Theo Kleynhans acting DSA CE

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A special meeting of the board of Denel Saab Aerostructures (DSA) on Friday has appointed Theo Kleynhans as the new acting CE of the aerostructure design and manufacturing company.

In a statement issued at noon today, the company said the board is seeking a permanent CE “as a matter of urgency.”

Kleynhans is currently the Chief Operating Officer and boasts extensive expertise in the aerostructures manufacturing industry. At Friday’s meeting, the Board expressed its confidence in Kleynhans’ ability to maintain momentum in executing DSA’s vision of being the reliable African link in the global aerostructures supply chain, and to simultaneously continue with the turnaround of the business – ensuring that it becomes a self-sustainable world-class aerostructures company.

In living its vision and values, DSA will continue to strive to provide on-time service, quality and value for its customers, thereby creating a prosperous company for both its employees and owners, the statement added.

To this end, one of the company’s key focus areas remains business development. Gilbert do Nascimento, Business Development Executive Manager, confirms that a number of initiatives are currently being implemented at DSA. “We are strategically enhancing our approach to the marketplace, positioning ourselves as a global and respected aerostructures company, and continuously engaging with both existing and potential customers.”

He adds that DSA “finds itself with a wealth of human talent and world-class facilities which need to be converted into opportunities and contracts. This conversion will not only sustain and grow our capabilities, but ensure DSA’s presence is felt in the international marketplace as the company integrates seamlessly into its customers’ supply chain.” Do Nascimento joined the company late last year from Carl Zeiss Optronics, a successful Denel joint venture.

In July 2008, DSA embarked on an aggressive turnaround strategy so as to streamline the company’s processes, maximise efficiency and reach an internationally bench-marked competitive position. This has already resulted in significant operational improvements and correspondingly bolstered the company’s competitiveness.

DSA CE Lana Kinley and chief financial officer Sasa Methola resigned on January 12 after a disagreement with the board.

DSA posted a loss of R452.6 million for the year to March 2009, largely because of delays in the Airbus Military A400M programme. Last month the Solidarity trade union said the company was as a consequence preparing to retrench about 119 of the employees.

The Solidarity trade union last week said the resignations were causing warning lights to flicker at the company. “These resignations come shortly after the company’s announcement in December that the company plans on retrenching 15% of its workforce,” spokesman Jaco Kleynhans said.

Kleynhans says the union is concern over the stability at DSA because Kinley’s resignation allegedly follows after a difference of opinion between her and the DSA board, headed by Llew Jones, previously CE of the State IT Agency. “Losing two experienced top managers at the same time due to an alleged disagreement, with the board in the midst of a retrenchment process, is definitely cause for concern,” says Kleynhans.

But the DSA board said Wednesday it was “business as usual” at the company despite the resignations. The board and DSA parent Denel in a statement said operations had not been affected by the resignations and that there was no reason for any concern over the stability of the aerostructure manufacturing company.

Denel group CE Talib Sadik also described Solidarity’s take on the extent of government’s financial support of the parastatal as “regrettable” – as incorrect figures were subsequently stated in the press. “The Denel Group has received R3.5 billion in financial aid through recapitalisation and R1.85 billion in government guarantees over the past four years, and not R8.82 billion as reported in the media,” said Sadik.

But later on Wednesday another trade union,the United Association of South Africa(UASA) expressed concern over the situation at DSA. Commenting on the resignations as well as retrenchments, Willie van Eeden, the UASA sector manager responsible for Denel workers said the union found the “situation unacceptable and we will not allow our members to be subjected to this kind uncertainty caused by poor management decisions.”

Van Eeden added that if “DSA is allowed to close its doors, it will have an adverse effect on Denel business unit Turbomeca Africa (TMA) which is dependent on special processes supplied by DSA.

The poor performance of DSA has a direct effect on TMA delivery times, which may result in TMA closing down production lines within the next 12 to 18 months, depending on what the TMA Board will decide in March/April 2010.”

Kinley has so far declined to comment on the reasons for her resignation or how long she had thought about doing so before resigning, Business Report newspaper added.

She said she did not have any plans for her future at the moment but “will sort that out soon”. Her last day at DSA will be February 11.



Pic: An Airbus Military A400M military transport wing-to-fugelage fairing on the DSA production line. Delays with the project as well as the 2009 global recession has cost the company dearly, triggering cost saving measures including possible retrenchments.