Our annual policy conference (née the Defense One Summit) has a new name — Defense One Outlook 2020 — and a bit more of a focus this year on business and technology. You should come: it’s next Thursday, Nov. 7, at the Conrad Hotel in D.C. Find speakers, panel topics, and registration details, here.
Global Business Brief readers may be especially interested in the discussions about the state of the industrial base, foreign military sales, and next-generation manufacturing.
Speakers include R. Clarke Cooper, assistant secretary of the State Department’s Bureau of Political-Military Affairs; Kristen Baldwin, deputy director for strategic technology protection and exploitation in the Office of the Under Secretary of Defense for Research and Engineering; Eric Fanning, president and CEO of the Aerospace Industries Association; and Charles Harrington, CEO of Parsons.
And don’t miss the first public appearance by the U.S. Air Force’s new Chief Architect: Preston Dunlap, who is working to connect all of the service’s weapons into what Chief of Staff Gen. Dave Goldfein calls multidomain command and control. It’s essentially what needs to happen so that the military remains connected in the wars of the future.
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From Defense One
Price of F-35 Falls, But Not as Much As Pentagon Hoped // Marcus Weisgerber
Defense officials say the cost of the plane’s engine is not declining as much as the airframe itself. The engine maker says it already dropped by half.
Microsoft Wins Massive JEDI Cloud Contract // Patrick Tucker and Frank R. Konkel
Amazon loses in a $10-billion upset decision after months of legal and Trump-fueled political controversy.
$85B Nuclear Missile Competition Gets Messier as Feds Investigate Northrop // Marcus Weisgerber
Boeing is breaking up its ICBM team — just as the Federal Trade Commission begins looking into the company’s allegations that Northrop wasn’t playing fair.
L3Harris Technologies Earning Recap
The culture change continues: We’ve already told you about the culture shift at L3 before it merged with Harris last summer. The firm’s CEO Bill Brown said the company’s leadership is focused on innovation. Both firms were largely considered holding companies just a few years back — at L3, executives talked about different parts of the company competing against one another for business. At Harris, Brown said the research-and-development was siloed within various company segments. Now, Brown said Wednesday on the company’s quarterly earnings call, “We’re moving towards more of an integrated model where we’re sharing ideas across the company…We had our technologists together at the end of September [and] started to share different ideas.” The company intends to “invest ahead of the curve on innovation ahead of need” to meet the Pentagon’s “affordable innovation now” desires, he said.
737 Max grounding is hurting flight-simulator sales: L3Harris Technologies had expected 15 flight simulator orders in 2019, but only three came through in the first half of the year, President and COO Chris Kubasik said Wednesday on a quarterly earnings call. It’s prompted the company to lower its outlook “to lower single digits for the second half,” he said. “I think what we’re really seeing is that the airlines and the training companies are slowing down their discretionary spend probably as a result of the pending issues with the MAX aircraft,” Kubasik said.
Pentagon: Our F-35 Relations with Lockheed Are Getting Better
“The relationship is much improved,” new F-35 Joint Strike Fighter program director Lt. Gen. Eric Fick said Tuesday, including “a very open and trusting relationship with my counterpart at Lockheed Martin,” F-35 program manager Greg Ulmer. That appears to be a major improvement from how Fick’s two predecessors initially characterized the relationship. At one point, then-Lt. Gen. Chris Bogdan called it “the worst I’ve ever seen.”
HII Floods Dry Dock, Floating Future USS JFK
Huntington Ingalls’ Newport News Shipbuilding posted this video of water rushing into the dry dock that holds CVN 79, the second Ford-class aircraft carrier. The Navy is expected to christen the ship USS John F. Kennedy on Dec. 7, James “Hondo” Geurts, the Navy assistant secretary for research, development and acquisition, said on Monday.
Speaking of carriers, the USS Gerald Ford, the first-in-class ship that’s experienced more than its share of problems and cost overruns, was at sea this week for its latest round of sea trials. Most notably, there have been problems with the elevators that move weapons around the ship. Right now, four of 11 elevators are working, Geurts said. “Our goal continues to be driving down the cost of the class and delivering those on schedule, on target as we go through this generational recapitalization of the carrier fleet,” he said.
Report: Raytheon Technologies Could Spur M&A
The combination of Raytheon and United Technologies could spur more mergers and acquisitions across the defense and aerospace sector, according to a new PwC report. “[T]he new power player formed by the UTC/Raytheon transaction may spur additional activity as companies seek inorganic paths to keep pace,” the report states. “There can be no question that geopolitical factors and other broader issues such as Brexit can impact this sector quickly and drastically. However, we believe the fundamentals are in place for continued strong activity on a broad basis.’ Pending deals to watch:
- Raytheon-UTC merger
- Private equity group AI Convoy Bidco’s acquisition of Cobham
- Pattonair’s acquisition of Wesco
Air Force Wants More-Maneuverable Satellites
The U.S. Air Force’s Space and Missiles Systems Center wants companies to weigh in about “industry’s innovative developments in launch, on-orbit maneuverability, and commodity transport architectures for on-orbit servicing.” The information will be used to “assess if and how [the Air Force] can leverage such capabilities to satisfy National Security Space operational requirements in contested space environments.” Here is the request for information. This is the Air Force’s latest effort to prepare for future war in space. “Looking forward, all components of space weapon systems, including NSS satellites, ground, and launch elements will be required to successfully support warfighter needs under demanding hostile environments,” the RFI states.
Croatia Black Hawk Deal Approved
The State Department on Wednesday approved the sale of two Sikorsky Black Hawk helicopters to Croatia. The sale could be worth $115 million. Flashback to May: “The U.S. State Department wants to expand a little-known effort that offers countries cash to buy American-made weapons if they give up Russian-made arms.” Croatia is one of those countries. Read that story here.
Secret Space Plane Lands
The robotic X-37B, which looks like a mini Space Shuttle, landed at Kennedy Space Center early Sunday morning. In a statement, Air Force said: “The spaceplane conducted on-orbit experiments for 780 days during its mission, recently breaking its own record by being in orbit for more than two years. As of today, the total number of days spent on-orbit for the entire test vehicle program is 2,865 days.” We still have no clue what the X-37B does when it’s flying around high above us.
Former Defense-Industry Spox Goes Viral
Baseball fans will by now have seen the viral video, or maybe even the insta-Bud Light commercials, featuring Jeff Adams, the Washington Nationals fan who took a baseball to the chest while maintaining his grip on to two Bud Lite beers during Game 5 of the World Series on Sunday night. Now he’s a cult hero. Adams, an Army veteran and former Little League catcher, is better known in defense industry circles from his time as a spokesman at Lockheed Martin and AM General.
Derek Tournear was named director of the Space Development Agency, the Pentagon’s buy-a lot-of-small-satellites-fast organization on Oct. 28. The former director Fred Kennedy resigned less than five months into his tenure.
Retired Adm. John Richardson, the former chief of naval operations, was elected to Boeing board of directors, the company announced on Oct. 25 He will be part of the company’s newly established Aerospace Safety Committee, set up in response to two deadly 737 Max crashes. He also will serve on the board’s Special Programs Committee.
Debra Reed-Klages has been elected to Lockheed Martin’s board of directors, effective Nov. 1. Reed-Klages was a longtime executive in the energy sector.