“We need more money” was the headline message from the newish Chief of Naval Operations at this week’s annual Surface Navy Association symposium, and plenty of other Navy leaders were on hand to follow and amplify Adm. Mike Gilday’s lead.
Sure, service leaders are always asking for more funding, but Gilday’s unusual bluntness stems from at least three factors: the rising focus on great power competition, the expected flattening of defense budgets — and even the departure of former CNO Adm. John Richardson, whose edict against speaking too freely about Navy matters to outsiders has dampened such conversations in the past few years.
All this means: there’s gonna be a food fight among the services.
“A one-third, one-third, one-third cut...isn’t necessarily aligned with where we need to go against the pacing threat that we face,” Gilday said Tuesday, alluding to the services’ roughly equal allocations in the annual defense budget.
Army Secretary Ryan McCarthy responded on Wednesday morning, noting that the Army gets a smaller percentage of the budget than the Navy and Marine Corps, and the Air Force and its new Space Force subsidiary.
“Fights for a larger share of the DoD budget pie are hardly unique, but we suspect it’s going to take more than just arguments in favor of one service over the other to see share shifts,” Byron Callan, an analyst with Capital Alpha Partners wrote in a June 14 note to investors.
Gilday, Marine Corps Commandant Gen. Mike Berger, and other naval brass argue that their forces are best suited to fight China in the great power competition envisioned in the National Defense Strategy. But the Army wants to fortify remote islands in the Pacific with long-range missiles. The Air Force talks about new long-range B-21 stealth bombers and its intercontinental ballistic missiles, two-thirds of the nuclear triad.
But when there’s a budget cap — $740 billion in fiscal 2021 — choices must be made. During the Budget Control Act era, there have been occasional arguments that the nuclear triad budget should be separate from the regular defense budget.
The Navy is expected to announce the types of ships that would make up the 355-ship fleet. But paying for those ships and the additional sailors that would crew them is a different story.
“I don’t think it would be reasonable to assume you could grow the Navy by 25 to 30 percent without some change in the budget,” James “Hondo” Geurts, assistant Navy secretary for research, development and acquisition, told reporters Wednesday.
”If the country wants to move to a larger Navy, we’re going to have to figure out how to resource that and how that looks,” Geurts said. “We’re looking at what is that full range of options available to grow there and then that will come with resource trades.”
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Marines Might Buy Anti-Ship Missiles
The U.S. Marine Corps may buy a ground-launched version of the Kongsberg/Raytheon Naval Strike Missile. “We’re seriously looking at that amongst a whole bunch of other different activities,” James “Hondo” Geurts, assistant Navy secretary for research, development, and acquisition, told reporters Wednesday. The Navy is already buying the anti-ship weapon for its littoral combat ships. Poland uses ground-launched Naval Strike Missiles for coastal defense.
Northrop Grumman Rebrands
More than a quarter-century after Northrop and Grumman merged, the industry giant has changed its corporate branding. Company officials say their new logo reflects how Northrop Grumman has changed yet remains “at the forefront of technology and innovation,” adding that a small right angle — the “forward mark” — alludes to “the periodic table, scientific discovery and precision, and some of our most iconic products.“ At the SNA conference this week, several folks opined that the “forward mark” resembles a B-2 stealth bomber, X-47B drone or perhaps the new B-21 bomber.
Type talk: The font appears to be Futura Maxi Pro Bold, a 1960 variant of Paul Renner's 1927 Futura typeface. Futura was widely used by NASA and the U.S. Air Force in the 1960s and 1970s, so this could be a corporate callback to Northrop's and Grumman’s considerable contributions of the time (h/t Brad Peniston).
Ellen Lord Talks Boeing
As more embarrassing details of Boeing’s corporate culture arise amid the 737 Max investigations, Ellen Lord, defense undersecretary for acquisition and sustainment, said she expects the company to be forthcoming with the Pentagon leaders about its defense projects.
“I think what Boeing needs to do is tackle this with the Department of Defense one program at a time and make sure they are very forthcoming in terms of answering any questions we have, replying to [requests for information], [requests for proposals] and I can only judge it by their performance with us,” Lord said Tuesday at a Defense Writers Group breakfast.
Asked the importance of corporate culture in driving types of behavior out of company, the former Textron Systems CEO said, “The shadow of the leader is very, very long.”
Lord characterized Leanne Caret, CEO of Boeing Defense, Space & Security, as “one of the most forthcoming CEOs” in the defense industry.
Boeing last month fired its CEO Dennis Muilenberg, who ran Boeing’s defense business before moving up to lead the entire company.
Not So Fast on F-35 Logistics Deal
Lord also threw some cold water on Lockheed Martin’s proposed five-year, $15 billion F-35 maintenance deal. “At this point, I don’t know whether a [performance-based logistics deal] makes sense or not because I have not seen all the elements of cost and what the burn down is,” Lord said. Right now, the Pentagon awards annual contracts to manage F-35 logistics. The most recent one of those deals (for $1.9 billion) was announced on Dec. 31.
The Pentagon wants to lower the price of flying an F-35. It costs more than $30,000 per hour now and Pentagon officials have data showing that figure coming down to about $29,000, Lord said. “By 2025, we’d really like to be to $25,000 per flight hour.”
But defense leaders say they want more data from Lockheed. “The initial proposal that Lockheed put in was extremely high level,” Lord said. “We have been working since last fall to … generate the dataset to understand the performance of the aircraft, all the elements of cost that go into maintaining it whether that be material, whether that be labor.”
The Pentagon has hired an outside consultant “to make sure that we have independent points of view,” Lord said.
“I’ve seen PBLs be very efficient and effective when it’s a win for industry and a win for the government,” Lord said. “Right now, we need some clarity around cost. We need some clarity around intellectual property issues in order to understand all the elements of cost and make the best decision in terms of the value for the taxpayer and to make sure the Air Force, Navy and Marine Corps has the best service delivery possible.”
If not a so-called performance-based logistics deal, then what? “We’re looking at everything from the way we’re doing things now to a full PBL to something in between like we’ve done on other programs,” Geurts, the Navy’s top acquisition official, said Wednesday.
Speaking of F-35 Logistics: The military will replace the Autonomic Logistics Information System, known as ALIS, with a new system called the Operational Data Integrated Network, or ODIN. More on that here.
Singapore Takes Step Toward Buying F-35
The U.S. State Department, on Jan. 9, approved a $2.75 billion sale of 12 F-35B Joint Strike Fighters to Singapore. In addition to the U.S. Marine Corps, the U.K., Italy and Japan are buying the short-take-off and vertical landing version of the F-35. More here.
Leonardo Wins Second U.S. Helicopter Competition
Leonardo’s AgustaWestland beat out Bell and Airbus to build 32 pilot training helicopters for the Navy. The helicopters will replace the Bell TH-57. The deal is worth $176 million. The Navy designated the new helicopter — a version of the AW119 — the TH-73A. But perhaps more interesting is that it’s Leonardo’s second U.S. military helicopter deal in two years. In 2018, the U.S. Air Force chose the MH-139 to replace its Vietnam-era Bell Hueys. Leonardo partnered with Boeing to score that $2.38 billion deal for 84 helicopters.
Sikorsky, Boeing Submit Bids in German Helicopter Contest
Lockheed Martin’s Sikorsky is pitching the CH-53K King Stallion and Boeing the H-47 Chinook for the project called Schwerer Transporthubschrauber. “A contract award is expected in 2021 for the acquisition of 44 to 60 aircraft, including sustainment and training,” Boeing said in a statement. Sikorsky is teamed with Germany's Rheinmetall.
- Former DARPA Director Steven Walker has been named Lockheed Martin's vice president and chief technology officer. Lockheed’s former CTO Keoki Jackson has been named the company’s chief engineer and vice president of engineering & program operations.
- Mercury Systems named Orlando Carvalho, former Lockheed Martin Aeronautics executive vice president, to its board of directors.
- Huntington Ingalls Industries named Jason Brown as vice president and chief information officer for Ingalls Shipbuilding.
- Huntington Ingalls also announced Matt Needy will become vice president of Navy Programs at Newport News Shipbuilding upon the April 1 retirement of Ken Mahler.