QinetiQ CEO Love Removed As Effects Of Nimrod Crash And Performance Analyzed

QinetiQ’s CEO, Graham Love, was removed yesterday and replaced by Leo Quinn. Mr. Quinn has a history of turning businesses around in both England the United States including Honeywell. Mr. Love will remain until November 30th.

Love has been the head of QinetiQ (QQ:LSE) for eight years guiding it through a transition from a private corporation set up out of parts of the English Ministry of Defence’s test facilities and organization to a public company which invested heavily in growth in the United States. QinetiQ in fact over the last two years has seen the companies profits driven heavily by their acquisitions and work in the U.S.

This focus on overseas has led to large profits for the company while it has moved to divest itself of some of its original assets. At the same time it remains a significant part of the English defense industry where it is participating in a plan to privatize the military’s training. Love will remain working for the company as a consultant on this contract, Defence Training Review.

The English Government has begun to re-think this contract and that might have played a role in Love’s removal. There are problems with the cost of the plan and credit issues that may lead to a change in the plan.

QinetiQ has also received criticism in a recent report on the crash of Nimrod reconnaissance and surveillance aircraft in Afghanistan. This accident led to the death of fourteen crew members. The most British lives lost at one time since the 1982 Falklands War. QinetiQ’s role in safety and testing was attacked in the report as not identifying problems that led to the crash and putting equipment and practices in place to prevent it. If measures had been taken after an earlier incident the accident might not have happened.

It is hoped by the company and stock market that the change in leadership will help the company at least recover some of their good relations with the Government and customers. The stock shot up after the move was announced.

The problem a defense contractor faces that one incident like this with the accident may sour military and governments on their capabilities and abilities. This past performance is often considered in awarding contracts and even though this may not relate to the actual work being bid on or performed it can seriously affect attitudes which may make it harder to win work. Often such a change as this helps restore some of the good will earned over time.