The Defense Business Brief: CEOs condemn insurrectionists; Boeing to pay $2.5B to settle 737 Max conspiracy charge; Dems control Congress; and more
Welcome back! Think of today’s edition of your trusty newsletter as kinda like when a newspaper, radio, or TV station changes gets a fancy new logo or redesign. I’ll still be here with you each week (albeit in a briefer format, and on Fridays instead of Thursdays) bringing you valuable news and information, and we’ll also try to have a little fun too — although this week is probably not the time for that. With that, off we go …
Several Defense CEOs are speaking out after pro-Trump insurrectionists stormed the Capitol Wednesday in an attempt to disrupt the certification of President-elect Joe Biden’s victory over President Donand Trump.
“The vote of the people and the peaceful transition of government are core to our democracy,” Boeing CEO David Calhoun wrote on Twitter. “Our company has a long history of working with elected officials over many years. In the spirit of bipartisanship, we encourage them to work with President-elect Biden to unify our nation.”
Leidos CEO Roger Krone told employees: “The actions of this small minority do not represent the majority of Americans across the political spectrum who strive for the good but who may differ on how that good is accomplished. One thing I know we can all agree on is that violence, lawlessness, and anarchy have no place in our nation. We believe in civil political discourse and the fundamental right to peacefully protest but strongly condemn violence or intimidation.”
Democrats won the Senate, prevailing in both Georgia runoffs this week. That means a 50-50 split between Dems and Republicans with Vice President-elect Kamala Harris giving the Democrats the tie-breaker. That means there’s a greater chance of deeper cuts to the Pentagon’s budget than if Republicans kept control of the upper chamber. But with the slimmest of slim majorities, expect bipartisan spending deals. “Our base case for next two years is defense spending [is] flat to down [a low single-digit percentage],” Cowen and Company analyst Roman Schweizer wrote in a Wednesday note to investors.
On Monday, which seems like an eternity ago, Teledyne Technologies announced it would acquire FLIR for $8 billion. That follows Lockheed Martin’s plans to buy Aerojet Rocketdyne, which were announced on Dec. 20.
Boeing agreed to pay $2.5 billion to resolve criminal charges that accused the company of hiding information about its 737 Max jetliner. “Boeing’s employees chose the path of profit over candor by concealing material information from the FAA concerning the operation of its 737 Max airplane and engaging in an effort to cover up their deception,” David Burns, acting assistant attorney general of the Justice Department’s Criminal Division, said in a statement. “This resolution holds Boeing accountable for its employees’ criminal misconduct, addresses the financial impact to Boeing’s airline customers, and hopefully provides some measure of compensation to the crash-victims’ families and beneficiaries.” The 737 Max, which the FAA grounded for nearly two years following two deadly crashes, began flying passengers again last month.
Over the Christmas-to-New Year holiday, Congress overrode President Trump’s veto of the fiscal 2021 National Defense Authorization Act and passed a $900 million coronavirus stimulus and a $1.4 trillion omnibus spending measure that funds the government, including the Pentagon until Sept. 30.
Since we last met in December, the State Department approved nearly $4.8 billion foreign arms sales, the largest being a potential $4 billion deal with Kuwait for 24 Boeing-made Apache helicopters. Also of note, a potential $290 million deal with Saudi Arabia for up to 3,000 Small Diameter Bombs, which are also made by Boeing. We’re still waiting to see if UAE signs an F-35 contract with Lockheed Martin before President-elect Joe Biden takes the oath of office on Jan. 20.
The Army has released a new request for proposals of the Optionally Manned Fighting Vehicle, it’s planned replacement for the Bradley Fighting Vehicle. The project was canceled in late 2019 after Army rules left only one bidder for the $45 billion project.
For the latest on the SolarWinds hack, check out the latest from sister publication NextGov here.
From Defense One
Aging ICBMs Must Be Replaced, Not Refurbished, STRATCOM Chief Says // Patrick Tucker
Even the people who once knew how to fix them are "not alive anymore," Richard says.
Lockheed Martin Executive in Charge of F-35, F-22, Skunk Works Dies // Marcus Weisgerber
Michele Evans, who was executive vice president of Lockheed Martin Aeronautics, had taken two medical leaves since 2019.
For Pentagon, Biden Picks Two Obama-era Policy Veterans to Help Austin // Patrick Tucker and Marcus Weisgerber
After passing on Flournoy, Biden taps Kathleen Hicks and Colin Kahl to be Austin's deputy defense secretary and undersecretary for policy.
Lockheed's Proposed Aerojet Rocketdyne Purchase Sets Early M&A Test for Biden // Marcus Weisgerber
The new administration will weigh in on a further consolidation of the U.S. defense industry.
Trump Officials Deliver Plan to Split Up Cyber Command, NSA // Katie Bo Williams
An end to the "dual hat" arrangement has been debated for years — but the timing raises questions. The plan requires Milley's certification to move ahead.
Space Force Troops Get a Name: 'Guardians' // Marcus Weisgerber
VP Pence revealed the moniker for Trump's oft-teased newest military service branch to stand alongside soldiers, airmen, sailors, and Marines.