AIA’s Fanning: Civil aviation’s nosedive endangers Pentagon supplies

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  November 18, 2019 | Information, Other Defence

  Canada needs to start seeing Russia and China as 'adversaries,' says ex-CSIS chief

  Richard Fadden said Ottawa needs to acknowledge the United States is withdrawing from global leadership Murray Brewster Canada needs to be "clear-eyed" about the threat posed by Russia and China — and the power vacuum at the global level left by the United States' growing isolationism — a former national security adviser to prime ministers told an audience of military and defence officials Friday. "The risks posed by these two countries are certainly different, but they are generally based on advancing all their interests to the detriment of the West," Richard Fadden, former national security adviser to both Prime Minister Justin Trudeau and his predecessor, Stephen Harper, said in a speech to the Conference of Defence Associations Institute (CDAI) Friday. "Their activities span the political, military and economic spheres." Fadden, who also served as the head of the Canadian Security Intelligence Service and as deputy defence minister, made the remarks at the CDAI's annual Vimy Dinner in Ottawa. He said his criticism was not political or aimed at any particular government, but was meant to prompt public debate about security and defence policies — a subject that was virtually ignored during the recently concluded federal election. Both China and Russia have demonstrated they are prepared to "use virtually any means to attain their goals," while the U.S. has effectively withdrawn from the world stage, Fadden said. That emerging vacuum means Canada will have to work harder with other allies to address global crises at times when the Americans are unable, or unwilling, to lead. 'Clear limits to what we will accept' But to do that, Fadden said, Canada will have to be "clear-eyed" about the way the world has changed over the last decade or more. Canada should "recognize our adversaries for what they are, recognize we have to deal with them, but draw clear limits to what we will accept," he said. Ottawa also has to recognize, he said, that the old post-Cold War world order "with comprehensive U.S. leadership is gone, and is not coming back in the form we knew." In some respects, Fadden's remarks are a more blunt and urgent assessment of the geopolitical landscape than the one Foreign Affairs Minister Chrystia Freeland delivered in a landmark speech in June 2017, when she warned Canada could no longer depend upon U.S. protection and leadership. The comments by the former top security official came just as French President Emmanuel Macron also was lamenting the loss of American leadership, saying NATO is facing "brain death" without Washington's full involvement. When he was director of CSIS a number of years ago, Fadden warned about increasing Chinese influence over Canadian municipal and provincial politics. He said during his speech Friday that "the West does not have its act together as much as it could and should" and its response to emerging threats has been dysfunctional. Meanwhile, Fadden said, the rise in violent radicalism in the West is no longer being confined to Islamist extremism. "Right-wing terrorism is growing and, like its cousin jihadist terrorism, it is a globalized threat," he said. "We will ignore it at our peril." His speech also touched on emerging threats in cyber warfare. Many western democracies have not felt threatened in the globalized world of the last three decades — but that era is ending now, said Fadden, and Canadians have to face new sources of risk. "This issue is especially visible in Canada," he said. "We are surrounded by three oceans and the U.S., so we don't really feel threatened when, in a totally globalized world, that is unrealistic." https://www.cbc.ca/news/politics/canada-russia-china-fadden-trump-1.5357109

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  June 10, 2019 | Information, Aerospace, Naval, Land, C4ISR, Security, Other Defence

  Raytheon Technologies Corporation: UTC, Raytheon make marriage official

  Updated with comments from officials on June 10, 2019, at 9:21 a.m. ET. WASHINGTON — Raytheon and United Technologies Corporation will officially merge into a new entity called Raytheon Technologies Corporation, with the deal taking place in first half of 2020. Following Saturday reports that a merger was imminent, the two firms made the news official Sunday, launching a website about the planned all-stock deal. On Monday, Raytheon CEO Thomas Kennedy and UTC CEO Greg Hayes held a conference call, where the two revealed that discussions about a potential merger started in summer 2018, before taking off in earnest this January. “It's like a mirror,” Kennedy said of UTC, noting both companies invest heavily in new technologies while remaining “platform agnostic.” Hayes added that there is roughly a one percent overlap between the two firms portfolios. The new company will be roughly 50-50 defense and commercial, with plans to spend $8 billion on R&D after combining. Much of that funding will go towards high-end defense programs, including, per a news release, “hypersonics and future missile systems; directed energy weapons; intelligence, surveillance, and reconnaissance (ISR) in contested environments; cyber protection for connected aircraft; next generation connected airspace; and advanced analytics and artificial intelligence for commercial aviation.” The new firm has a “tremendous opportunity to invest” in the future, Hayes said. “The resources of the combined company will allow us to do things on a stand alone basis that would have been very difficult” individually. Hayes also expressed his belief the Pentagon would not see major issues, given the limited overlap. However, other trouble may be brewing; during a Monday interview with CNBC, U.S. President Donald Trump expressed concern about the agreement. While being billed as a “merger of equals,” UTC shareowners will own approximately 57 percent and Raytheon shareowners will own approximately 43 percent of the combined company. A spokesperson for Raytheon confirmed to Defense News Sunday that the combined company will be based in the greater Boston area. Raytheon is based in the Boston suburb of Waltham, while UTC is based in Farmington, Conn. Per a news release, the new company will have approximately $74 billion in pro forma 2019 sales. The release also highlights that the merged company will be a major player in both the defense and commercial aerospace markets, giving greater market resiliency. Byron Callan, a defense analyst with Capital Alpha Partners, wrote Sunday in a note to investors that the merger may be a sign of market trends to come. “An RTN-UTX deal may be a signal (a siren?) that 1) this U.S. defense cycle is peaking, and firms need to start repositioning for growth in 2021 and beyond; 2) Maybe the commercial aerospace outlook is looking wobbly too and Western firms need to hedge against fallout from a U.S.-China trade split. A U.S. recession is overdue; 3) Defense firms will need to fund more of their own R&D in the future so joining a larger firm will limit margin pressure which could be evidenced in the 2020s,” Callan wrote. Callan also sees “some overlap in the defense portfolios” for the two companies, primarily through the Mission Systems segment of Collins Aerospace. That could require some small divestitures down the road as the deal is finalized, but there do not appear to be any major issues that would lead to objections from the Pentagon. “Both are active in defense communications, though Collins has a larger share. Both have imaging/IR products, though Raytheon has a larger product offering,” he wrote. “Collins provides large space imaging mirrors used in surveillance satellites but it's not clear to us if there is an overlap with Raytheon's classified space payload work.” The deal should create a mammoth defense contractor second only to Lockheed Martin. Raytheon already ranked number two on the most recent Defense News Top 100 list, with $23.5 billion in defense revenues, 93 percent of its overall revenue total; UTC has $7.83 billion in defense revenues, a mere 13 percent of its overall figures. However, that UTC number came before its acquisition of Rockwell Collins and its $2.28 billion in defense revenues, which will naturally increase United's overall number. The move comes after 18 months of major defense consolidation. In addition to UTC's move on Rockwell, there was the General Dynamics acquisition of CSRA, Northrop Grumman's acquisition of Orbital ATK, and L3 and Harris announcing in Oct. 2018 that they would combine to form what at the time appeared to be the seventh largest global defense firm. https://www.defensenews.com/industry/2019/06/09/raytheon-technologies-corporation-utc-raytheon-make-marriage-official/

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  November 14, 2019 | Information, Aerospace, Naval, Land, C4ISR, Security

  The real obstacle for reforming military spending isn’t in the defence ministry. It’s the Treasury Board

  KEN HANSEN Ken Hansen is an independent defence and security analyst and owner of Hansen Maritime Horizons. Retired from the Royal Canadian Navy in 2009 in the rank of commander, he is also a contributor to the security affairs committee for the Royal United Services Institute of Nova Scotia. For people inside the Department of National Defence, a minority Parliament – coupled with election promises for increased social spending and tax cuts – represents an uneasy calculus. Defence spending is always on the chopping block because it represents the largest pool of discretionary spending in the federal budget, and every party spent the recent federal election campaign being vague about military policy – offering some kind of oversight-body reform or scrutiny over the billions of dollars that have been earmarked, even as they lent their support to ensuring the military has the equipment it needs. In particular, the single largest program in Canadian defence history – the Canadian Combat Ship plan for 15 warships – will be a tantalizing target for politicians looking to get rid of perceived fat. Such cuts to shipbuilding programs have even already become normalized: The order for Halifax-class frigates were trimmed to 12 from 18 in 1983 and the Iroquois-class destroyers to four from six in 1964, to name just two. The political leaders weren't wrong when they said the military procurement system is broken. But regardless of which party had won this past election, and no matter what tweaks at the edges that the Liberal minority government and its potential supporters pursue, the reality is that the core issue remains unaddressed: Treasury Board's bulk approach to purchasing the country's military kit. Treasury Board policy states that bulk buys are how military procurement should be done, to ensure the lowest per-unit cost. But this forces tough decisions about what to buy, since the larger the order, the longer it will take to produce them all – not to mention the problems involved with trying to predict the future of warfare. Information systems become outdated in five years; weapons and sensors in 10. With a planned operating life of 25 years, any ships ordered today will be out-of-date by the time the first are delivered, and fully obsolete by the time the last one arrives. Block purchasing leads to block obsolescence. Traditionally, when technological change threatens to render military systems obsolete, the best way to hedge was to order in batches of the smallest number acceptable. In the years before the world wars, for instance, countries working to build competent naval forces put less emphasis on fleet numbers and more on technology and industrial capacity until the last moments before conflict. Technological competence was as important as numbers for fleet commanders. Another outcome of bulk buys is that the volume means that they happen only every two to three decades (or longer, in the worst cases). With such lengthy dry spells between purchases, it is impossible to retain corporate knowledge in either the defence or civilian branches of government. More frequent purchasing keeps the process alive in both practice and concept, with lessons learned that can be implemented by the same people who made the mistakes in the first place. Such irregularly timed purchases have created desperation among defence planners whose vision of the future consists of short golden days of competence and pride, followed by long years of rust-out and irrelevance. Unwittingly, the dark decades were in large part of the military's own making because of its desperate desire to acquire the absolute best model available – a practice known as “gold-plating” – instead of working steadily to build capacity and skill that would address long-range fleet needs. This is a collision of interests. The Treasury Board looks only at capital-acquisition decisions from the perspective of the buyer. It's left to the military to worry about how long they may have to operate obsolescent or obsolete equipment and systems, and to do the necessary mid-life upgrading, which is partly why costs balloon spectacularly. Life-cycle cost data is actually far more important that the initial sticker shock of the newest and shiniest model advocated by the military's leadership. The mindset needs to change. Politicians who implement bureaucratic change will probably see some improvements in decision-making. But the biggest obstacle to defence procurement is that bulk purchasing is our lone approach, and that it happens only every few decades. Regular, planned capital acquisition is the best path forward, but all paths to the future must first run through the Treasury Board. No amount of political policy adjustment can change that. https://www.theglobeandmail.com/opinion/article-the-real-obstacle-for-reforming-military-spending-isnt-in-the-defence/