Thales, Inc.

Dr. Lawrence J. Cavaiola

Chairman and CEO

Dr. Lawrence J. Cavaiola is the Chairman and CEO of Thales, Inc. Appointed to the position on June 4, 2001, Cavaiola represents the company's roughly 35 North American units. He has established a permanent presence in North America over the past 35 years and specializes in providing dual-use professional electronics systems and services for a multitude of applications.

Cavaiola was previously president of the Northrop Grumman Litton Ship Systems Full Service Center and held senior positions with Loral Corp. and Lockheed Martin. Before moving to the private sector in 1995, Cavaiola held senior government positions with the U.S. Congress and Department of Defense, including deputy under secretary of defense for Acquisition Operations.

Thales Inc., the North American headquarters, is located in Alexandria, VA. With more than $10 billion in revenue for 2001, 65,000 employees and a domestic presence in 50 countries, Thales is a world-leading provider of secure civil and defense solutions

Q: Thales refers to itself as the "partner of choice" in the United States. How does this position reflect Thales' global strategy? How important is the U.S. market within that strategy?

A: We see the United States as very important to all three of our business areas - aerospace, defense, and information technology and services (IT&S). North America accounts for 12 percent of Thales, sales, up from 10 percent last year. Our approach is to grow gradually in the United States, as we have done in the United Kingdom. This involves a variety of activities - teaming, partnering, and forming joint ventures such as Thales Raytheon Systems (TRS) with Raytheon and Aviation Communication and Surveillance Systems  with L-3 Communications. We also consider external growth opportunities that fit into our global strategy.

Q: Among Thales' North American activities, in what specific area do you see the greatest potential for domestic growth?

A: We look for sustained North American growth in each of our business areas. Our commercial aerospace offerings span the spectrum of operations from training and avionics to in-flight entertainment and air traffic management.  Diversity within our IT&S companies permits us to address several sectors, such as positioning, secure operations and component supplies. In defense, we focus primarily on defense electronics but also include systems such as sophisticated mortars. Growth in defense will come about by understanding and following our customers' rules while performing as a reliable teammate and partner. In these ways, we expect to grow our defense business significantly over time.

Q: Homeland security is a high priority in America today. Is Thales currently involved in any domestic security applications?

A: Thales has a number of products and services that will help improve homeland security. For example, we are the preferred supplier of security cameras onboard Boeing commercial aircraft. Police, firefighters, first responders and numerous government agencies involved in the war on terrorism use Thales Communications Inc. (TCI) radios. Also, TRS' Sentry radar helped protect the Winter Olympics.

Q: Apart from the TRS joint venture, does Thales own defense companies in the United States? If so, how does Thales protect sensitive U.S. information?

A: While several of our North American companies sell products commercially to the Department of Defense (DoD), we have two companies that deal particularly in defense: TCI in radio communications and Thales Training & Simulation Inc. (TTSI) in military/civil simulation. Thales has an excellent record in the protection of classified/sensitive information in the United States and worldwide. We operate TTSI under a special security agreement and TCI under a proxy board. Both arrangements, prescribed by the DoD Security Service, ensure that classified and sensitive information is protected while the companies are permitted to operate efficiently and effectively as true U.S. companies, though foreign-owned.

Q: Much is being said about possible allied cooperation with the United States on missile defense programs. How might Thales contribute to such an effort?

A: Our understanding is that the United States desires access to the best technology available for missile defense. To that end, discussions have taken place regarding possible European participation in the ongoing missile defense work led by the Missile Defense Agency and major U.S. defense contractors. Thales makes significant contributions to European ground- and sea-based air defense systems in the areas of advanced radars and command and control. We also supply electronics for missile systems through our participation in the TRS joint venture. We also contribute to air defense command and control systems in a number of countries worldwide. Since many of these same capabilities would be of interest to the development and deployment of missile defense architecture, Thales would like to contribute to this effort.