Peering ahead; Taiwan drone-sale OKd; Boeing’s nautical divestment; and more...

As we write, the Senate is deadlocked: 48 Democrats, 48 Republicans, with one, possibly two, Georgia seats headed for a runoff in January. Democrats have retained control of the House, though their margin has slimmed. While we wait for the presidential race to conclude, let’s contemplate one possible scenario: President Biden, GOP-controlled Senate, Dem House.

Wall Street likes this setup, which could reduce the chance of deep defense-spending cuts. But it might constrain the new president’s ability to get Cabinet picks past the Senate.

We’ll save the who’s jockeying for cabinet and top political positions until we have a winner, but Axios reports that a Republican Senate would only consider centrist appointees, not “radical progressives.”

Congress still has a ton of business it must get through before the end of the year. It is already late to pass spending bills for fiscal 2021, which began on Oct. 1. The current stopgap funding measure expires on Dec. 11. Lawmakers also still need to pass the fiscal 2021 National Defense Authorization Act.

The prospect of divided government might scuttle suggestions that a Biden administration would cancel the Pentagon’s plans to replace the Minuteman III intercontinental ballistic missiles.

“Any serious push to retire the ICBM force and do away with the Ground Based Strategic Deterrent program would not be supported by the Senate,” Cowen & Company’s Roman Schweizer wrote in a Nov. 4 note to investors. “We did not think that would've happened anyway with a Democrat sweep, but we think it is very unlikely now. We see the election as positive for the Ground Based Strategic Deterrent program awarded to Northrop Grumman.”

Foreign military sales could also be an area ripe for changes. A bipartisan group of lawmakers have opposed the Trump administration’s efforts to sell weapons to Saudi Arabia and the United Arab Emirates. The Trump administration has recently been pushing the sale of 50 F-35 fighter jets to UAE.

“If the sale is going to happen, it will need to be jammed through a Lame Duck before Biden takes office,” Schweizer writes.

A Democratic administration could place more scrutiny on large mergers and acquisitions. Recall that Frank Kendall, who led Pentagon acquisition policy during the Obama administration, voiced concerns about consolidation among the top-tier of defense firms.

“Defense M&A volume is usually low during U.S. election years given the uncertainties a new Administration may bring and 2020 has fit that pattern,” Capital Alpha’s Byron Callan wrote in a Nov. 1 note to clients. “However, we would expect a pick-up in 2021 and beyond. Services consolidation is likely but portfolio shaping will also be likely.”

Shipbuilding is another area that could see changes. The Navy has its 355-ship goal, then there’s Defense Secretary Mark Esper’s Battle Force 2045 calling for more than 500 ships, both manned and unmanned.

“We think a Biden presidency would walk away (sail away?) from a large fleet size target (355-500) but a Republican Senate would still be a strong backer of key shipbuilding states,” Schweizer writes. “We also think the Navy's desired push into unmanned/smaller ships would draw more scrutiny and be tempered.”

Welcome

You’ve reached the Defense One Global Business Brief by Marcus Weisgerber. Send along your tips and feedback to mweisgerber@defenseone.com or @MarcusReports. Check out the Global Business Brief archive here, and tell your friends to subscribe!


From Defense One

Would Biden WH, GOP Senate Prevent Defense-Spending Dip? // Marcus Weisgerber

As the nation waits for election results, some analysts are looking ahead.

The Best Tech for Troops (Needs an Easier Path to Reach Them) // Tony DeMartino

The Pentagon must keep lowering barriers for startup companies, especially in artificial intelligence and machine learning — and help them stay in the game.

Time to Rethink Arms Sales to Taiwan // A. Trevor Thrall and Jordan Cohen

Once, they might have tilted the military balance. Now they just destabilize the region.


Boeing Sells Yacht 

Named Daedalus, the yacht recently sold to a California developer for $13 million, according to the Puget Sound Business Journal. “The Boeing yacht has been used for entertaining and hosting the airplane giant's corporate customers, strengthening corporate relationships and philanthropy,” the paper writes. “In the summers, the Daedalus was often based at Vancouver Island, where its primary role was as a small floating hotel, providing a way for Boeing sales teams and airline customers to get away for fishing trips and conversations in a private setting.” The coronavirus pandemic combined with the fallout from two deadly 737 Max crashes has prompted tens of thousands of layoffs at the Chicago-based firm. 

On the company’s quarterly earnings call last week, CFO Greg Smith said: “We're reviewing every piece of real estate, every building, every lease, every warehouse, every site to look at how we can be more efficient, and we'll share our decisions as we make them.” Daedalus was clearly grouped in there. 

Bonus: Kudos to The Warzone blog for this headline: “Boeing Just Sold The Superyacht You Didn't Even Know They Owned.”

US Approves Taiwan Drone Sale

The State Department said Taiwan could buy up to four MQ-9 Reaper drones. The sale, with ground control stations and other support equipment is factored in, could be worth $600 million. No bombs or missiles are included in the proposed sale; however, the Defense Security Cooperation Agency notification statement says the drones will be “Weapons-Ready.” “If concluded, the proposed sale of this system will counter threats to Taiwan by improving Taiwan’s Intelligence, Surveillance, and Reconnaissance capabilities,” a State Department official said. “Taiwan intends to use its own funds for this purchase.” The approval comes in addition to four weapons deals worth nearly $4.2 billion that State approved for Taiwan over the past three weeks. 

Unveiled: New Small Drones That Fly for a Day

French firm Elistair says it has made a small, tethered drone that can remain airborne for 24 hours, allowing it to record video or carry a communications relay for the military or law enforcement. “With its micro-tether of 330 feet (100 meters), the Orion 2 flies higher than its predecessor and surveils more ground. It can also carry up to 2kg (4.5 pounds) of payload, so it can serve simultaneously as an ISR and telecom platform. The Orion 2 can also stream georeferenced electro-optical and infrared imagery at the same time, and it can deploy 4G/5G communications nodes thanks to a new fiber optics cable option.” Here’s a video of the drone.

GDIT Wins $4B Cloud Computing Deal

The General Services Administration and the Defense Department the 10-year deal to Dynamics Information Technology last week. Per our sister publication NextGov: The company “will provide an enterprisewide set of business cloud capabilities including productivity tools, email, collaboration, file sharing and storage through a Microsoft Office 365 cloud environment.” Last week’s contract award “follows a years-long procurement marred by changes in acquisition strategy and multiple bid protests filed by Perspecta.”

Blue Angels Say Goodbye to Hornets

The U.S. Navy’s flight demonstration squadron is switching to F/A-18E/F Super Hornets. And here’s a video of the classic F/A-18s flying off the Florida panhandle. 

Making Moves

  • The Pentagon created an assistant defense secretary for space policy and an associated Office of the ASD(SP) on Oct. 29, Justin Johnson has been designated as the official “performing the duties of the ASD(SP)” until a formal nomination is made by the White House. Gregory Pejic has been named the principal deputy for space policy.
  • Maj. Gen. Michael Langley has assumed command of U.S. Marine Corps Forces Europe and Africa on Nov. 3. The former commander was fired last month after allegedly using a racial slur.
  • Peraton has named Kevin Meiners — former deputy director of National Intelligence for Enterprise Capacity — to its advisory board. Meiners served in leadership positions involving intelligence, surveillance and reconnaissance systems in the IC and Defense Department.
  • Israeli defense firm Rafael has named Moshe Lipel its chief financial officer. Lipel was previously CFO of Elta Systems, an IAI subsidiary.
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.