Key facts
RUAG has had a turbulent few years. In 2017, it was still a group with a turnover of CHF 1.8 billion and 8,500 employees. However, following the split initiated in 2020 and completed in 2022, RUAG MRO generated a turnover of just CHF 741 million with 2,800 employees in 2023. The owner requires RUAG MRO to generate 80% of its business for the Swiss Armed Forces. The two business areas Ground (land systems) and Air (air systems) are the top performers. This makes RUAG a central service provider for the Swiss Armed Forces.
The aim of the audit was to assess whether the Executive Board, the Board of Directors and the owner make appropriate use of their management and steering mechanisms. The Swiss Federal Audit Office (SFAO) audited issues relating to the roles and competencies of these management bodies mainly on the basis of two project examples, including the roles of the service purchaser (armasuisse) and the service procurer (Armed Forces).
After the 2020 split, RUAG MRO had to rebuild the management and steering mechanisms for its operational units. The lack of continuity at the most senior levels of management made it very difficult to establish these mechanisms and processes. Collaboration between the Executive Board and the Board of Directors was affected. This was due to a lack of transparency, an inadequate error management culture and insufficient critical examination of the assessment of performance and objectives. Overall, the SFAO identified a need for improvement in the management and steering of RUAG MRO. This was also confirmed by the follow-up on SFAO recommendations: the SFAO found that compliance management and export compliance must become more effective in order for the recommendations to be considered implemented.
In 2024, RUAG MRO is planning a fresh start: it has a new CEO and the position of Chairman of the Board of Directors is to be filled by a new appointee. In addition, the strategy period for 2024 to 2027 begins with the aim of being more closely involved in the Armed Force’s security policy projects. For a successful restart, the owner must play a more active role in mediating between the Armed Forces and RUAG MRO.