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  February 5, 2024 | International, Land

  EU member countries push back on Italy’s call for European army

  The EU is developing a Rapid Deployment Capability force of up to 5,000 troops from member countries for use in non-permissive environments.

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  July 13, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

  Raytheon Technologies CEO On Riding Out The COVID-19 Crisis

  Joe Anselmo Michael Bruno July 10, 2020 When he was United Technologies Corp. chairman and CEO, Greg Hayes took a lot of heat for merging his company with Raytheon to create aerospace powerhouse Raytheon Technologies. But the critics have been silenced as defense has cushioned the company from the battering the commercial downturn has inflicted on its Collins Aerospace and Pratt & Whitney operations. Hayes spoke via videoconference with AW&ST Editor-in-Chief Joe Anselmo and Senior Business Editor Michael Bruno. AW&ST: How long will it take the commercial aviation industry to recover from the COVID-19 crisis? Initially, we thought this was going to be like the severe acute respiratory syndrome (SARS) in 2002-03. We thought it was going to be relatively short-lived, where air traffic would go down for a little while but then gradually recover. I don't think any of us envisioned the morbidity or the scope of this pandemic and its impact on travel. I would say we're looking now at getting back to 2019 in 2023, maybe 2024. It is going to be a slow recovery. Raytheon chief looks ahead Commercial aviation recovery will take years Investing in hypersonics Game-changing technologies for a next-generation narrowbody The good news is we've got plenty of liquidity. We'll see our way through this, but it is going to be a tough road. We are hunkering down for a protracted recession on the commercial aero side. Our aftermarket orders are down 50%-plus at both Collins Aerospace and Pratt & Whitney. That's where a lot of the profits come from. The reason we can spend $2.5 billion a year on R&D for the commercial businesses is because we have this spares business that generates strong cash. When that goes away, it's tough. And as a result, we're going to cut R&D this year by $500 million on the commercial side. Unfortunately, the airlines are not in a position to weather this storm for probably more than another 12 months without government assistance. That's really going to be the key. Do governments in the U.S., Europe, South America and across Asia step up to support what is a critical industry in aerospace? Is the industry underplaying the severity of the COVID-19 downturn? A vaccine is the key, and it has to be widely available. The World Health Organization is working on that, but we're going to have hotspots with this pandemic for the next year or two. So even if the U.S. and Europe are completely vaccinated, what does that mean for travel to Africa, Asia, to the fast-growing markets? I'd almost bifurcate the aerospace industry between a narrowbody recovery and widebody recovery. The narrowbody is primarily domestic, whether it's Europe, the U.S. or even China. That will recover more quickly as people become confident-—there's either a vaccine or they've found new treatment options. But on the international side, we can't fly today into Europe, and we don't want the Europeans to fly to the U.S. We can't go to South America or China. Those routes are going to take much, much longer to recover. The fact is there are so many excess aircraft out there right now that we believe you're going to see more parting out of existing fleets before we see a resurgence. And that's why even when passenger traffic starts to come back, there's probably a full 6-12 months before we're going to see a return to normalcy in our aftermarket organization. Pratt supplies the PW1000G engine option for the Airbus A320neo. How much downside risk is there for -deliveries? We're planning for about a 40% reduction in A320 deliveries this year and next year compared with February 2020 production rates. Airbus would love to build more, but it's not clear to us that customers are going to be around to take more than that. The good news is our market share went from about 42% [of A320neo engines] to north of 50% in the last year. Customers are starting to believe in the geared turbofan because of the fuel efficiency. Do you see the market share between Airbus and Boeing shifting? The order book for the A320 is much stronger today, with all the cancellations that we've seen on the 737 MAX because of delays. We still think the 737 will get back in the air this year, and we continue to work with Boeing on software updates. We firmly believe it's a great aircraft. Keep in mind we have about $2.5 million of content per shipset on the 737. It's going to be a tough couple of years, but we ultimately have faith in the airframe and the certification process. Where are you focusing your future efforts with Boeing and Airbus? We were optimistically cautious about the [proposed Boeing] new mid-market airplane (NMA), but there is a lot of excess capacity now, and it's not clear another evolutionary design is going to be the answer. So our focus right now is the next-generation single--aisle. And we think that's probably been pushed out a couple of years, to maybe 2033 or 2035. They're talking about a 30% efficiency gain from the current single-aisle. Two-thirds of that gain has to come from engine design. At the Paris Air Show last year, we talked about a hybrid electric design [Project 804]. We're going to continue on that path. We're trying to figure out how you can have enough power at takeoff while having a much lower fuel consumption at cruise. And that's where hybrid electric comes in. It's going to take us at least a decade to prove that out. I don't know if hybrid electric is the answer. There are other things that we're working on. But obviously it's got to be something completely different than what we've been building in the past. Governments around the world are taking on huge debt to alleviate the coronavirus crisis. Are you worried that will put pressure on military spending over the long term? You would have to have your head in the sand to not understand what's going to happen to defense budgets over time. When [Raytheon CEO] Tom Kennedy and I first talked about this merger, it was, “What can we do together that we can't do separately?” And it really was bringing the technologies of the two companies together to solve customer problems in new and innovative ways. Defense budgets will go down, but I think the real question is where Defense Department spending is going. I remember talking two years ago with [then-Defense Secretary] Gen. [James] Mattis, and he said, “Bring us innovative solutions, not to fight the last war but to fight the next war.” And the next war, he said, is going to be fought in cyberspace and outer space. The capabilities of the legacy Raytheon business are second to none in space and are outstanding on the cyber side. You marry that up with the manufacturing and material science that Pratt & Whitney brings, with the communication systems that Rockwell Collins brings, and this is going to be a great play. The U.S. Air Force wants more software-driven capabilities, delivered in weeks or even days. How does that square with your businesses, which often involve long-term hardware evolutions? It's making sure that we're continuing to evolve our products. The missiles we're delivering today, such as the SM-3 [interceptor] or the SM-6 [anti-air/anti-surface/-ballistic missile defense] are state of the art, and we continue to find new uses for them. A lot of things will change over time in terms of how the weapons are deployed. Think about the Storm-Breaker missile that we just demonstrated, which has the tri-mode seeker. It can do things the last generation of missiles could never do in terms of going through smoke, fog, dust and sand. The LRSO [Long-Range Standoff nuclear cruise missile] is another example. And the Tomahawk is an established product that we will evolve as the needs of the battlefield change to meet new requirements. That's really what we want to focus on: How do we continue software-driven solutions but also find ways to redeploy and reinvigorate the product line and bring new capabilities to the warfighter? Are you making long-term investments in hypersonics? Hypersonics are a destabilizing technology. There's only so much we can talk about, but we know we're behind the Chinese and probably behind the Russians. I think in 3-5 years we'll be on a level playing field. Our focus has been on defensive systems, using space-based assets to track hypersonics. It's nothing that a ground radar could ever do because they move too fast. And then countermeasures that we could use to defend against hypersonics is the bigger market. We're obviously investing. We've got a program, the HAWC [Hypersonic Air-breathing Weapon Concept], which is an air-breathing hypersonic missile that we're working on. I think we'll flight-test that later this year. Also think about the materials science that Pratt brings. The key to hypersonics is how to keep the electronics from getting fried when you're operating at something like 5,000F. We're investing in cooling materials—that will be one of the big bets that we're going to have to make. Tom Kennedy saw the need to make these investments, and we're going to do that. The other piece is on the space side. There's not a lot that we can say, other than that we think space will be the frontier that will differentiate us—that is, the defense of space assets, as well as using space assets to detect, track and target hypersonic weapons. When the merger of United Technologies and Raytheon was announced, there was a lot of criticism from investors. Now they're happy about how well-positioned the combined company is to weather the COVID-19 storm. There was a lot of pushback from investors, especially from the hedge fund guys. They saw us taking a lower-margin business, and they didn't like the fact that the technology takes 5-10 years to pay off. I was roundly criticized. All I can say is I was an idiot a year ago and now I'm a genius, through no fault of my own. We did this for the long term, and it was completely fortuitous that the merger happened when it did. The commercial businesses won't make any money this year, and they are going to struggle for the next couple of years, but now we've got a rock-solid balance sheet and a lot of cash. And that defense business is going to grow 5-8% this year. We've got a good backlog. I'd like to say it was genius, but it really was just doing what's right for the long term. My goal is to leave this company better than I found it. You have reshaped this company, starting with selling Sikorsky to Lockheed Martin in 2015. Then you acquired Rockwell Collins and moved to break up the UTC conglomerate, and it looked like UTC was going to be a commercial aerospace company. Now comes Raytheon. Are you done, or is there more to come? I'm never done until I'm gone, but we don't need to do anything else big. The driving force [behind the Raytheon merger] was putting two big technology companies together with cyclical balance [between commercial and defense]. Tom Kennedy always felt he was at a disadvantage against the Lockheeds of the world because of the scale of Lockheed versus Raytheon. This gives us the scale to invest and compete head on with the Lockheed Martins and Northrop Grummans, as well as being the largest supplier to both Boeing and Airbus. We have some clout in the marketplace. We've got 700,000 different things that we deliver to customers: missiles, APUs, engines, communications gear. Some we really love; others don't have the returns that we want or require too much investment for a limited market. We hope to have a portfolio review done by the end of the year. And you'll probably see some divestitures, but not big pieces. We also continue to look for technology bolt-ons as we think about what's next in defense and the space and cyber spectrums. Longer term, the big question in my mind is what happens to Rolls-Royce, a great technology company that is facing challenging financial circumstances. We loved the partnership Pratt had with Rolls on International Aero Engines. Could we recreate that someday? Perhaps, but not now. Ian Davis, who's the chairman over there, is a good guy. We always say, “Look, we need to find ways to collaborate so we can take on GE Aviation.” Despite the fact that GE may be on its heels today, they've got over 30,000 engines out there. Their aftermarket will recover, they will get better, and they will be the formidable competitor for both Rolls and Raytheon Technologies for the foreseeable future. We're hearing from Wall Street that you're expected to sell off the Forcepoint business. Forcepoint is a commercial cyber business Tom Kennedy created when he brought a couple of companies together about five years ago. It has some great technology, but it clearly doesn't fit in the portfolio. We'll figure that out in the next six months. How is the integration going? Nothing went according to plan except the merger itself. We sent everybody home the week of March 12 [because of COVID-19], and we were still three weeks away from the merger. So we had to complete the merger and all of the integration remotely. And we had to spin off Carrier and Otis. All of that came to fruition on time and exactly as we had planned while working from home. The resilience and the ingenuity of our folks to figure all this out has probably been the most pleasing. There was some concern that the cultures at Raytheon and the commercial guys at Pratt and Collins would never come together. That is the last thing I worry about. Everything we laid out has gotten done. We're on track for synergies in cost, technology and revenue. The difference is I have yet to have a staff meeting in person. I've got 17 people who work for me, and we do everything on Zoom. Each one of our three board meetings since the merger has been done on Zoom. If you had told me 3-4 months ago that we would be working from home for a good deal of time, I'd have really panicked. But we figured it out. https://aviationweek.com/ad-week/ad-week-video-interviews/raytheon-technologies-ceo-riding-out-covid-19-crisis

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  May 23, 2019 | International, Aerospace, Naval, Land, C4ISR, Security, Other Defence

  Contract Awards by US Department of Defense - May 22, 2019

  NAVY Raytheon Co., Fullerton, California, is awarded a $234,640,402 fixed-price-incentive, firm-target contract for the low-rate initial production of 23 Joint Precision Approach and Landing Systems. In addition, this contract procures three production and installation engineering development model unit upgrade kits, engineering change proposals, and associated data. Work will be performed in Fullerton, California (68 percent); Cedar Rapids, Iowa (22 percent); and Indianapolis, Indiana (10 percent), and is expected to be completed in August 2023. Fiscal 2019 other procurement (Navy); and fiscal 2019 shipbuilding and conversion (Navy) funds in the amount of $49,134,484 will be obligated at time of award, none of which will expire at the end of the current fiscal year. This contract was not competitively procured pursuant to Federal Acquisition Regulation 6.302-1. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity (N00019-19-C-0020). Raytheon Missile Systems, Tucson, Arizona, is awarded a $151,468,431 firm-fixed-price, cost-plus-fixed-fee, indefinite-delivery/indefinite-quantity contract for integrated logistics support and repairs for the sustainment of the AIM-9X Block II and Block II+ missiles. These services are in support of the Navy, Air Force, and the governments of Australia, Belgium, Denmark, Finland, Israel, Japan, Korea, Kuwait, Oman, Malaysia, Morocco, Netherlands, Norway, Poland, Romania, Saudi Arabia, Singapore, Switzerland, Taiwan, and Turkey under the Foreign Military Sales (FMS) program. Work will be performed in Tucson, Arizona (90.7 percent); Cheshire, Connecticut (7 percent); Andover, Massachusetts (0.7 percent); Burlington, Massachusetts (0.6 percent); Heilbronn, Germany (0.5 percent); and various locations within the continental U.S. (0.5 percent), and is expected to be completed in May 2022. No funds will be obligated at time of award; funds will be obligated on individual task orders as issued. This contract was not competitively procured pursuant to 10 U.S. Code 2304(c)(1). The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity (N00019-19-D-0023). Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is awarded $11,336,274 for modification P00003 to a previously awarded cost-plus-incentive-fee contract (N00019-19-C-0004). This modification exercises an option for deployment and operation of test aircraft in support of the F-35 Lightning II development, production, and sustainment for the Air Force, Navy, and non-U.S. Department of Defense (DoD) participants. Work will be performed in Lakehurst, New Jersey (70 percent); and Eglin Air Force Base, Florida (30 percent), and is expected to be completed in March 2020. Fiscal 2019 research, development, test and evaluation (Air Force and Navy); and non-U.S. DoD participant funds in the amount of $11,336,274 will be obligated at time of award, none of which will expire at the end of the fiscal year. This option combines purchases for the Air Force ($8,791,728; 78 percent); Navy ($224,464; 2 percent) and non-U.S. DoD participants ($2,320,082; 20 percent). The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. Raytheon Co., Fullerton, California, is awarded $8,997,334 for modification P00030 to a previously awarded cost-plus-incentive-fee contract (N00019-16-C-0052) to design, prototype, and test a replacement Joint Precision Approach and Landing System Ship Global Positioning System Sensor Unit (SGSU). This resolves obsolescence driven by part shortages in the Digital Integrated Global Positioning System Anti-Jam Receiver, a major subassembly of the SGSU. Work will be performed in Cedar Rapids, Iowa (59.4 percent); Fullerton, California (40.4 percent); and Indianapolis, Indiana (0.2 percent), and is expected to be completed in July 2021. Fiscal 2019 research, development, test and evaluation (Navy) funds in the amount of $8,997,334 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. Computer Systems Center Inc.,* Springfield, Virginia, is awarded a $7,474,901 indefinite-delivery/indefinite-quantity contract to perform up to 51,180 hours of concept and requirements development and system engineering services for the F-35 Lightning II Offboard Mission Support Integrated Product Team. Work will be performed in Springfield, Virginia (60 percent); China Lake, California (20 percent); Arlington, Virginia (10 percent); and Fort Worth, Texas (10 percent), and is expected to be completed in May 2024. Fiscal 2019 working capital funds (Navy) in the amount of $205,572 will be obligated at time of award, none of which will expire at the end of the fiscal year. This contract combines purchases for the Navy ($4,858,686; 65 percent); and the Foreign Military Sales customers ($2,616,215; 35 percent). This contract was not competitively procured pursuant to Federal Acquisition Regulation 6.302-1. The Naval Air Warfare Center Weapons Division, China Lake, California, is the contracting activity (N68936-19-D-0035). AIR FORCE Sierra Nevada Corp., Sparks, Nevada, has been awarded a $74,902,132 definitive C-type contract for installation of a Degraded Visual Environment System (DVES), which improves situational awareness to pilots and aircrew operating in DVE conditions by adding new functional capabilities to the HH-60G. This contract provides for the procurement, installation, and integration of the DVES solution on 85 HH-60G helicopter aircraft. Work will be performed in Sparks, Nevada, and is expected to be complete by May 21, 2024. This award is a result of a competitive acquisition resulting in three offers received. Fiscal 2019 other procurement funds in the amount of $19,155,984 are being obligated at the time of award. Air Force Material Command, Robins Air Force Base, Georgia, is the contracting activity (FA8552-19-C-0002). The Boeing Co., St. Louis, Missouri, has been awarded a $40,974,754 firm-fixed-price modification (P00026) to previously awarded contract FA8621-16-C-6397 for F-15C and F-15E Mission Training Center Services contractor-furnished, high-fidelity simulation equipment to provide simulation capability to train pilots and weapons system operators. This modification provides four additional pilot/weapon systems officer crew stations devices and their associated equipment in support of aircrew training requirements. Work will be performed at Nellis Air Force Base, Nevada, and is expected to be complete by Feb. 15, 2021. This modification brings the total cumulative face value of the contract to $229,428,492. Fiscal 2019 operations and maintenance funds in the full amount are being obligated at the time of award. Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, Ohio, is the contracting activity. BAE Systems Technology Solutions & Services Inc., Rockville, Maryland, has been awarded a $7,758,301 delivery order (FA2521-19-F0139) against previously awarded contract FA2521-16-D-0010 for serviceable components and subsystems for Instrumentation Tracking Systems (ITS). This delivery order provides for a 5.5 KVDC transmitter power upgrade for AN/FPS-8a5 Phased Array Radar. Work will be performed at Eglin Air Force Base, Florida, and is expected to be complete by March 17, 2021. Fiscal 2019 operations and maintenance funds in the full amount are being obligated at the time of award. The 45th Contracting Squadron, Patrick Air Force Base, Florida, is the contracting activity. (Awarded May 16, 2019) ARMY Caelum Research Corp.,* Rockville, Maryland, was awarded a $22,639,066 hybrid (cost-no-fee and firm-fixed-price) contract for data and information management support services. Twenty five bids were solicited with three bids received. Work will be performed in Huntsville, Alabama, with an estimated completion date of Nov. 30, 2024. Fiscal 2019 operations and maintenance, Army funds in the amount of $3,694,966 were obligated at the time of the award. U.S. Army Contracting Command, Redstone Arsenal, Alabama, is the contracting activity (W31P4Q-19-F-0324). Sentar Inc.,* Huntsville, Alabama, was awarded a $10,426,896 hybrid (cost-no-fee and firm-fixed-price) contract for cyber security and information management support services. Twenty five bids were solicited with six bids received. Work will be performed in Huntsville, Alabama, with an estimated completion date of Nov. 30, 2024. Fiscal 2019 operations and maintenance, Army and Army working capital funds in the amount of $1,683,982 were obligated at the time of the award. U.S. Army Contracting Command, Redstone Arsenal, Alabama, is the contracting activity (W31P4Q-19-F-0323). CAT Island Conservancy LLC,* Baton Rouge, Louisiana, was awarded an $8,121,750 firm-fixed-price contract to purchase Bottomland Hardwood Impacts mitigation bank credits/acres from approved mitigation bank(s) in the Lake Pontchartrain and/or Mississippi River basins. Bids were solicited via the internet with four received. Work will be performed in Baton Rouge, Louisiana, with an estimated completion date of June 3, 2019. Fiscal 2019 Army Corps of Engineers civil construction funds in the amount of $8,121,750 were obligated at the time of the award. U.S. Army Corps of Engineers, New Orleans, Louisiana, is the contracting activity (W912P8-19-C-0037). DEFENSE ADVANCED RESEARCH PROJECTS AGENCY Galois Inc., Portland, Oregon, was awarded a $16,479,920 cost-plus-fixed-fee contract for a research project under the Safe Documents (SafeDocs) program. The SafeDocs program aims to develop novel verified programming methodologies for building high assurance parsers for extant electronic data formats, and novel methodologies for comprehending, simplifying, and reducing these formats to their safe, unambiguous, verification-friendly subsets (safe sub-setting). SafeDocs will address the ambiguity and complexity obstacles to the application of verified programming posed by extant electronic data formats. Work will be performed in Portland, Oregon, with an expected completion date of May 2023. Fiscal 2019 research, development, test and evaluation funding in the amount of $2,326,000 are being obligated at time of award. This contract was a competitive acquisition under an open broad agency announcement and 23 offers were received. The Defense Advanced Research Projects Agency, Arlington, Virginia, is the contracting activity (HR001119C0073). *Small business https://dod.defense.gov/News/Contracts/Contract-View/Article/1855659/source/GovDelivery/