Interview: Ergün İşgör, the General Manager of TTAF Defence
Although it is a recently establish company, TTAF Defence has, by transferring the experience of its sister company TTAF Elektronik, and through the contracts it has signed, formed close relations in a short time with different players of the sector. Like all Small and Medium-Sized Enterprises (SMEs) in the sector, where a plan for growth and development is necessary, TTAF Defence already set its plans for the future. We talked about TTAF Defence’s establishment, development and future plans with Ergün İşgör, General Manager of TTAF Defence.
MSI TDR: On which projects are you currently working?
Ergün İŞGÖR: I would like to answer your question by listing our activities on a company basis:
- For TAI, we are producing cable harnesses for the ATAK helicopters. We have produced all the test harness for the HÜRKUŞ.
- For Otokar, we are producing cable harnesses for both their commercial and military vehicles. On the military side, we are producing the cable harnesses for the COBRA, COBRA II and URAL vehicles, and the ALTAY tank prototypes. We produce somewhere between 70 to 80 percent of the cable harnesses in Otokar’s military vehicles.
- We’ve begun working with FNSS. We are designing harnesses for the vehicles to be sold to a country located in Middle East. Additionally we are going to manufacture distribution boxes for some other vehicles.
- Another one of our important customers is Nurol Makina, with which we began working towards the end of 2014. We received an important project from Nurol Makina, and performed all the cabling and framing work for the second and third batches of the EJDER TOMA vehicles. We completed our delivery and are now waiting for a new order.
- For TCI (Turkish Cabin Interiors), we produced the cable harnesses and panels for the galleys that the company developed for Airbus’ and Boeing’ models, and have completed all deliveries.
- With ASELSAN, we are now working with the SST, HBT, and REHİS Vice Presidencies. They are satisfied with our quality and delivery program. Two of our design engineers are working at the SST Vice Presidency.
- We have worked with ROKETSAN on the cabling of the TR107 rockets.
- We are an approved supplier for HAVELSAN; however, we’re not working on any project with them at the moment.
- We will soon start having meetings with BMC. We want to take part in new projects.
From a business volume standpoint, Otokar and TAI are our two main customers. Both companies are extremely pleased with our quality and our adherence to delivery dates.
MSI TDR: What would you like to say about your approach towards the sector?
Ergün İŞGÖR: My team and I originally came from the defence industry. We know the managers of the main players in the sector, just as they know us. That’s why we really understand what our customers want. We submit our offers by knowing, beforehand, what the sector needs and the project requirements. During the offer submission period, we do not pursue projects aggressively; we don’t try to get every project and every single job. We are enhancing our capacity every passing day; however, we know that if we try to take on an amount that is above our capacity, we might not be able to deliver on time. That is why we only make offers for projects that are in line with our capacity and capability, and try to complete them on time.
Our Goal is to Become an International Player
MSI TDR: Looking from outside, due to the nature of its activities, TTAF Defence is not a company that sells off-the-shelf products. Based on this picture, how do you position TTAF Defence? Do you say, “We have advanced design and production capabilities, and companies just come and give us work,” or are you trying to become the strategic partner of various companies in order to constantly work with them?
Ergün İŞGÖR: It is a bit of both. In this sector, you first have to develop and prove yourself. We think that once you have done this, a strategic partnership, whatever that means, will emerge by itself. In the contracts that we’ve been awarded so far, we have always been invited to tender, based on our references for other work; despite this, in none of these tenders have we been told from the outset, ‘this will be yours.’ We always won tenders through competitive pricing and the delivery conditions we offered. For example, even though in certain projects the prices we offered were higher, we were able to win because our capacity allowed us to deliver earlier. Although it was an eight week job, we were selected for it because we promised delivery in two or three, and the timeline of the project was quite constrained. On the other hand, there are also times when we lose because of our longer delivery schedule.
Our objective is to become an international player within four or five years and regarding this, we see Mexico as a target country. As you may already know, Mexico engages in significant production for commercial aviation. Boeing’s largest sub-contractors are located in Mexico. How can we compete with Mexico? We’re thinking about this. How can we ensure a cost advantage? How can we better motivate our personnel? How can we increase our capabilities? Today, a Turkish company, a Turkish SME, should be able to work directly with Boeing. To achieve this, we want to move ahead with support from the SSM and TAI.
In this context, offsets are an important tool for us. We’re looking at what share of the foreign companies’ offset obligations we can capture. To this end, in April we took part in a summit in Seattle, organised by Boeing. In addition, we also participated in the Aircraft Interiors Expo event in Germany.
One of our greatest advantages is that we do not employ any personnel who have previously worked for our competitors or customers. In addition to our experienced personnel, we also recruit people with little experience and train them. And this is how our workforce was able to grow, reaching its current size of 60-65. We could have chosen to increase our staff by following a different approach, and have easily reached 120; however, we prefer following a more ‘apprentice-foreman-master’ approach. Our company possibly have the lowest average age in its field. For example, working overtime two days in a row can be a problem for companies with a higher one. We have a young and dynamic team. Whenever the customer asks for something, we can respond very quickly. Whenever there is a request, we can get back to the customer or solution partner within a few hours. That’s our management philosophy. We also attach great importance to training. From managers to the lowest-ranking operators, we spare no expense on training.
MSI TDR: What can you say about the share of work you are currently receiving from projects in the sector? Can you tell us about your general turnover figures?
Ergün İŞGÖR: It is not really possible to make a proper assessment and give definite figures about our current work share [in the sector] but I can say that for our prime contractors, in our area of activity, we rank amongst their first two suppliers.
Our objective is to supply products for land, air and naval platforms. We currently don’t have a presence in the area of naval platforms. One of our objectives for this year is to receive projects for naval platforms.
Following our establishment, we achieved a turnover of $3 million in our first year. By the end of 2015, we nearly reached a turnover of $8 million. Our objective is to reach at least $10-12 million by the end of this year.
MSI TDR: There are other companies in TTAF Defence’s area of activity. Which skills or features distinguish your company from them?
Ergün İŞGÖR: First of all, to do business in this sector, you have to be an approved supplier for prime contractors. Becoming one is a long and tedious process. They come to your offices with a team of 10 or 12 that includes staff from the departments such as purchasing, quality, production and administrative affairs, and have to go through an audit that sometimes lasts three days. Then they prepare a report, and notify you of any shortfalls that require action. Until now, we have passed all our audits in one go and on the same day, with no second audit being necessary. There are a number of reasons for this. First of all, we are a young team. Secondly, we are a company that’s eager to learn. We have a team that is thirsty for knowledge. Our experience – for example and the fact that I have been in this sector since 1990 – is another advantage. I have worked at TAI for 13 years, at FNSS for two and a half years, at AYESAŞ for eight years, and at Nurol Technologies for seven months. Many managers in the sector are at the same time my friends, and we tend to support each other, while still abiding to the rules of competition. The same is valid for our competitors. For example, recently one of our friends needed a hand tool for an urgent job, which we willingly lent. I know the sector very well. And at the higher levels of management, our Chairman of the Board of Directors and the Vice Chairman know the sector and the business very well too. We could say that the ‘gears interlock perfectly.’
The fact that we’re part of OSTİM is another advantage. Physically, we are basically midway between all the prime contractors. Our infrastructure is very new. The tools, equipment and machines are all one or two years old. When investing in infrastructure, we first look at quality, and then purchase quality brands. By the middle of this year, we plan to increase our current infrastructure and human resource capacity by approximately 70 percent because there are many potentially significant areas of work, and recruiting personnel and training them is a time-consuming process. That’s why we want to be prepared, and are working really hard to ensure this.
New Products Around the Corner
MSI TDR: Could you tell us about the activities you conduct in the civilian and export market and about their share in your overall activities?
Ergün İŞGÖR: Activities related to the civilian area make up about three to five percent of our turnover. We produced cabling for TCI’s galley products, and have gained significant experience in this area. In fact, during the product acceptance process, engineers from Airbus saw our facility and really admired our company. They said that we could easily do business in the international market.
To work directly with commercial aviation, you first need to have specific certifications. We have now started working on getting these. We want to become the first Turkish company in the area of cabling to have acquired these certificates. Our goal is to raise the share of commercial aviation in our turnover to 25-30 percent. We are also closely following the Regional Aircraft project.
MSI Turkish Defence Review: What can you say about your export objectives?
Ergün İŞGÖR: Right now, we are not doing any exports. However, our goal is to raise the share of exports in our turnover to 30 percent. To ensure sustainability, we need to turn to overseas [markets]. If we can demonstrate our products, I think that we can make headway with exports.
On the side of defence and aerospace, there is work that we can get through offset commitments. On the civilian side, there is no offset equivalent. Moreover, quality and competition are both becoming more important around the world. We are confident in ourselves. We believe that we will be able to make exports based on our quality and price advantage.
MSI TDR: You describe your philosophy as “doing the right thing,” rather than just “doing things right.” In this context, what kind of a future do you foresee for TTAF Defence? How will get the right projects?
Ergün İŞGÖR: Let me give you an example for this: Regarding the prototype products we are preparing for companies in other countries that we are meeting with right now, we not only designed a prototype according to their documents, but we have also made another prototype that includes certain corrections and improvements to the design we thought were necessary. Our customers looked to us and said, “Why have you done this [i.e. design two prototypes at the same time]? Did you have too much money or too much time on your hands?” We wanted them to compare the two prototypes and make their decision accordingly. Some of the companies with which we have used this approach chose to continue with their previous design. After a while, companies can begin to experience a form of blindness. This is particularly so if the company has been in the business for 30 or 40 years, and has personnel that have worked for so many years, they are no longer able to see clearly evident design shortfalls. It is certainly more effective when an outside perspective says that certain things need to be changed. Projects in the defence and aerospace industry are long-term. The images/templates used in production are sometimes 40 or 50 years old, and changing them can be somewhat difficult. Rather than conducting production based on an existing image/template, we prefer to act proactively.
MSI TDR: Do you plan to diversify your areas of activity in the future?
Ergün İŞGÖR: Certainly. There are a number of products in aviation that are still not produced in Turkey, particularly in the area of commercial aviation. The most significant share of exports will belong to commercial aviation. We are working on a number of products that are not produced in Turkey. Getting certification will also help clear the way for these activities. Right now, we have just started working on the subject of certification. Particularly when starting preliminary activities with civil aviation authorities and with consulting companies that are experienced on this subject.
On behalf of our readers, we would like to thank Ergün İşgör, the General Manager of TTAF Defence, for taking the time to answer our questions and for providing us with such valuable information.
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