Dance party at a defense firm; New B-52 engines; Is the defense bubble bursting? and a lot more.
It’s rare to walk into a defense-industry office and hear EDM blaring from the speakers. So you can imagine this former DJ’s surprise and delight last night.
Bell — the recently rebranded company formerly known as Bell Helicopter — was hosting a grand opening of its new Advanced Vertical Lift Center just south of the Pentagon. It’s abundantly clear from employees and just the feel of this place that the venerable helicopter-builder is viewing itself more as a technology firm these days.
The largely black-and-white interior and open layout have a Silicon Valley feel somewhat out of place in the stale defense contractor bastion of the Crystal City neighborhood. Windows wrap the space, giving panoramic views of Reagan National Airport and the Capitol.
So why spend the money to open a place like this? The office largely showcases the in-development V-280, a new tiltrotor that Bell is pitching to the Army to replace the Black Hawk. It’s a considerable prize; Sikorsky has sold the service thousands of Black Hawks over the decades.
The building features simulators, immersive training tools (think virtual-reality glasses), lots of screens showing things like flight-test videos, and even a table that could be used for mission planning.
Wednesday night’s party was attended by Army generals, consultants and a good number of employees who work at other defense firms in town. (I guarantee what the water cooler talk will be like at their offices today.) Besides the EDM — electronic dance music, a genre we called techno back in the 1990s — the party featured boutique pastries and tasty finger foods.
The most unique part of the office: a dozen or so rotor blades standing upright to form an artistic backdrop behind the reception desk. The place certainly stands out and maybe, just a small maybe could be a precursor to another, slightly larger, tech firm setting up shop in the same neighborhood.
You’ve reached the Defense One Global Business Brief by Marcus Weisgerber. Make sure you check out our new podcast, Defense One Radio, on Friday for my exclusive interview with Air Force Secretary Heather Wilson. As always, send your tips here and thoughts to: firstname.lastname@example.org or @MarcusReports. Check out the Global Business Brief archive here, and tell your friends to subscribe!
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Air Force May Conduct B-52 Engine Experiment
Here’s a bit of a sneak peak at my interview with Air Force Secretary Heather Wilson that will post Friday on Defense One Radio. We got to talking about the service’s use of experimenting and prototyping of late. For example, the Air Force is putting two small attack planes through the paces as it figures out if it will buy them. Now there might just be another experiment on the horizon.
"We may do an experiment with commercial engines for the B-52,” Wilson said. “The B-52 needs new engines; rather than designing a specific engine for the B-52, we may take a look at what commercial engines are out there. The B-52 is a venerable aircraft; but there are thousands and thousands of large aircraft out there that have commercial engines built for them. We may experiment with some of those."
Here’s a bit more background on the current B-52 engines from Gen. Dave Goldfein, the Air Force chief of staff, who talked to me at Barksdale AFB last year. Read that here.
Check Your Cell Phone at Some Pentagon Doors
Mobile devices are now banned in “secure spaces” inside the Pentagon — an extension of existing bans in various classified areas. Pentagon police will enforce the ban using “wireless detection capabilities.” The new policy does not apply to fitness trackers, as long as they don’t have cameras, microphones, wifi or cellular transmitters, so it appears your Fitbit is cool. Here’s Deputy Defense Secretary Patrick Shanahan’s May 22 memo on the new policy.
Something to ponder: Cell phones don’t work in most of the Pentagon, unless you’re in the outer E-Ring. That’s because the walls are so thick. It’s routine to see people huddled around windows and entryways checking their personal devices. But within the last year or so, WiFi has been installed for employees through the Pentagon. Military and civilian workers can register their personal devices. Folks are now seen working (presumably, on unclassified work) in food courts. It’s much more of a private industry feel.
Lockheed Loses Intellectual Property Protest
The Government Accountability Office rejected the company’s protest of an Air Force request for intellectual property related to its Black Hawk helicopter. Sikorsky, which is owned by Lockheed, is pitching the Black Hawk to replace old Huey helicopters used to help guard ICBM fields in the northern United States. A Sikorsky spokeswoman said the company was “reviewing our options to determine our next steps.” But it sounds like it will still bid its Black Hawk against the Leonardo AW139, whose Italian maker is partnered with Boeing.
Why it matters: The military has been demanding more intellectual property with bids, in part so it can more easily upgrade weapons and be less reliant on the company that made the aircraft. This results of the protest were being closely watched across the industry as a test of that new policy.
Defense Bubble, About to Burst?
Credit Suisse analyst Robert Spingarn writes: “After six consecutive years of relative outperformance, defense hardware stocks have reached valuation multiples not seen since 2001. But whereas in 2001 those multiples were deserved in light of the beginning of a major land war and the end of an industry consolidation wave, today's market appears to have gotten ahead of itself." Whoa! Spingarn downgraded Raytheon and the defense sector to neutral. His note comes after a year of record highs following President Trump’s election.
General Warns of Predictive Maintenance Costs
Predictive maintenance is all the rage in the Pentagon right now. The Navy hopes it can help its fleet do more with less, and just last week I wrote about how Gen. Ellen Pawlikowski, head of Air Force Materiel Command, called it a “must-do.” Commercial airlines have blazed the trail with predictive analytics, which monitor their fleets’ parts in an effort to replace broken components just before — and crucially, not after — they break. Having that kind of information could help the Air Force keep more planes operational and lower sustainment costs in the long term.
But it might also come with more up-front costs, cautioned Lt. Gen Lee Levy, who commands the service’s sustainment center. Once you better understand your fleet, Levy said in response to a question from Defense One’s Caroline Houck at a Mitchell Institute event this week, “the question then will become: Do we want to spend the money? The sustainment system we have today is the sustainment system we bought. In an Air Force with a bunch of really old airplanes — many of which have become [low-density, high-demand] assets by default — we have tuned the sustainment system to be optimally efficient to try to keep everybody reasonably healthy. If we want it to be more effective, we may have to consider adding more resources.”
Levy also warned: Don’t dip a toe in; it’s all or nothing. “It’s only good to the extent that we fund it,” he said. “It’s only good to the extent we fund it as an Air Force, not as a platform. Sometimes being platform-centric leads us to the wrong conclusions. Platform A has really good predictive health, so you can make really good decisions. Platform B doesn’t have any of that. We chose not to fund that capability for platform B. Okay, not only do I not have the readiness in platform B, but as the global logistics commander, as a global service provider, I know have further sub-optimized [the supply chain.]”
International Gun Sales Shifting from State to Commerce
It’s been long in the works (since the Obama administration) that oversight gun exports would shift from the State to Commerce Department. It’s now on the cusp of happening. Mike Miller the acting secretary of state for the Directorate of Defense Trade Controls, made the announcement at a Forum on the Arms Trade conference Tuesday. Here’s the proposed rule, which is set to be published today.
How the gun industry is viewing the change: Per the New York Times: Lawrence Keane of the National Shooting Sports Foundation called the proposal “a significant positive development for the industry that will allow members to reduce costs and compete in the global marketplace more effectively, all while not in any way hindering national security.”
How the arms-control community is viewing the change: “Relaxing regulations on many firearms by putting them under the jurisdiction of the Commerce Department rather the the Department of State will make it harder to track where these weapons end up, and therefore easier for them to be diverted into the wrong hands,” said Bill Hartung, director of the Arms and Security Project at the Center for International Policy.
Don’t Use Acronyms Around SecAF
There’s a jar full of money in Heather Wilson’s office. It’s where offenders pay their fines for using too many acronyms. When we taped this week’s Defense One Radio interview this week, the jar held lots of dollar bills and even a five-spot right on top with a sticky note. The note — signed “Chief 18,” who happens to be now-retired Gen. T. Michael Moseley, the 18th Air Force chief of staff — says a now-deployed colonel owed Wilson the cash for his acronym use in a meeting. It appears Moseley delivered on that.
There’s a new No. 2 at Lockheed Martin Aeronautics and it’s Michele Evans. Officially her title is deputy executive vice president. She reports to Aero sector President Orlando Carvalho. Programs she’ll work on: F-35, F-16 and C-130. Evans was previously vice president and general manager for Integrated Warfare Systems and Sensors in Lockheed Martin's Rotary and Mission Systems business area. That position now belongs to Paul Lemmo.