Trump tweet chills industry; Talking with SecAF James; Boeing's ocean drones

The Reagan National Defense Forum, which wrapped its fourth annual edition last week, has become a who’s who of the national security elite. It’s probably the only event where you see the chairman of the Joint Chiefs of Staff standing along the back wall, next to a complete stranger, listening to a panel discussion.

Some call it the “Davos of Defense” – a reference to the World Economic Forum held in Switzerland. Defense CEOs, lobbyists, and U.S. lawmakers and their staffers are among the 700-plus invite-only guests. While the panels offer a rich dialog on topics-du-jour, the real business gets done during the coffee breaks, in the back of the two auditoriums or in private meeting rooms outside of the public eye.

Held at the Reagan Presidential Library in California’s Simi Valley, the event’s panels, speeches, and even its meals took place under the shiny nose of a giant Boeing 707, a plane that served as Air Force One for Presidents Nixon, Carter, Ford, Reagan, George H.W. Bush, Clinton and George W. Bush. Meanwhile, its successor aircraft became the focus of extraordinary attention by a successor president.

President-Elect Donald Trump’s tweet that the Boeing planes that will become the next two Air Force One aircraft were too expensive has sent chills through the defense industry. The New York businessman followed his tweet with an appearance on NBC’s Today show, where he said that as president: “I'm going to negotiate prices.”

Trump hasn’t explained why he went after the Air Force One project, which hasn’t even really started, aside from some design work. (Some speculate that it was a slap at Boeing leader Dennis Muilenburg.) There are plenty of defense projects that are actually over-budget or under-performing, leaving many wondering who will be next.

Amid the ensuing media frenzy, Muilenburg spoke with Trump, reportedly to say that the firm is “committed to working with the new administration to control costs as they establish requirements for the new Air Force One to keep the program as affordable as possible and deliver the best value to American taxpayers.”

As it happens, I had chatted with Leanne Caret, the president and chief executive officer of Boeing Defense, Space & Security, right next to the Reagan library’s Boeing 707, a plane she actually worked on years ago. How’s the new Air Force One project? I asked.

“The Presidential Aircraft Recapitalization program is going very well,” Caret said. “We’re in the process of working through the acquisition of the aircraft themselves as well as going through the technical reviews of how the aircraft will be outfitted.

“It’s a partnership with the Air Force every step of the way to make sure that we all have a common understanding of what they would like and how do we do that in the most economical way,” she said.

Taking the pulse of the relationship between the Pentagon and defense firms. On the flight back to Washington, I had a wider-ranging talk with Air Force Secretary Deborah Lee aboard her plane. We talked about her accomplishments and the multitude of issues facing the Air Force — among them the relationship between the Pentagon and defense industry.

“Industry leader after industry leader has looked me in the eye” and said relations are in a better place than years past, James said. “What I sometimes question is how much does that flow down the line?”

By that, she means the mid-level acquisition officials at Wright-Patterson Air Force Base in Ohio, which manages most of the Air Force’s weapon projects.

“There’s where I still get feedback that maybe it’s not as close as industry would have liked it,” James said. “Now it has to be appropriately close, but we’ve tried very hard to have much great dialog [and] much greater transparency with what we’re thinking.”

James touted the Air Force’s current search for a new pilot training jet as having an “enormous” amount of discussion between the government and industry.


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Boeing Expands Ocean Drone Business

Just a few months ago, Liquid Robotics was one of just a few Silicon Valley firms to show up at the annual Sea-Air-Space conference, a conference and trade show that attracts sailors and members of the defense establishment. Now Boeing is buying the company.

Liquid Robotics — which does work for the Office of Naval Research and In-Q-Tel, the CIA’s venture capitalist firm — builds a seafaring robot call the Wave Glider. It’s billed as “the world’s first hybrid wave and solar propelled unmanned ocean robot.

The deal helps expand Boeing’s ocean drone portfolio. Last week, I went with Deputy Defense Secretary Robert Work to Boeing’s Huntington Beach, California, complex where it is building Echo Voyager, a 51-foot long autonomous submarine. A payload module could be inserted in the middle of the drone, allowing it to do different types of missions, say dropping mines, firing missiles or collecting data. Sky’s the limit, really. And it’s yellow.

“It's impressive in every way,” Work said. “I can't wait for them to get it in the water and test it. The capabilities that it has, being able to drop things out of the bottom as well as launch things out of the top, long endurance, deep-diving depth, persistence, all of those things were really, really exciting to see.”

Boeing previously worked with Liquid Robotics on a version of the Wave Glider in 2014. Now it will have another yellow vessel embossed with its logo more commonly associated with jetliners.

I told Caret, the Boeing defense chief, that when I think of her company, I don’t think of yellow submarines.

“But you will,” she enthusiastically responded.

Boosting Boeing’s presence in the autonomy market — “undersea all the way to space” is one of Caret’s top goals.

“That vehicle [Echo Voyager] is an example of how we truly listened to the customers in both an unclassified and a classified arena, where we can provide them a capability that truly reduces operational cost,” she said. “It is so innovative because we didn’t build it in the traditional form that we’ve built others.

“We’re seeing great interest from folks,” she said. “It’s just another example of how we can truly bring together this vision on a range of different products and take advantage of them for the customer.”

Beyond the military missions envisioned for a submarine drone like Echo Voyager, there’s a commercial market for the technology as well, Caret said.  

“It [Work’s visit] really allowed us to show how innovative we are,” Caret said. “I’m a firm believer that we have innovated great products in the past and we continue to innovate great products for the future. How we partner with not only other industry teammates, but a well as the customer to get those to them, that’s most important.”

Orders Soar For Laser Targeting Devices

More than 250 of the devices have been sold over the past two years, according to Leonardo, the Italian aerospace form that makes the so-called Type 163 laser target designators. The devices are mostly used by special forces in Afghanistan and other parts of the Middle East.

Cops Get Old Huey Army helicopters

I didn’t think there were any Huey helicopters left in the Army, but turns out they have still been flying around White Sands Missile Range in New Mexico. Now they’re being sent to the Michigan State Police. Check out that old, round-dial cockpit.

L-3 Communications Renames Itself

A the end of the year, the New York-based firm will be known as L3 Technologies. “The new name capitalizes on L-3’s strong brand equity, while better reflecting the Company’s evolution into a leading global provider of a broad range of technology solutions,” the company said in a statement. More importantly, the firm will get a new logo and website: L-3’s current website, has always been a bit confusing, the back-to-back “com” and all. (We’ll have to refocus our network-related typographical complaints on the military’s new, longer email addresses.) The company’s stock ticker, LLL, will remain the same.