http://indiatoday.intoday.in/story/...d-improve-productivity-overhaul/1/418588.html HAL needs an overhaul Manmohan Bahadur February 12, 2015 | UPDATED 20:03 IST The website of Hindustan Aeronautics Limited (HAL) has the photograph and biodata of its new chairman-nothing odd about this, except that around him are aircraft models that exemplify what's wrong with HAL: a Tejas fighter that achieved Initial Operational Clearance after 30 years of programme inception, a fifth-generation fighter aircraft that is embroiled in controversy with the Russian co-developers, and an Intermediate Jet Trainer which has been stillborn. HAL was established with the hope of making India self-sufficient in the manufacture of military aircraft. Starting with the HT-2 basic trainer in the 1950s and graduating to designing the HF-24 Marut with the help of Kurk Tank, the beginning was not inauspicious. The government backed it with liberal funding but the company never took off as desired. The result, after seven decades, is that Indian military aviation is predominantly, if not almost fully, equipped with imported or licence-built aircraft. Where it leaves the nation's strategic autonomy is anyone's guess but before suggestions for sorting out the mess are discussed, a comparison with Embraer of Brazil would lay the foundation of the arguments. Embraer, set up in 1969 as a state-owned firm, was a good two decades behind HAL. Privatised in 1994, its profit before tax (PBT) in 2013 was Rs 35,809 million with deliveries of more than 5,000 aircraft worldwide. Embraer focuses on small commercial and business jets, exports the Tucano and Super Tucano military trainers (including to the UK and US) and stays clear of helicopters, engine manufacture and overhauls. It is an efficient integrator and with a lean workforce of 19,000 its productivity is Rs 18.57 lakh per employee. HAL, on the other hand, is a state-owned behemoth and barring miniscule exports to a few countries, its customers are captive-the Indian armed forces. With a PBT of only Rs 35,780 million, its 35,000-strong force has a productivity of just Rs 10.2 lakh per employee! With no market competition, quoting it as an example of inefficiency would be a gross understatement. It is time to drastically reform HAL through a structured plan. Firstly, though HAL is not in the same league as Boeing or Airbus, it has a finger in all types of aviation, and in space too; HAL needs to be re-structured to become a true aircraft integrator, with many divisions hived out to make independent manageable firms. Thus, its engine divisions, accessories and helicopter divisions, which incidentally has had success in the Advanced Light Helicopter and Light Combat Helicopter programme, should be made independent entities; the space division could well be given to ISRO. Private players need to be brought in on a risk-sharing basis to usher in professional project management and accountability, a term alien to HAL's work ethic and culture. Should HAL be running a helicopter training school and a management training academy in Bangalore? The government's involvement, thus, needs drastic reduction with only a 'golden share' to be used in national interest. Secondly, decide whether HAL should design aircraft, or DRDO. The Aeronautical Development Agency (ADA), another monolith under DRDO, was created to design the Light Combat Aircraft (LCA) even though an Aircraft Design Bureau exists in HAL; this bruised a lot of egos resulting in a rocky transition to manufacturing at HAL from the design and prototype testing stage at ADA. Steps must be taken to retain expertise and institutional knowledge generated from the costly LCA programme for use in subsequent projects. Incidentally, when there is an HAL and an ADA, is the National Aerospace Laboratory needed? Pray, what useful work has it done except on the ill-fated 14-seat Saras project? And now it is believed that a new 'vehicle' is being created with HAL to design a 70-90 seat aircraft! C'mon, someone must be joking! Thirdly, the DNA of the aircraft designers' pool needs to be invigorated. It is time to infuse fresh ideas and energy by appealing to the Indian diaspora, which is doing wonders with foreign aircraft manufacturers and design agencies such as Defense Advanced Research Projects Agency and NASA, to return home as the Chinese have done. It goes without saying that salaries would have to be commensurate with the expertise sought. Disinvestment would enable this. In the interim, India must realise that, with 70 per cent of its armaments being imported, it still retains a buyer's clout that should be exercised to demand technology. Fourthly, HAL (and the new companies hived out) must be headed by aviation professionals whose credentials must be indicative of the government's acceptance of the fact that the aviation R&D and manufacturing sector needs drastic intervention and not band-aid prescriptions. Lastly, if one throws a stone from the HAL airfield in Bangalore, nine times out of ten it will hit an aerospace establishment; these multitudes must be made answerable for India's shameful tag of being the world's largest arms importer. And shouldn't the Department of Defence Production, whose task it is to set and monitor policies, be guilt- and remorse-free?