Army Makes Prudent Cuts Funding for Research Procurement

On the same subject

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  November 12, 2018 | International, Aerospace

  Italy signals slowdown on F-35 orders

  By: Tom Kington ROME — Italy will stretch out the order of F-35 fighter jets, buying six or seven of the aircraft in the next five years instead of the previously planned 10 jets, a government source told Defense News. The decision follows a review of the program by Italy's populist government, which took office in June and is mulling defense spending cuts to pay for social welfare programs and cover tax cuts. The source said the plan did not envisage a reduction in orders, merely a slowdown of intake, which would leave the decision of the total F-35 purchase to a future government. Previous governments planned to buy 60 F-35As and 30 F-35Bs for a total of 90 aircraft. The new government will focus on spending plans over its five-year mandate and not beyond, the source said, adding that discussions are underway with the U.S. about the change in schedule. The decision on the slowdown keeps with Italian policy on the F-35 set out by Defence Minister Elisabetta Trenta after she took office in June. “What I would like to do is lighten the load, since we have other spending commitments in Europe. We will try to stretch out deliveries instead of cutting the order, which would reduce offsets and mean penalties,” she told Defense News at the time. Italy has taken delivery of 10 F-35As and one F-35B. Two of the "A" models as well as the "B" model are being used for training in the U.S., while eight "A" models are now based at the Italian Air Force's base in Amendola, southern Italy. Trenta was tapped for office by the Five Star party, one of two political parties in Italy's current coalition government. Five Star politicians took a hostile line toward the F-35 program before taking office, at one point promising to scrap it. However, a defense spending document released last month suggests the government will maintain spending on the program in the next two years, with €766 million (U.S. $874 million) due to be spent in 2019 and €783 million in 2020. Those figures should be treated as provisional until the overall budget is signed in Parliament in the coming weeks. Five Star politicians have also shown hostility toward another U.S. defense program — the ground station planned in Sicily to support the Mobile User Objective System, or MUOS, network, a U.S. Navy-run satellite network providing voice and data communications to U.S. military personnel and platforms around the world, even when they are under thick forest canopies. Long held up by legal challenges in Sicily amid health fears, sources have said the MUOS antenna in Sicily could soon see final approval from the Italian government. https://www.defensenews.com/air/2018/11/09/italy-signals-slowdown-on-f-35-orders

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  November 25, 2024 | International, Aerospace

  Thales denies wrongdoing as Anglo-French bribery probe hits shares

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  August 14, 2020 | International, Land

  AM General CEO on acquisition by a private equity firm

  WASHINGTON ― KPS Capital Partners is acquiring Humvee-maker AM General, the private equity firm announced last month, marking a new chapter for the South Bend, Indiana-based vehicle maker. AM General President and CEO Andy Hove will continue to lead the company, and KPS Partner Jay Bernstein said the firm would continue to build on the ubiquitous Humvee, leveraging the company's “research, technology, innovation and new product development, as well as its heritage and iconic brand name.” The Humvee appears to have some growth ahead. For one, U.S. Army budget documents call for $1.5 billion through 2025 to pay for modernization of its fleet of High Mobility Multipurpose Wheeled Vehicles and their up-armored variant. That can include replacing major components, applying new technologies or replacing vehicles entirely. After the Army reaches its procurement objective for the Joint Light Tactical Vehicle, made by Oshkosh, it will have an enduring requirement for 54,800 Humvees. Otherwise, AM General ― which has advertised both its Brutus 155mm and Hawkeye 105mm mobile howitzers ― is expected to participate in the Army's mobile howitzer shoot-off evaluation at Yuma Proving Ground, Arizona, next year. Meanwhile, the Army is expected to complete a new tactical wheeled vehicle strategy in fiscal 2021, which has thus far received congressional support, per the House and Senate versions of the annual defense policy bill. Hove, who has said KPS will continue to execute AM General's existing strategy, spoke with Defense News on Aug. 6. This interview has been edited for brevity and clarity. Private equity firm KPS Capital Partners is in the process of acquiring AM General. At this preliminary stage, what would you say are KPS' plans and vision for the company? I think [KPS partner] Jay Bernstein represented it in his quote in the announcement that they feel really good about the capabilities of AM General and the strategy we've been executing. We've discussed with them where we can go. They're confident in our business and the growth prospects of AM General. They feel good about and stand behind our strategy, and we're going to work together with them. Will the company focus more on the Humvee, or do you see it becoming more flexible? What is the future for the Humvee? Who are its customers these days? To say we're only focused on the Humvee today would not be a correct premise. We've made investments across the board, in base automotive systems, and then automotive systems that have a particular special use. Our core focus is in solving very complex mobility challenges for customers. So the Humvee has a great future. I would offer that you turn to not what I say about what the Army will do but what the Army says they're going to do on the Humvee fleet, which is to steadily and systematically manage a very large fleet by systematic replacement of that fleet and recapitalization of that fleet going forward. They've been buying new-built Humvees to replace old Humvees over the last four years at a pretty heavy clip and have announced their intention to continue to do that going forward. We're obviously going to focus on the Humvee because there's significant demand. It is today the world's leading military 4x4 in its class, and we build more of them than any other military vehicle manufacturer in the world, and especially more than anybody in our weight class. That won't be the only thing we invest in. You can see our investments in the Hawkeye, which brings game-changing breakthrough technology [in relation to] how artillery systems are moved around and employed on the battlefield, together with a whole other range of implementing technologies such as autonomous navigation, off-board power and those kind of things. The U.S. Defense Department is an important customer, but a considerable portion of our businesses is global business, so we take a global view of how we solve mobility challenges for our customers around the globe. The Army recently issued a request for information about replacing heavy trucks. Is that a potential opportunity? We certainly feel like we have something to offer, a range of things to offer there, and that RFI's only been out for a couple of weeks. We'll will certainly take a closer look at that. We're also taking a look at the JLTV competition they announced back in February. Defense News recently characterized AM General as “largely stagnant” since losing the competition for the JLTV in 2015 to Oshkosh. Do you want to push back at all to talk about AM General's time under McAndrew & Forbes? The JLTV decision was 2015, and the four years since the announcement on the JLTV competition we've built more military vehicles than Oshkosh or any other military vehicle manufacturer by a long shot, and sold them to more customers around the globe than anyone else. I think that's far from being stagnant. There are a lot of adjectives you can apply to the company. “Stagnant” would not be the one I would apply. Private equity firms will typically set up companies they buy for faster growth, and then potentially that'll lead to a future sale. Do you think that's something that might happen here, and what do you predict? Is there any indication of time horizons for KPS? KPS has made a lot of smart investments, they have a pattern, but they're not going to be pigeonholed into a particular time frame for a next-step strategy. https://www.defensenews.com/interviews/2020/08/13/am-general-ceo-on-acquisition-by-a-private-equity-firm/