Defense Business Brief: Shakeup at Rebellion Defense; Dubai Air Show preview; Viasat layoffs; and more...
The co-founder of software startup Rebellion Defense, Chris Lynch, has officially stepped away from the company he helped build after almost five years. His last day was Sept. 20.
Lynch, who was previously in charge of the Defense Digital Service, previewed his departure earlier this year, but stayed on as an interim chief strategy officer and advisor.
“After 4.5 years, I am ready to tackle new endeavors to ensure our nation’s military has the greatest technology to overcome any adversary,” Lynch told Defense One via email. “I remain one of the largest shareholders in Rebellion and am very excited for what the new leadership brings in this next phase.”
Now, the venture-capital backed company has a new executive lineup. Tony Ieradi was named chief operating officer in June, while Jane Lee and Karen Dacres became chief government affairs and chief legal officers, respectively, in September. Barry Sowerwine, a longtime adviser, stepped in as the interim CEO in May.
Defense One spoke with Ben Fitzgerald, also a longtime investor, who is now the executive chairman, to understand what the changes mean for the company and what to expect in the coming months.
“We are more committed and excited today than we were four years ago,” Fitzgerald said. “We have a team in place on this work that has worked with Chris, and is working with the whole company to continue on the original mission and vision…as we get into execution and scaling over time.”
The company has seen a 50 percent increase in its annual contract value this year, including success with its automated cyber tool, Nova, which the Army and National Nuclear Security Administration use. That boost in production is the kind of movement that startups working with the Defense Department need to minimize risks, Fitzgerald said, especially as Congress still needs to pass a budget for 2024.
“Where startups get de-risked and get to scale is in production with production contracts with regular defense organizations,” he said. And if the Pentagon wants to measure its success courting startups, it’s all about getting them on contracts “with Big Army, Big Navy, in programs of record and in systems of record, not just with research and development funding on things that might get filled at some point in the future.”
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What to expect at the Dubai Air Show
Major U.S. defense contractors will convene in the United Arab Emirates next week for the 2023 Dubai Air Show—set to be Dubai’s largest yet. Overseas air shows generally focus on the commercial side of the aerospace industry, but the Israel-Hamas War will undoubtedly put an added focus on global defense.
More than 1,400 exhibitors from almost a hundred countries are expected at the show. Post-COVID, companies are trying to re-establish their presence at these shows, said Eric Fanning, CEO of the Aerospace Industries Association, which convenes industry and government officials at international trade shows.
The Dubai Air Show comes as the conflict in the Middle East progresses rapidly. The Pentagon is pushing for defense firms to increase production as the U.S. sends weapons to Israel and Ukraine and ramps up its presence in the Pacific.
“Now that you’re adding a new conflict, which could cause things that were destined to Ukraine to possibly be diverted to Israel, it just turns up the volume on that conversation,” Fanning told Defense One.
A number of Chinese companies will also attend the show, as China builds its influence in the Middle East. China has maintained a strategy of “balanced diplomacy” in the region—a strategy that could be tested in light of the Israel-Hamas war. At the show, Chinese representatives will likely try to strengthen relationships with regional players and show its military products as an alternative to Western systems.
Russia will also have a presence on the show floor, as leader Vladimir Putin searches for ways to prove his country is still an international player. Roscosmos, a Russian state-run space company, is listed as an exhibitor. The Russian Federation will be hunting for what it needs for its war in Ukraine, as sanctions have strained its industrial base and the country’s export market is declining.
Viasat slashes 10 percent of workforce
The $2.33 billion satcom company announced it would cut 800 jobs from its global workforce, according to SEC filings on Nov. 2. The cuts will cost about $45 million for severance payments, benefits and other payments, most of which would occur in the latter half of fiscal year 2024.
US, Switzerland ink Patriot deal
Switzerland, a military neutral country, is buying the most advanced version of Lockheed Martin’s Patriot missile system, as part of the country’s Air2030 modernization program. The country announced on Oct. 31 it will pay 300 million francs (about $334 million) for an undisclosed number of missiles, which will be delivered in 2028 and 2029. Switzerland is the 15th country to buy the new version of the missile, according to Lockheed. Its Air2030 effort also includes buying 36 F-35 fighter jets from Lockheed, a purchase that was finalized last year.
The newest version of the missile, called Patriot Advanced Capability-3 (PAC-3) Missile Segment Enhancement (MSE), is designed for longer-range ground-based air defense. “PAC-3 MSE is a high-velocity interceptor that defends against incoming threats, including tactical ballistic missiles, cruise missiles, advanced threats, and aircraft,” Lockheed said.
Palantir goes to bat for primes
Software companies unite to save the prime contractors? During Palantir’s third-quarter earnings call, Shyam Shankar, the company’s chief technology officer and executive vice president, said the best way to “disrupt” prime contractors is to turn them into customers.
“There's a lot of talk in defense tech circles about disrupting the primes. And I think there's an incredible opportunity to transform what's possible with software,” he said, touting the company’s deals with major defense companies such as Northrop Grumman, which is helping with an Army’s TITAN prototype. “America needs our primes…our national security depends on them.”
Palantir has deepened its government business with a dedicated web services branch and expects demand to increase more than 10 percent year-over-year, the company announced.
- The Navy has a new chief information officer. Jane Rathbun, who was previously the Navy’s CTO and deputy secretary for information, has been acting in the role since March, when her predecessor, Aaron Weis, left for Google. Rathbun assumed official duties on Oct. 29.
- Rocket Labs, a launch and space systems company, tapped a former Space Force general for its board of directors. Nina Armagno, a retired lieutenant general, was U.S. Strategic Command’s director of policy and planning.
Correction: An earlier version of this report misidentified Barry Sowerwine's role at Rebellion Defense.