BERTRAND MAROTTE

Globe and Mail update

March 31, 2009 at 2:22 PM EDT

CAE Inc. plans to invest up to $714-million over the next five years in an ambitious research and development program aimed at expanding the company’s role in flight simulation and training, as well as diversifying into other areas.

Montreal-based CAE said today the federal government will invest up to $250-million in the program.

The investment is being made through the Strategic Aerospace and Defence Initiative (SADI).

About 1,000 jobs will be created or maintained, the company said.

CAE said in a press release it wants to open new markets in the aerospace and defence sectors, such as analysis and operations.

In a telephone interview, CAE president and chief executive officer Robert Brown said CAE feels it is crucial to continue significant R&D spending, despite the more difficult economic times.

“We need to make sure we have a high level of effort in R&D, even in the period we’re in right now. We’re absolutely determined to maintain our competitiveness.”

CAE will finance the investment through the cash flow it generates, he said.

Ben Cherniavsky, an analyst with Raymond James Ltd. in Vancouver, said CAE is making sure it is well positioned for an economic recovery.

Among the six main technology thrusts of the project are the development of an augmented “visionics” system, enabling a pilot to take off and land safely even when visibility is restricted; and the development of networking technologies to allow military of several countries to participate simultaneously in real-time training and mission rehearsal exercises.

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