," this week on "defense news fallout from the turkey coup? top trends in aerospace. welcome to "defense news." i am july tomorrow, and -- i am jill aitoro, and here are the top headlines. in her first address to the house of commons since taking office, following the eu referendum, new british prime minister theresa may warned that the threat from nuclear weapons was increasing and said it would be an act of grossed irresponsibility to abandon nuclear deterrence. defense secretary ash carter convened top military officials last week to discuss the two-year-old mission to oust the islamic state from iraq and syria.

opted out of the meeting in washington of the global coalition from the latest sign that the pentagon's military relation with a key middle east ally may be suffering in the wake of the failed military coup. residentn with a senior fellow at the atlantic council and asked, how vulnerable is the tricky military in the wake of the -- turkey military in the wake of the coup? >> i think the turkish military will have capacity problems. they are heavily deployed in the southeast in an ongoing entrances he campaigned against the bk -- ongoing insureds and see campaign against the pkk. and now they're being asked to root out coup plotters. their counterparts may be suspected coup plotters. turkey has a lot on its plate going forward. so what -- jill: so what you expect in terms of nato? >>

the nato mission but obviously a lot of the nato countries are involved in the coalition, acting independently in their own capacity. any air force base is hosting a ilt of the counter-is airstrikes and was effective for the fx have since resumed. -- the airstrikes have since resumed. jill: turkey has military and procurement programs going on. how might those be impacted in the near term from this whole situation? jill there is th -- >> there is a procurement board and it ultimately depends on the president, erdogan. he has a lot of things on his plate and things like these are less of a priority. jill: frequency programs delay potentially -- we could see programs delay potentially? the united states is

an interesting place -- typical place with turkey. >> united states is in a difficult position because turkey accuses a self exiled cleric of orchestrating this coup. should turkey file the paperwork for his extradition -- turkey has demanded they hand him over but there is bureaucracy and if they go through with that come this will become a diplomatic headache more on the state of our level than the defense department. -- state department level than the defense department. jill: challenging because the united states considers turkey an ally, and important ally. how much of this is politics? >> turkey is a difficult ally within the nato context. there are questions about erdogan and his commitment to democracy. we have to lay on top of

turkey remains important for a lot of things we do around the world. it is a difficult balancing game for how we manage this relationship. jill: by all definitions, the coup failed ultimately what this inake from terms of the message of where turkey is an out and what in terms of how we respond to these situations going ahead? has revealed fragile institutions including the army could the assumptions everybody made about turkey included that, yes, it was a troublesome ally, but ultimately, it was stable. i think we have learned that yes, it is a troublesome ally. there are autocratic tendencies of its leader. it is unstable. jill: should we have seen this coming? >> hindsight is always 2020. you can look at th

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jill: welcome back to "defense news." during a recent airshow in the u.k., "defense news" italy correspondent sat down with mauro moretti, ceo of leonardo finmeccanica. he asked about the potential benefits of the country's recent restructuring. it was the first sign that actually was the right one. all the capabilities, all the resources of the previous companies. the only one

with better use of resources. the results are quite interesting because at this time , positive net results. and also, quite important, important reduction of debt. direction of the decisions. >> looking ahead now, what kind of markets and products should lead out of the mechanical be focus -- should li na of an mechanical be focusing on to maintain these results? >> you know we have lots of businesses and where focus particularly on defense and security and within it, electronics, and the right sense -- cybersecurity ando

, aircraft. and directly in the family, we have a very important position today, maybe the most important for the biggest fighter in the world. >> one of the consequences of your big restructuring has been a reduction in your senior management headcount. how has that benefited your decision-making speed? do you have fears that there has been loss of knowledge due to this? >> we can give the opportunity to explain

i consider that, every, every guy can create up to 45 years. we need to give the opportunity to take the company enhance and in this case, the industrial culture based on the digital revolution to have the opportunity for the future to play an important role. we don't have particularly a abandon of the company because we are very, very old generation come up to the 70's. >>

another big theme here at the show has been brexit, the departure of the u.k. from the european union. you are an italian company with a big footprint in the u.k. do you see problems and in the long-term any benefits from this? >> short-term, obviously, we don't consider that we have particularly change, but in the medium long, opportunities for the u.k. to reflect on re-think on strategy that is -- that was particularly direct to the u.s. capabilities. i think that the opportunity to reconsider domestic capabilities, the importance. high skilled people, the sector i work in in the

, becausertant legacy specifically,.k. the basis to create the future, very high-level work. enginector is a sort of of innovation. i think the u.k. has to take care. >> a company like leonardo can mechanic a -- leonardo finmeccanica has exported in the past two countries around the world who are trying to focus more on building up the domestic defense capabilities. is that considered to be a threat to your sales and how do you tackle the challenge? better, to

countries -- italy, u.k., u.s., poland, and considering the future the opportunity maybe for the european union defense policy. particularly for investment in r&d. think of an to important global market. medium-sized and little sized countries. and i control systems for a lot applications, so forth and so on. capabilitiest after the

having in the nato 28 center in europe. we have to balance the situation . obviously, important domestic countries can help us the development of the new products and systems. of also, taking care customers could be the key to develop our position. jill: when we return, more from our intervie

jill: welcome back to "defense news." now from our italy correspondent's interview with mauro moretti, ceo of leonardo-finmeccanica. they discuss the company's chances in the trainer competition in the u.s. >> our trainers are the best.

influence ofical the other competitors. visible ineady operation. need,ld the other, they maybe, five or six years, and threat of the united states is not the best way. opportunities, i consider that the americans also have to consider the support of , afghanistanies particularly. , to create theay right partnership, the industry could be the way to maintain this partnership. >> i want to ask about the news

leonardo-finmeccanica, and ask your reaction to that news. >> the indian decision, i think that with a patient and clever india -- and ever since, reopen, and we already cut --l out effort to shout to the indian authorities era inmitment for a new the relationship. consider that we can help a lot with everything. we are

position in partnership with indian companies. >> ok. you are now holding onto drs, your u.s. electronics unit. in theans do we have future in terms of the new markets or products? >> first of all, we have to conclude the round of drs, give to be strongility enough to compete with the others in the market. on the sector for business of drs. then we would like to maintain control but we are open in using the

49%, to create opportunities for partnership or financial relations. we would like to better use resources to increase our presence in the u.s. after the positive results, economically and financially. now is the time to grow. >> in the u.k., you have just announced you would create a new corporate front office to have a better relationship with the u.k. government. how important is the relationship? because theortant right relationship with the military authority is most important. we would like to create a dynamic relationship with our

people -- we have to discuss directly the business in the right way. for this we are creating a new in the u.k., using and managings director, second managing director, to give the opportunity to link with the business. -- to a way to recognize give the opportunity to better know the leonardo organization, integrated is quite important, maybe the second offense company in the u.k.

explain our potential. "moneyn this week's minute," a personal offers tips on how to establish credit. >> many service members graduating from basic training are at the beginning of their financial life. if that is you and you need a car or home of your own, you will have to take out loans. those loans require establish credit could be good credit history doesn't happen overnight, but there are some ways to get started. when you enter the military you have to open a checking or savings account with direct deposit. if you is with a financial institution that offers credit cards, ian king that i count in good standing for six months. -- maintain that account in good standing for six months. then you can apply for a credit card to establish credit. you learnedscipline in boot

on time. this goes a long way when it comes to evaluating your credit when you are applying for a loan. once you establish credit, make sure it stays in good standing by only using credit for what you can afford and only using a small percentage of the available credit. eventually you will have the good habits and credit history that can help you achieve your financial goals. jill: thanks. we will see you next week. when we i've been an army paratrooper for twelve years. i've logged hundreds of jumps in the course of my career. for the past six years i've been a navy federal member, too. thanks to my go rewards credit card, every time i pay for something like this, i'm earning rewards. if you get scared big guy, cliff and i got you. cliff's been driving a boat for six months pretty solid now. para-sail-ing! here we go! open to the armed forces, the dod and their families. navy federal credit union.

jill: during the air show in the u.k. earlier this month, "defense news" associate editor spoke to dave melcher, ceo of the aerospace industries association. he asked what were the top trends in military aerospace. >> there is a reform effort going an hour colleagues are part of the dialogue to establish ways to make the process a little more expeditious in order to bring american capabilities to our partners and allies in a much quicker fashion.

improvements that have to take place, everybody is positive ont competitiveness rides our ability to be successful. >> when you talk to people in the pentagon and commerce department and state department, do they understand that as well? >> absolutely. more than in previous years, and all themmerce, dod, folks who have to bring us together, including congress, recognizing that american success depends on our ability to rapidly bring products to customers. 2 years will not work when the competitors can offer it in months. we have to have a process that matches that desire. >> you talk about competitive. a lot of former customers are becoming competitors in certain areas. how concerned are american companies about that, the rise of potential competitors? >>

isr andace and in sir-- space and unmanned systems, you are seeing a rise in competition that will challenge american companies internationally. but if we expedite our processes and operate team usa, we will get through all of that because the customers want our products, they are great capabilities, and if they are timely they will accept to them. >> one-way american companies have looked to help with competitiveness is to work with international companies. is that a trend you are seeing happen as well? >> absolutely. one of the themes of the show and a theme for us of the show is partnerships did you are seeing companies realize that to be successful in the international market, you have got to have a partnership with companies that produce and manufacture some of the parts. if you are building a nose -- maybe you are building in those countries. and you have to work

proving your ability to be successful economically and that is part of the picture. >> one of the big partners in the u.k. -- a lot of industrialization back and forth. we have had the brexit, there is new government. how concerned are your members about that? >> it is a little early to tell about the show -- tell at this show because the news has just broken and the new prime minister has been appointed. industry leaders and government leaders from the u.k. and the united states all have a desire to make this work and maintain international relationships and partnerships and maintain the success we have had and certainly for 100 years we have been very close allies. that will not change. what may change is the exact mechanism whereby trade is accomplished here in the european union and other countries in the region. >> the undersecretary of acquisitions says he thinks there shouldn't be a big military change in the u.s. and the u.k. going forward, how are companies handling it?

may have to be changes in the future. >> i think every company will take stop of its -- take stock of its operations, whether it is the united states through the u.k. and into europe and determine what is the best way forward. in practical terms it will not change anything on the business front immediately. the partnerships are established letthe contracts are being and the companies are manufacturing and it is more of a policy issue to, little bit later as a result of brexit. >> it seems like industry is more confident that we have hit especially spending, in the defense area, and that we will see growth in the future. is that what you are hearing as well? >> absolutely. sequestration and the bipartisan budget agreement that followed it led to a trough in defense spending that pretty much leveled out in 2016. as we go forward, there is slow but steady growth on the defense side. on the commercial side, represented

commercial orders continue to roll in. i think companies are optimistic because they did the belt-tightening measures they needed to maintain profitability, which sets them up very well for growth. >> speaking of growth, what are the areas you see growth? you mentioned to some capabilities, but what are the defense sectors you are looking at and saying these are where you are going to see things expand? >> no doubt that intelligence, surveillance, and reconnaissance , that continues to be an area of growth. and man systems and applications that go on unmanned systems will be an area of growth. data analytics, using all the information that is available tohin this giant network best advantage is going to be an area of growth. and i think more autonomous operations and perhaps manned, unmanned teaming to accomplish things with maybe less risk in the human element. all those will be areas that will be inve

>> it is part of the big third offset. how is the industry working with the pentagon on that? >> had a number of meetings with the secretaries about third offset. i think coveney's are focusing their investment strategies now to target many of those areas that have been identified as important. these companies are also working with silicon valley, just as the department is working with silicon valley, to try to find opportunities to extend capabilities because there is enough challenge out there for everybody to tackle it. >> should we expect from the silicon valley companies to be joining your organization as well in the future? >> a couple already have and the trend will continue, mainly in -- due to the relevant man systems, which you know many companies are many interested -- very adjusted in developing their own capability. it is a regulated market place because the work we do with faa and the department of defense could we have a lot of experience in that area.

jill: that is all for this week. thanks for joining us.

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