Marines load a joint light tactical vehicle onto an Air Force C-130 Hercules at Misawa Air Base, Japan, Dec. 18, 2021, following the conclusion of Resolute Dragon, a bilateral field training exercise between the Marine Corps and Japan Ground Self-Defense Force.

Marines load a joint light tactical vehicle onto an Air Force C-130 Hercules at Misawa Air Base, Japan, Dec. 18, 2021, following the conclusion of Resolute Dragon, a bilateral field training exercise between the Marine Corps and Japan Ground Self-Defense Force. U.S. Marine Corps / Lance Cpl. Jonathan Willcox

Defense Business Brief: Lockheed-Aerojet suit clouds M&A outlook; Oshkosh’s hybrid JLTV, Pentagon needs new computers; and more

The Federal Trade Commission’s suit to block Lockheed Martin’s planned buy of Aerojet Rocketdyne is reverberating throughout the defense industry. More than a half-dozen defense executives I spoke with this week believe the FTC ruling will lead to fewer large mergers and acquisitions for the rest of the Biden administration.

“This is the agency's first litigated defense merger challenge in decades,” the FTC noted early in its Tuesday statement.

“The fact that the FTC highlighted that in its first paragraph…while it is a statement of fact, it potentially suggests a changed attitude toward defense industry consolidation in a very consolidated marketplace,” said Jeff Bialos, an antitrust lawyer who served as deputy defense undersecretary for industrial affairs from 1999 to 2000. 

The FTC rejected Lockheed’s proposal for what’s known as a behavioral remedy, a measure that would have required the company to supply rocket motors to its competitors. The proposal was similar to the one the FTC imposed on Northrop Grumman when it bought Orbital ATK in 2018.

“The clear headline, in my view, [is] that the FTC declined to use a behavioral remedy, as they did in the Northrop-Orbital case and as they [have] in a number of defense cases,” Bialos said.

Several executives worry that the FTC has weakened the Defense Department’s place in antitrust reviews. We still don’t know whether the Pentagon supported the deal. DOD released a benign statement talking about its role in the process. In its court filing, the FTC redacted the Pentagon’s opinion on the sale.

Lockheed has until Feb. 24 to decide whether to defend itself in court or step away from the deal. Meanwhile, Aerojet’s future is unclear. The company is an essential supplier of rocket motors. For the past year and change, Lockheed argued it would make Aerojet a more viable supplier as the Pentagon has an increased demand for missiles. Aerojet’s stock fell sharply this week after the FTC announced its decision.

Defense consultant Loren Thompson wrote that Aerojet could become a private equity target. Some questioned whether the FTC would allow other defense companies without a missile business to acquire Aerojet. Only time will tell.

Oshkosh unveiled a hybrid Joint Light Tactical Vehicle, branded eJLTV. The truck runs on batteries that charge when it's using its diesel engine. “The eJLTV is capable of running fully electric and offers our military customers an affordable way to electrify their light tactical wheeled vehicle fleets without compromising the off road performance or superior protection necessary in combat operations,” CEO John Pfeifer, the company’s president and CEO, said Wednesday on the company’s quarterly earnings call. “We believe this represents a very strong technical advantage for JLTV customers.”

That’s because when running on batteries, the truck is silent, just like electric cars. But since it also has a diesel engine, it doesn’t need to be plugged in to charge, like a fully electric vehicle. The hybrid truck can also use its batteries to power other equipment, Oshkosh says.

So why does this all matter? The Army is recompeting its JLTV contract this year. Oshkosh is expected to compete against GM Defense, Navistar, and AM General. While the Army might not be looking at buying a hybrid JLTV yet, Oshkosh developing one on its own shows the company is making investments in its products for the future.

The Pentagon’s testing office is out with its annual assessment of dozens of weapon programs. But this year’s public report is a bit different in that it doesn’t get into the details of problems with specific projects. Valerie Insinna over at Breaking Defense reported in December that the Director of Operational Test & Evaluation office would restrict what’s made public out of fear it would allow America’s enemy to exploit the deficiencies in the military’s weapons. Congress was given an unfiltered report. FWIW, this year’s public report references the “Controlled Unclassified Information” version 40 times.  

The Pentagon really, really, really, really needs new computers. That’s according to Maj. Mike Kanaan, the director of operations at the Air Force/MIT Artificial Intelligence Accelerator. Kanaan this week tweeted “an open letter echoing some recent servicemember frustrations regarding computers in the Department of Defense. These are voices that have gone unheard for far too long.” You really should read this, here.

Weekend reading: The Government Accountability Office is warning that the Air Force is looking to use unproven technologies in Boeing’s redesign of the KC-46 tanker’s refueling system. “But the Air Force now plans to commit to the new design of the remote vision system before all of the technologies are adequately developed—risking further delays and increased costs,” GAO said in a new report that you can read here.


From Defense One

FTC Moves to Block Lockheed Buying Aerojet Rocketdyne // Marcus Weisgerber

Regulators say the deal would harm Lockheed's rivals.

SecDef Austin Summons Hypersonics CEOs // Marcus Weisgerber and Patrick Tucker

Pentagon meeting set for next week in race to outpace China and Russia.

US to Russia: Explain Your Military Buildup to the UN // Jacqueline Feldscher

The UN Security Council will meet on Monday in the latest diplomatic move amid tensions.

US Sends More Military Equipment to Ukraine // Marcus Weisgerber and Tara Copp

Latest deliveries to arrive today as DOD searches its inventory for more to send.

Court Hits Pause on Vaccine Mandate for DOD, Other Federal Employees // Eric Katz

A judge said Biden overstepped his authority in imposing the mandate, which has led more than 97% of feds to get fully or partially vaccinated.

After 20 Years of Civilian Drone Strike Deaths, Pentagon Creates An Office to Stop More // Tara Copp

The military keeps repeating mistakes and is not ready for future fights because the lessons learned have not been instilled throughout the DOD, an independent review found.

Russia Is Teaching a Master Class in 'Decision-Centric' Warfare // Bryan Clark and Dan Patt

Pentagon leaders should take notes.

What If Moscow Cancels Airline Overflight Rights? // Elisabeth Braw

The interconnected world gives Russia tools that the Soviet Union never had.

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.