Defense Business Brief: Farnborough preview, thoughts + trends; Trade groups balk at NDAA buyback provision; Pennsylvania’s DIB

England did not make it to the World Cup final, but London Town will likely still be buzzing next week as the Farnborough International Airshow kicks off Monday. And while last week’s NATO Summit got a bit prickly, there’s an appetite for unity amid increasing global tensions. 

Dozens of countries, major weapons makers, defense tech companies, and suppliers are expected at the weeklong show. And states’ representatives will be there as well, trying to draw international business. 

Trends to watch are how the U.K. and other European countries are spending their newly padded defense budgets. Are they buying more U.S. weapons? Or are they buying more homegrown tech? And for U.S. companies, what are they pitching?

BAE Systems is teasing a futuristic fighter pilot helmet. Northrop Grumman plans to talk up its F-16 modernization efforts, including electronic warfare system upgrades, and Raytheon will showcase its Coyote counterdrone system: 

“It's the first major show since multiple theaters of operation have been using the Coyote system,” Joseph DeAntona, a Raytheon executive who focuses on land and air defense, told reporters Monday. “I think the customers that are attending Farnborough will be…wanting to know more about it and what it would take for them to potentially consider Coyote as a counter-UAS solution for them.”

And while it’s not flashy, aircraft maintenance and repair could be big—especially as private capital moves in. 

“There's also a ton of interest in the [maintenance, repair, and overhaul] business, for example. We're seeing a lot of private equity and, you know, financial sponsors interested in that space,” Doug Peck, managing director at the consulting firm BCG, told Defense One. “There's going to be no shortage of demand for these aircraft, these systems, over time—whether that's from just the commercial passenger travel market or from the military side. But…the capacity to actually keep up with that growth is much stickier. So you're just seeing backlogs for these basic sustainment facilities and MRO facilities just really, really grow. And therefore the margins that they're going to be able to demand should only look better over time as well.”

It’ll be my first time at the airshow. If you’re there, you’ll likely catch me in Converse singing Fergie’s “London Bridge” in celebration after I file a story.  

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Pushback on buybacks ban. The Chamber of Commerce joined dozens of trade organizations in a bid to get Congress to remove a provision in the 2027 National Defense Authorization Act that would prohibit defense contractors from paying dividends or repurchasing publicly traded stock without a waiver from the Pentagon. 

• “The restriction applies broadly to contractors providing any goods or services … regardless of the dollar value of the contract,” with the Defense Department, trade groups wrote in a July 14 letter to Senate Majority Leader John Thune, R-S.D., Senate Minority Leader Chuck Schumer, D-N.Y., and Senators Roger Wicker and Jack Reed, who lead the Senate Armed Services Committee.
• The letter states the ban would bar large swaths of companies from contracting with the Pentagon and, more broadly, affect Americans’ retirement accounts. 
• “If adopted, Section 815 would harm millions of American retirees and other investors by restricting lawful returns of capital to shareholders, establish a troubling precedent for federal interference in corporate governance and capital allocation decisions, and discourage the private sector from participating in the defense industrial base at a time when Congress should be encouraging greater private-sector participation.” 
• Background: Senate Democrats blocked advancement of the typically bipartisan annual defense policy bill, setting up a showdown for funding the Iran war. Sen. Jack Reed, the ranking member on the Senate Armed Services Committee, said in a statement he couldn’t “vote to proceed to a bill that enables an ongoing war against Iran that Congress never authorized and the American people overwhelmingly oppose.” Then he said: “We also cannot ignore a nearly 45 percent increase in defense spending at a moment when the Pentagon has refused to provide an account for the true cost of this war or submit basic information to Congress.”
• State of play: Following the failed Senate vote, House Republicans unveiled a $90 million reconciliation bill on Wednesday, most of which would fund the Iran war. House Democrats voted to end aid to Israel for the Iran war. 

Spotlight on the Pennsylvania defense industrial base. Wednesday’s Pennsylvania Defense and Innovation Summit hosted by Sen. Dave McCormick, R-Pa., at the Army War College had quite a turnout, with a spate of defense tech company announcements—including $10 billion in defense investments—and a keynote speech from President Donald Trump. 

• JPMorgan Chase pledged $24 million to help finance a new submarine manufacturing facility at the Philadelphia Navy Yard. The investment would be a part of the more than-trillion-dollar commitment to national and economic security efforts made last year. 
• Gecko Robotics announced plans to open a 10,000 square-foot advanced manufacturing plant in Pittsburgh. The plan is for the facility to be a “manufacturing and integration hub where Gecko will work alongside partners from across the Defense Industrial Base to integrate robotics into advanced manufacturing processes with its AI-powered non-destructive testing technologies,” the company said in a news release. 
• Trump’s take: “Since I took office, defense investments in Pennsylvania are up by nearly 25 percent,” the president claimed. “And today, we're adding [$]10 billion, and I think the number is going to end up being about $19 or $20 billion dollars. And we'll be building two massive national security, multi-mission vessels at the beautiful and historic Philadelphia shipyard.”

Making moves + other news

• Bryan Fenton, the former head of Special Operations Command, has joined counter-UAS tech maker RADD as a senior advisor, Defense One has learned. Fenton also has advisor roles with a16z’s American Dynamism firm, and HawkEye 360, a geospatial intelligence company. The retired general is also a board member at Mantech and an executive for the Carlyle Group.
• The Army broke ground on a $635.2 million ammunition plant in Middletown, Iowa, the service announced Wednesday. The Future Artillery Complex at the Iowa Army Ammunition Plant is expected to produce 432,000 M795 artillery rounds a year once fully built, according to a news release.
• The Navy awarded Florida State University $88 million to research and develop testing systems, modeling, and simulation for shipboard power and energy systems.
• The U.S. war on Iran has spurred $12.3 billion in venture capital investment in defense technology, the Financial Times reports. Last year, companies in that sector raised nearly $10 billion. 
• Venture capital firm Red Cell Partners added Glenn Youngkin, the former Virginia governor, to its board as chairman. The company invests in defense tech companies Epirus, Red 6, Reveal Technology, and Valinor. (Fun fact: Veronica Daigle, who leads the firm’s national security team, was on stage at Defense One’s Tech Summit. Catch the recap here.)
• Vatn Systems announced its “all-in-one autonomous mine countermeasures system” called SIGURD, which can detect, track, and neutralize sea-based mines. 
• BigBear AI is expanding its generative AI platform for national security use.