servicing and repairing weapon systems and vehicles, including preventive and corrective maintenance. In the second phase, in early 2015, the maintenance work carried out at the Army garrison repair shops (1st level), was also transferred to Millog. This includes corrective maintenance of vehicles and equipment, and performing minor servicing operations. At the same time, all Navy repair and maintenance functions were transferred to Millog. MUCH MORE THAN JUST COST SAVINGS Millog s role in the planning and implementation of maintenance operations was strengthened when the Logistics Command began operating in early 2015 and the roles and responsibilities of the various operators were clarified. The Logistics Command handles the common logistic arrangements for the FDF, securing the material capability for the defense system and ensuring its usability and life cycle support. According to Lieutenant General Raimo Jyväsjärvi, Deputy Chief of Staff, Logistics and Armaments, a range of benefits were gained in addition to cost savings when partnership began to deepen. Demanding repair and maintenance functions for defense material are now provided by the single, professional operator. Instead of being a support function for the FDF, maintenance became part of Millog s development-oriented core operations. Our cost awareness related to the use and maintenance of equipment improved. We can also provide rapid materiel support to troops on crisis management or other similar operations, Jyväsjärvi remarks. IMPROVED SITUATIONAL AWARENESS According to Jyväsjärvi, as the partnership further deepens during its second phase, further benefits will be realised, since demanding repair and maintenance functions for defense material are now provided by the single, professional operator. Millog s situational awareness enables the FDF to plan the storage, reuse, deployment in training and maintenance of the material in an optimal fashion, taking account of the defense materiel s life-cycle. Jyväsjärvi regards the disappearance of the boundary between the maintenance work performed by the FDF and Millog as a positive issue. This will eliminate overlapping tasks, bringing high maintenance capabilities closer to the users of systems. The number of hours spent on maintenance will increase, improving the preventive dimension of maintenance, which will in turn improve the reliability of defense materiel, he comments. Jyväsjärvi remarks that the benefits arising from partnership are also relevant in crisis time conditions. Millog is capable to flexible adjustment of its capacity to match FDF needs, using not only the capacity of its owner companies but also capacity of its suppliers. ANOTHER OPTION UNDER CONSIDERATION Before deciding to expand the partnership with Millog, the FDF carried out a long and thorough assessment of its future maintenance arrangements. According to Jyväsjärvi, an alternative option the FDF developing its operations by itself remained as a choice on the table until the very end. Both alternatives under evaluation were well determined and justified. The issue was ultimately determined by the bottom line through the assessment of clearly measurable benefits. According to Jyväsjärvi, such benefits include cost savings, higher productivity, enhanced overall management of maintenance activities and improved management of the defense materiel life-cycle. Once the extended partnership is in place, the FDF will perform only daily maintenance and inspection activities when equipment is in use. Jyväsjärvi points out that there is another side to the coin. The FDF will lose its own capabilities and expertise in the performance of demanding corrective maintenance and repair operations. This is something that we were aware of from the very beginning. However, we are confident that Millog and its Finnish suppliers will be able to provide us this service including war time conditions. A clear division of responsibilities works in practice Following the deepening of the strategic partnership between the FDF and Millog, a total of 317 employees as well as various activities at 14 locations were transferred from the FDF to Millog. One of the units transferred to Millog is located in Pansio, Turku and is responsible for maintaining the Navy s ships and systems. Employees from this unit also work at the Upinniemi garrison. Juha Reivolahti, the head of the Pansio unit, says that changing the operational model required a great deal of work. However, the experiences obtained during the first few months are positive. The new order-to-delivery process is clear, since the Navy, as our customer, orders services from us. Our operations are now more systematic than before. Work is now specified and scheduled more precisely, Reivolahti says. Reivolahti points out that equipment maintenance used to be just one of the FDF s support functions. In contrast, at Millog this is a core operation. This provides a strong foundation for our operations. For example, we can use the broad expertise of Millog s other sites whenever necessary. 18 Patria Patria 19

11 Responsibility Päivi Brink Photos Patria, Finnish Air Force, Aviation Museum of Central Finland and Jorma Laakkonen. The new life of a Myrsky fighter aircraft provides a boost for young people The fighter VL Myrsky was Finland s answer to the country s wartime difficulties of acquiring equipment with sufficiently high performance from outside Finland. All of the 51 Myrsky fighters, built by the State Aircraft Factory, were dismantled after the war. Now, Patria has decided to become a partner in a project set up to restore a Myrsky fighter. Unemployed young people are also participating in the restoration project and telling its story. The Aviation Museum Society of Finland, the Finnish Aviation Museum and the Aviation Museum of Central Finland initiated a project in summer 2014, aimed at restoring a VL Myrsky fighter aircraft for exhibition at a museum. This stationary exhibition will tell the story of Myrsky s planning and production, including the role it played during the war. The reconstruction project is scheduled for completion in 2019, with Patria as its principal sponsor. In addition to providing economic support, Patria will participate in the production of parts for the fighter. From the very beginning, the project management wanted to involve students from vocational institutes in the restoration project, and to this Patria wanted to add unemployed young adults working in various workshops organised by the cities of Vantaa and Jyväskylä. The young people are participating in the production of new parts for the aircraft, as well as in telling the story of the Myrsky aircraft in the form of an animated film. Patria has already sponsored young people at risk of being marginalised for five years, and we saw a new opportunity to help them in the Myrsky project. This project provided us with an opportunity to promote many issues we consider important. As the State Aircraft Factory is part of Patria s history, we want to participate in the restoration of the fighter. This also provided us with an opportunity to put our corporate social responsibility into action, comments Patria s Chief Strategy Officer Jukka Holkeri. Most of the project participants are members of the Aviation Museum Society, and already of retirement age. Consequently, one of the objectives of the project is to transfer expertise on restoration practices to the younger generation. 20 Patria Patria 21

12 Responsibility DID YOU KNOW? Matti Patteri is one of the best-known scale model builders in Finland. His scale models are on display in the collections of the Finnish Aviation Museum, and they have appeared in, for example, the Talvisota (Winter War) film directed by Pekka Parikka. reconstruction would have been virtually impossible. To date, we have mostly been building production equipment, such as a table on which the 11-metre-long wing can be constructed in two separate sections. The fuselage frame of the aircraft, which is made of steel, has been sandblasted and painted, and the construction of the wooden wing is under way, says Patteri. Matti Patteri is currently working on a scale model of Myrsky in scale 1:4. Matti Patteri, Project Manager of the Myrsky project and students from Varia, a vocational institute in Vantaa, and Äänekoski vocational institute. The students are participating in the production of new metal and wooden parts for Myrsky. Assembling a Myrsky fighter is much like assembling LEGO bricks, with the exception that you also have to make the bricks yourself, Matti Patteri says, laughing. We want the young people to have an opportunity to take pride in the fact that they have participated in the reconstruction of a Myrsky fighter. Patria wants to ignite a spark in young people, encouraging them in their future endeavours, Holkeri comments. A SLOW PLANNING PROCESS AND A SHORT SERVICE LIFE A total of 51 Myrsky fighters the only Finnish fighter aircraft to go into serial production were built. Beginning in 1939, the planning of Myrsky proceeded at a slow pace and took several stages to complete, as Finland at the same time tried to purchase aircraft from abroad. However, no non-finnish aircraft that met the performance requirements was available. The various phases of the war and changing alliances also played a role in the process. Finland had trouble obtaining engines. While the prototype of the Myrsky flew for the first time in December 1941, it was only in 1944, during the Continuation War and the Lapland War, that the fighter saw real action. Finland finally managed to acquire engines from Germany from Germany s war booty material but they were underpowered compared with the aircraft s specification. However, Myrsky was a fast fighter and, viewed as a whole, a rather noteworthy accomplishment, remarks Reino Myllymäki, project spokesperson. Myrsky fighters remained in active duty until 1947 when they were grounded. The problem with Myrsky was that it suffered from aeroelasticity, or flutter, an effect that sometimes caused the aircraft to lose its tail section. The Myrsky fighters were manu- A total of 51 Myrsky fighters the only Finnish fighter aircraft to go into serial production were built. factured using low-quality wartime materials that were unable to withstand exposure to weather when the aircraft were stored outside. In 1953, a decision was made to dismantle the aircraft, says Matti Patteri, Project Manager of the Myrsky project. The last intact Myrsky fighter stood beside the Kauhava airfield runway, lost and forlorn, until WHILE THE DRAWINGS SURVIVE, MOST OF THE PARTS ARE MISSING The Myrsky fighter will be completely rebuilt using a combination of used and unused parts, obtained from a variety of sources, as well as parts made from scratch, based on the drawings. Initially, the project team had three surviving fuselage frames available on which to base its work. However, scrutinising the parts list, which even included the screws, revealed that 80% of the parts were missing. Jukka Raunio, who wrote the history of the State Aircraft Factory, managed to salvage the drawings at the last possible moment in the 1990s, when they were already on their way to the rubbish bin. Without them, the YOUNG PEOPLE MAKING PARTS FROM SCRATCH Young people from Varia, a vocational institute in Vantaa, and Äänekoski vocational institute, are participating in the production of new metal and wooden parts for Myrsky. So far, the vocational institutes have been producing production equipment. They have skilled welders who have expressed an interest in the project. For example, while we are restoring old metal parts of the fighter s wings at the Aviation Museum, the vocational institutes are producing missing parts. Students specialising in woodwork have also produced wooden fuselage sheeting. We cannot turn over Myrsky s historical parts to the young people for restoration, but they are very helpful in producing new parts, Patteri comments. At the workshops in Vantaa and Äänekoski, for example, the young people saw aircraft plywood to create wing ribs, gluing them in place. We assign them tasks that match their skills. In some cases, a young person working in a workshop has been accepted for study at an institute, and he or she has continued working with the Myrsky project at that institute, Myllymäki remarks. Some of the youngsters have also visited the exhibition at the Finnish Aviation Museum, viewing the material related to the Myrsky fighter. Poverty-stricken Finland, struggling under difficult conditions during the war, obtained an effective fighter with a rather elegant shape. This project pays a homage to that work, passing on information on the Myrsky fighter to future generations, says Patteri. An animated film telling the story of the Myrsky fighter The city of Vantaa workshop for young people, which focuses on communication and interaction, is making an animated film on the story of the VL Myrsky fighter. The young people brainstormed the plot of the film themselves, and prepared the dummies, props and aircraft before they began shooting the film. The animation project is part of the Myrsky project communication. The shooting of the film began at the same time as I joined the workshop in December. In addition to shooting the film, we have also recorded the sound for it and prepared posters. We have a script for the film, but it is being modified along the way as we shoot it, based on our shared ideas. At the same time this project teaches teamwork skills, says Vili Virtanen, a 20-year old workshop participant. The animated film, approximately six minutes in duration, will be shown at the Myrsky exhibition at the Finnish Aviation Museum, and at various film festivals. 22 Patria Patria 23

13 Opinion Colonel Bo Stennabb Finnish-Swedish defence cooperation a symbiotic relationship or just a symbolic gesture? A report discussing the deepening of defence cooperation between Finland and Sweden was published in February This report was drafted in collaboration between the defence forces of the two countries. Basing their work on a close and committed analysis, the drafters of the report set forth several concrete proposals for cooperation targeted at improving the operational efficiency of both the Finnish and the Swedish Defence Forces. The report lists a number of across-the-board proposals addressing six separate areas: the Navy, the Air Force, the Army, protected communications (C2), logistics and procurement of material as well as joint crisis management units. The key question is whether this report and subsequent political decisions reflects a genuine will for cooperation between the two nations, deemed beneficial for both parties, or if it is just an example of political rhetoric, devoid of any real operational advantages. COOPERATION ALREADY FUNCTIONS WELL Cooperation between Finland and Sweden already functions well and has been under way for years. Cooperation within the scope of NORDEFCO Nordic Defence Cooperation is carried out in the form of skills development, research and training, and by means of exercises and participation in international COLONEL BO STENNABB This article was written by Colonel Bo Stennabb, Swedish military attaché at the Swedish Embassy in Helsinki. The text is based on a joint report drafted by the representatives of the Swedish and Finnish Defence Forces and on a presentation given by Lieutenant Colonel Jan Karlsson, liaison officer at the Finnish Defence Command. missions. The benefits are indisputable individual countries that participate in cooperation will learn from each other, developing their operational skills together. The flagship of this cooperation is the Cross Border Training (CBT), within the scope of which predominantly Swedish, Finnish and Norwegian pilots train together in each other s air space almost on a weekly basis year round. While this joint training improves the operational capabilities of the participating countries, it also sends a signal to our neighbouring areas: if we train together in peacetime, we will also be prepared to cooperate in times of a crisis. In addition, the Navies aim to establish a joint Finnish-Swedish navy detachment: Swedish-Finnish Navy Task Group 2023 (SFNTG 2023). Moreover, we have a long history of engaging in joint exercises, and our two nations participate in the Surveillance Co-operation Finland-Sweden (SUCFIS) in the Baltic Sea waters. We have successfully coordinated our mutual cooperation within the scope of multinational cooperation programmes. Finland and Sweden are both active NATO partners. We both recently signed a Host Nation Agreement with NATO. We are also active participants in the crisis management programmes of the European Union, and together we have formed three Nordic Battle Groups. We are ahead of most of the other EU member countries with regard to participation in various Crisis Management Operations (CMO:s). WHY DO WE NEED TO DEEPEN OUR COOPERATION? Like so many other countries, Finland and Sweden face the problem of financing their defence budgets: salary costs are rising and material, which is becoming ever more technical, consumes an increasing proportion of the defence budget, weakening funding for operational activities. The Finnish Chief of Defence has stated in unequivocal terms that the Finnish Defence Forces will be unable to carry out their mission unless their funding is increased, and, to a certain degree, this is also true of Sweden. Naturally, an important further reason for taking steps towards deepening cooperation is the current situation in our neighbouring areas. Although measures to step up cooperation were already adopted as early as in 2013 in other words, before the illegal annexation of Crimea by Russia and the onset of the Ukrainian crisis Russia had already shown signs of awakening by its behaviour in the Georgian crisis in 2008 and by launching an extensive rearmament programme. The timing of the start of deepened cooperation is a result of several factors: earlier, there existed no need or opportunity for it; now, it is practically mandatory. That, however, in no way diminishes the usefulness or importance of the cooperation that we have now initiated. WHAT IS THE PROBABILITY OF SUCCESS? Targets are set high, and achieving them requires political support, decision-making and, above all, mutual understanding between the countries, and a willingness of the two nations to march in step. Carl Haglund and Karin Enström, former Ministers of Defence in Finland and Sweden, described our relationship on several occasions using phrases such as our countries are dating and getting engaged is not excluded. However, it should be recalled that the current Swedish government has demonstrated an attitude that is even more positive towards cooperation than that of its predecessor, and that it has already made a de facto decision concerning the next step: cooperation will also be continued in a conflict and crisis situation, not only in peacetime. Cooperation has broad popular support among citizens and politicians alike in both countries. The Swedish Defence White Paper (Försvarsberedningen) from 2014 states the following: Sweden and Finland have similar premises with regard to their defensive policies. This Defence White Paper welcomes all plans that seek deepened defence cooperation between Finland and Sweden. It is important to single out opportunities for practical cooperation in those sectors that have already been identified as candidates for such cooperation, thereby improving results and achieving greater efficiency. Cooperation between Finland and Sweden already functions well and has been under way for years. 24 Patria Patria 25

14 In Brief Photos Matti Immonen and Patria Patria Magazine in digital format The new Patria Magazine is now easier to read in digital format www. patriamagazine.fi. For feedback please contact Patria will again provide pilot training to students from Kazakhstan The Kazakhstan Civil Aviation Academy and Patria signed a continuation agreement on the provision of commercial pilot training for a second group of students. Patria will train 14 Kazakh students, chosen from around 50 applicants, by the end of Training will begin with theory instruction and the students will travel to Finland for flight training in June Upon the completion of their training, the students will receive commercial pilot licences (CPL) with multi-engine and instrument ratings, in compliance with European regulations. The students will also receive full Airline Transport Pilot License theories and Multi-Crew Operations training. We are delighted to have signed a continuation agreement for international training with the Civil Aviation Academy. The agreement is a sign of the trust our client has in the quality of our training, says Mikko Paronen, CEO, Patria Pilot Training. Patria achieves good ranking in anti-corruption study Patria s products at DSEI in London Transparency International UK has published the Defence Companies Anti-Corruption Index 2015 study, in which Patria was ranked in category C, the third-highest category. The companies were evaluated on a scale of A F, with A being the best, based on public information. Separately submitted internal materials increased Patria s ranking to category B. We are pleased with the results, since we have been systematically developing the various sectors of Patria s corporate social responsibility since Our principal focus has been on highlighting the importance of ethical operating methods and anti-bribery measures. Our entire personnel now participates in online training each year, and we have also promoted ethical operation in our subcontracting chain. CSR is a broad field that requires continuous development on all sectors. Our operating environment is constantly changing, which requires active CSR development work on our part. We are on the right path as a responsible operator in the defence sector, says Patria s CEO Heikki Allonen. Patria showcases its products at the international defence and security exhibition DSEI being held in London on September Visitors to the exhibition can see Patria AMV XP armoured wheeled vehicle and Patria Nemo training simulator. Millog presents its optronic products. The venue is the ExCel exhibition center. Patria s stand is on exhibition lot 6/N Patria stand N6-160 See you there! 26 Patria Patria 27