A good month for Boeing; One-on-one with Sean Stackley; M&A aplenty, and more.

A good month for Boeing could get even better before week’s end. After receiving an $805 million contract to build four MQ-25 aerial refueling drones for the U.S. Navy, the company won a $2.4 billion deal for new Air Force security helicopters. Boeing doesn’t even have to bend much metal for the latter contract: the MH-139 helicopter will be built by Leonardo, the Italian aerospace and defense firm.

What’s next? As soon as this evening, the Air Force is expected to name the winner of the $15 billion contract to build the T-X pilot-training jet. Boeing and Swedish aerospace firm Saab are bidding against three other competitors and teams. [UPDATE: Boeing won the T-X contract.]

A T-X win would mark a substantial turnaround of Boeing’s defense business. When Leanne Caret took charge in 2016, Boeing had just lost its bid for the $80 billion contract to build the Air Force’s new bomber, F/A-18 and F-15 fighter jet orders were drying up, and the end of production of both planes was in sight. There were serious questions about what would happen to Boeing’s presence in St. Louis, home to those fighter jet production lines and, at the time, the firm’s defense and space headquarters. (Boeing says it will build the 350 T-X trainer jets in St. Louis if it wins the T-X contract)

Caret has has since moved the defense business to Arlington, Virginia, literally across the street from the Pentagon, and reorganized the leadership structure in 2017 and again this year. This week, Fortune ranked her No. 23 on its annual Most Powerful Women list. (FWIW, Oprah is No. 51.)

“Boeing has indicated that it is seeing robust defense demand indicators based on a positive budget environment, and pending award activity could help shape the 2020s,” Citi analyst Jon Raviv wrote of Boeing’s defense business in a note to investors on Monday.

And then there’s this tiny data point: during the radio broadcast of Wednesday’s Cardinals-Brewers baseball game, Boeing ran a help-wanted ad seeking aviation mechanics, structural engineers, and software developers for its St. Louis operations.

Still, not everything is rainbows and unicorns. Most notably, troubles building the KC-46 aerial refueling tanker have cost the company more than $3 billion. The Air Force is supposed to receive its first tanker in the coming weeks.

Why did Boeing win the helicopter deal? Cost. The Air Force hasn’t said much since it announced the winner, as the losing bidders still may contest the decision. A version of the commercial Leonardo AW-139, the Boeing-Leonardo offering beat out new Black Hawks proposed by Lockheed Martin’s Sikorsky and used-but-overhauled Black Hawks proposed by Sierra Nevada. The MH-139 will replace the UH-1N Huey, which have been guarding intercontinental ballistic missile fields since 1970.

The Air Force said in its announcement that Boeing’s bid was $1.7 billion less than the service’s $4.1 billion program projection. As with the KC-46 tanker, the deal includes a fixed-price contract — meaning that if the project runs into development hiccups, it’s Boeing who will eat the costs.

Other observations: The selection of MH-139 marks the second time the Pentagon has chose a foreign-made, commercial helicopter over American-made military aircraft for stateside missions. In 2006, the Army chose the Airbus UH-72 Lakota, which like the MH-139, is not meant for combat missions.

This MH-139 win is a much bigger deal for Leonardo, which has been seeking a substantial U.S. military contract like this for more than a decade. The firm is also vying for the T-X contract, solo-bidding its T-100 jet trainer. So, if the Air Force selects Leonardo’s training jet, the Italian company could have a really, really good week too.

Welcome!

You’ve reached the Defense One Global Business Brief by Marcus Weisgerber. Thanks for reading and keep the feedback coming to: mweisgerber@defenseone.com or @MarcusReports. Check out the Global Business Brief archive here, and tell your friends to subscribe!


From Defense One

An Italian-Designed, American-Built Helicopter Will Replace US Air Force Hueys // Marcus Weisgerber

The selection of the Boeing-Leonardo MH-139 ends a years-long quest to replace the 1970s-era UH-1Ns.

The Must-Haves of the Next Strategic Nuclear Bomber // Patrick Tucker

Air Force officials opened up — just a bit — about at the thinking that's informing the design process.

DARPA-Funded Work May Help Troops See Around Corners // Patrick Tucker

By setting up multiple sensors, researchers have learned to "see" what's out of sight.


One-on-One with Sean Stackley

Last week, L3 Technologies named Sean Stackley as corporate senior vice president and president of its Communications & Networked Systems business. Before joining L3 in January, Stackley spent nearly 10 years as assistant Navy secretary for research, development and acquisition. Here are some excerpts from a conversation we had last week at the Air Force Association’s Air, Space, and Cyber conference.

Q. Are you going to be based here in DC?

A. Initially in DC, and I’m going to assess in the near-term where the right place is for a headquarters [to] have the biggest impact for the segment and for the company.

Q. Right now, where is most of the new segment’s business?

A. If you look at a heatmap, the new segment has 23 business units. Of those 23, about one third are in … the Northeast, Salt Lake City is the largest single concentration, that’s about one third, and about one-third on the West Coast. We also have businesses in Europe and the Asia-Pacific. The prior Communications segment was headquartered in Salt Lake City. We’re not immediately concluding that’s the right answer.

Q. CEO Chris Kubasik has lofty goals for growth. What are the goals for your sector?

A. I’m not going to put numbers out day one. I’ve had the opportunity, in my time on board, to get a pretty reasonable handle on what the capabilities are, what we do across this new segment, what the opportunities are, what they currently look like in terms of size … We’re going to spend this transition period where we bring in the sectors that make up the new segment and spend enough time understanding what all the synergies are before we start putting markers out there.

Q. Kubasik wants L3 to be perceived among the industry’s giants. What do you make of the company’s perception?

A. Pre-Chris … the perception of L3 was that it’s a holding company. What L3 does, it goes out and it acquires companies. It does keep them in stovepipes. In fact, there’s past history where L3 companies competed against L3 companies. That didn’t lead to much growth. When I say growth, I’m not talking about in the financial sense. I’m talking about building higher-order, more complex systems that leverage the technologies across the company to deal with some of the tough challenges that the Department of Defense has. Chris Kubasik takes a look at the holding company mentality and says, “It was good for the past [but in the future] L3 needs to integrate its capabilities. There’s a business side of that integration and there’s also a technical side of that integration. Let’s be more strategic in terms of how we make our acquisitions. [And] it’s not just the technology, it’s the people.”

Speaking of Acquisitions

L3 announced this week that it has acquired ASV Global, an unmanned surface vessel and autonomous vessel control systems company, adding to the ever-growing list of acquisitions in this underwater drone market. The new company will be known as L3 ASV.

Also, Boeing completed its acquisition of Millennium Space Systems, “a provider of agile, flight-proven small-satellite solutions.” It will operate under Boeing Phantom Works as a subsidiary as Millennium Space Systems, A Boeing Company. “It will retain an independent operating model while benefiting from Boeing's resources, scale, manufacturing capability and technology research as the leading provider of aerospace products and services,” Boeing said in a statement.

Patriots for Poland

Raytheon received a $1.5 billion production deal for four Patriot units for Poland. “Patriot will enhance Polish, European and NATO security while creating jobs in Poland and the US," Tom Laliberty, vice president of Integrated Air and Missile Defense at Raytheon's Integrated Defense Systems business, said in a statement.

JEDI Deadline Extended

From my colleagues at Nextgov: the Pentagon has extended the bidding window for the much-watched JEDI cloud contract. “It’s the second time the department extended JEDI’s original Sept. 17 deadline, following other amendments that answered industry questions and a pre-award bid protest from Oracle,” Nexgov writes. For background on the JEDI contract, and someone trying to undermine it, read here.

AE Industrial Partners Acquires Gryphon Technologies

Private equity firm AE Industrial Partners has acquired defense engineering and technical services firm Gryphon Technologies. “AEI will combine Gryphon Technologies with

CDI Government Services … a fully-owned subsidiary of CDI Corp,” the company said in a statement. “Gryphon Technologies, headquartered in Washington, DC, is a premier professional and engineering services provider specializing in defense systems and integration, naval architecture and marine engineering, program management, test and evaluation, cybersecurity and logistics.”

Making Moves

Dana Mehnert will become president of Harris’ Communication Systems business on Sept. 30. He succeeds Chris Young, who is retiring 36 years at Harris, Exelis and ITT.

Charles “CR” Davis has been appointed as senior vice president of L3 International. “In this newly-created position, he will oversee L3’s international offices and serve as chairman of the company’s international boards in Australia, Canada and the U.K.,” the company said in a Sept. 24 statement. Davis, a retired Air Force lieutenant general who was an F-35 program manager, reports to Stephen O’Bryan, L3’s chief global business development officer.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.