Defense Business Brief: Biden’s flat defense budget; Lockheed on the F-35 defensive; $549M for faulty Afghan planes, and more.
The Biden administration’s fiscal 2022 budget proposal is expected to request between $704 billion and $708 billion for defense, according to Bloomberg. That’s less, in real terms, than the 2021 budget of about $705 billion, but it’s no deep cut.
Here’s how L3Harris President and COO Chris Kubasik summed up the U.S. budget situation during a March 10 investor briefing:
“We see counteracting dynamics when it comes to global defense spending. On one hand, we have a rapidly evolving environment with persistent threats mainly from China and Russia. These threats are increasingly sophisticated and span multiple domains, consistent with what the national defense strategy and the new administration officials have highlighted. On the other hand, as we're all aware, we have budgetary pressures that stem from the pandemic with deficits widening in the U.S. and around the world. The net of this is an expectation for flattish defense budgets, and a customer focus on procuring more advanced resilience and affordable solutions.”
Lockheed Martin and its surrogates have gone on the defensive after several Air Force generals and lawmakers have raised questions about just how many F-35 fighter jets the Air Force will buy. Robert Martinez, president of the International Association of Machinists and Aerospace Workers, sent a letter to two top aides to President Joe Biden requesting a White House meeting to discuss the F-35 and its deep supply chain. "The program supports more than 254,000 direct and indirect jobs across the country,” Martinez wrote. “These are high-quality, high-skilled jobs that would be nearly impossible to replace if they were to disappear. Therefore, it concerns us to see in recent press that the DoD may be backing away from the planned acquisition of 2,456 aircraft for the U.S. armed services, which in turn could threaten plans for 750+ aircraft for our allied partners and foreign military sales countries.”
The $1.9 trillion coronavirus relief package passed by Congress and signed by President Biden on Thursday, will continue allowing defense companies to seek government reimbursement for pandemic-related expenses.
No one has been held responsible for the $549 million U.S. purchase of 20 refurbished but faulty G.222 aircraft (also known as the C-27A) for the Afghan Air Force, according to a new report from the Special Inspector General for Afghanistan Reconstruction. Sixteen planes were delivered to Afghanistan and four to Ramstein Air Base in Germany. “After delivery to Afghanistan, the aircraft suffered from a low mission capability rate, chronic issues with aircraft sustainment, and multiple safety complaints by the pilots and crews who flew them,” the report states. The 16 planes were scrapped for $40,257, which equates to $2,516 per plane. The remaining four are sitting in storage at Ramstein.
Emirates President Tim Clark issued a scathing rebuke of Boeing’s board of directors over of problems with the 737 Max, 787 Dreamliner, and in-development 777X. Clark gave an interview with The Air Current Editor Jon Ostrower, who writes: “While the pandemic adds to Boeing’s troubles, Clark said the industrial giant’s woes stem directly from focusing too aggressively on shareholder returns and their effect on corporate decision making within senior management and its Board of Directors. He believes that has profoundly affected Boeing’s culture and is at the root of today’s quality issues on the 787 and the twin crashes and grounding of the 737 Max.” Emirates is one of Boeing’s most important commercial customers and the largest operator of 777 aircraft.
Weekend reading: A new report from MITRE details ways the Pentagon could speed up weapon acquisitions. “The task ahead requires aligning and streamlining enterprise processes, shaping culture and incentives, and leveraging partnerships across the DoD, Congress, industry, and our allies. This paper proposes a set of five key disciplines and five strategic initiatives to meet the challenge of accelerating and strengthening our national defense posture in the Digital Age.” Read the report, here.
From Defense One
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Biden Nominates Two Women To Lead Combatant Commands // Marcus Weisgerber
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Approve Lockheed’s Purchase of Aerojet Rocketdyne // Howard P. “Buck” McKeon
The deal would bolster the rocketmaker's ability to serve aerospace and defense clients and shore up a shaky industrial base.
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