Back to news

October 29, 2020 | International, Land

Boeing has another overrun on the KC-46, but its CEO says there’s reason for hope

WASHINGTON — Boeing reported another $67 million charge on the KC-46 tanker program in third-quarter earnings disclosed Oct. 28, capping off a difficult quarter defined by continued hardships on its commercial side.

The increase in KC-46 costs was “due to continued COVID-19 disruptions and productivity inefficiencies,” Boeing's chief financial officer, Greg Smith, told investors during an earnings call.

However, Boeing CEO Dave Calhoun expressed confidence that the program would turn the corner in 2021 and become profitable for the company.

“The tanker has been a drag on us for three or four years in every way you can think of with respect to investors,” he said. “But we are continuing to clear the hurdle with our customers with respect to its performance in their fleet and their need for that tanker.

"That whole relationship, I believe, will begin to transition next year, and opposed to being a drag on our franchise — which it's been — I believe it will become a strength in our franchise.”

Previous charges on the KC-46 program amount to about $4.7 billion — almost equal to the $4.9 billion sum of the company's firm fixed-price contract with the U.S. Air Force, which it signed in 2011.

In July, a $151 million charge was attributed to the decline in commercial plane production driven by the COVID-19 pandemic. That slowdown has made it more expensive to produce commercial derivative planes like the KC-46, which is based on the Boeing 767 and made on the same production line in Everett, Washington.

Overall, defense revenues slightly decreased to $6.8 billion “primarily due to derivative aircraft award timing,” the company said in a news release. But that impact paled in comparison to Boeing's commercial business, where revenues dropped from $8.2 billion in 2019 to $3.6 billion in 2020.

As a result of those continued difficulties, the company plans to lay off an additional 7,000 workers by the end of 2021, Calhoun announced. At that point, Boeing's workforce will have been cut by almost 20 percent, down from 161,000 earlier this year to about 130,000 employees.

Smith characterized 2020 has a “year of transition” for defense programs like the MQ-25, T-7 trainer and the Air Force One replacement, which are in development. Once those programs move into production, Boeing expects to see “modest growth,” he said.

But Calhoun added that global defense spending is unlikely to greatly increase in the coming years, meaning that growth in Boeing's defense portfolio will be limited.

“In fact, we believe there will be pressure on defense spending as a result of all the COVID-related spending that of course governments around the world have been experiencing,” he said. “I don't think we're looking at that world through rose-colored glasses. I expect real pressure on that market.”

https://www.defensenews.com/industry/2020/10/28/boeing-has-another-overrun-on-the-kc-46-but-its-ceo-says-theres-some-reason-for-hope/

On the same subject

  • Les français Naval Group et ECA Robotics fourniront 12 chasseurs de mines à la Belgique et aux Pays-Bas

    March 20, 2019 | International, Naval

    Les français Naval Group et ECA Robotics fourniront 12 chasseurs de mines à la Belgique et aux Pays-Bas

    PAR LAURENT LAGNEAU Après avoir, dans la foulée de l'accord de partenariat stratégique conclu entre Paris et Canberra, signé le contrat de design pour les 12 futurs sous-marins Shorfin Barracuda destinés à la Royal Australian Navy, le constructeur naval français Naval Group, associé ECA Robotics, vient de remporter l'important marché portant sur le renouvellement des capacités de lutte anti-mines des forces navales belges et néerlandaises. Lancé en 2016 sous la responsabilité de la Belgique, ce marché, pour lequel une enveloppe de 2 milliards d'euros était prévue, vise à remplacer les chasseurs de mines de type Tripartite [CMT, conçus à Lorient] qui, en service depuis plus de 30 ans au sein des forces navales belges et néerlandaises, arriveront en fin de vie en 2023. Concrètement, le consortium emmené par Naval Group et ECA Robotics aura à livrer 12 chasseurs de mines à la Belgique et aux Pays-Bas mais surtout à imaginer ce que sera la guerre des mines de demain. « La future capacité utilisera des systèmes non habités en surface, au-dessus du niveau de l'eau et sous l'eau afin de détecter puis neutraliser des mines. Gr'ce à cette nouvelle méthode de travail, le vaisseau-mère et son personnel pourront rester hors du champ de mines car seuls les drones y seront actifs », a ainsi résumé le ministère belge de la Défense. Deux autres concurrents étaient en lice pour ce marché, dont le néerlandais Damen, associé à l'allemand Atlas Elektronik et à Imtech België, ainsi que le français Thales [actionnaire de Naval Group à hauteur de 35%, ndlr] allié aux chantiers navals de Saint-Nazaire et à Socarenam. Selon la presse d'outre-Quiévrain, le tandem Naval Group et ECA Robotics s'est imposé en faisant l'offre la moins disante à 1,756 milliad d'euros tout en assurant qu'il y aurait des retombées pour les industriels belges et néerlandais. Ainsi, la production d'une cinquantaine de robots sous-marins devrait se faire à Zeebruges. Quoi qu'il en soit, en obtenant ce marché visant à équiper des forces navales qui passent pour être parmi les plus performantes dans le domaine de la lutte anti-mines, Naval Group et ECA Robotics ont fait un coup de maître. En outre, dans le cadre de l'Otan, et avec 11 autres alliés, la Belgique et les Pays-Bas ont signé une lettre d'intention en vue de coopérer à la création de systèmes maritimes sans pilote, notamment en vue de réduire les coûts en réalisant des économies d'échelle. Et sur ce point, les deux industriels français sont sans doute désormais bien placés pour obtenir d'autres contrats à l'avenir. « Les mines marines sont des armes relativement peu coûteuses et disponibles. Elles peuvent aisément empêcher l'accès aux ports et aux voies navigables. Un incident survenu sur l'Escaut ou dans la mer du Nord peut représenter une perte économique quotidienne de cinquante millions d'euros. Garantir la sécurité des voies navigables et des ports est donc crucial pour notre économie. Chaque semaine, nos navires sont engagés. Ils participent à des missions internationales », a par ailleurs fait valoir le ministère belge de la Défense, qui estime que ce contrat renforcera la position de la Belgique « au sein de l'Otan en tant qu'expert et pionnier dans le domaine ». http://www.opex360.com/2019/03/16/les-francais-naval-group-et-eca-robotics-fourniront-12-chasseurs-de-mines-a-la-belgique-et-aux-pays-bas/

  • U.S. Hypersonic Defense Plan Emerges, But Not Cash

    June 22, 2020 | International, Aerospace, C4ISR

    U.S. Hypersonic Defense Plan Emerges, But Not Cash

    Steve Trimble A U.S. hypersonic defense system has evolved from wide-open concept studies two years ago into a densely layered architecture populated by requirements for a new generation of space-based sensors and ground-based interceptors. Over the next two years, the first elements of the Defense Department's newly defined hypersonic defense architecture could advance into operational reality if all the pieces can overcome various challenges, including the Pentagon's so far ambiguous commitment to long-term funding. Space-based hypersonic tracking is possible in 2023 New sea-based interceptor will possibly be ready by mid-2020s Pentagon seeks Congressional add-ons to finance plan The Space Development Agency (SDA), with assistance from the Missile Defense Agency (MDA) and the Defense Advanced Research Projects Agency (DARPA), next year will start launching satellites into orbit with new forms of tracking technology optimized to perform the challenging task of remotely targeting hypersonic missiles as they maneuver in the atmosphere hundreds of miles below. At the same time, the MDA and DARPA will soon begin demonstrating a new class of kinetic and nonkinetic interceptor technologies. In addition to solving the guidance and thermal challenges posed by hypersonic flight, this new class of missile defense weapons must be guidable by satellites potentially perched far over the horizon, not by sensors integrally linked on the ground to their launching systems. Pentagon officials began conceiving a hypersonic defense architecture a year after launching multiple offensive weapons programs in 2017, seeking to close gaps in the ballistic defense system that missiles now fielded by adversaries are designed to exploit. With the ability to maneuver hundreds of miles off a ballistic trajectory, hypersonic glide vehicles (HGVs) and cruise missiles are designed to evade the MDA's network of stationary ground-based and slow-moving sea-based radars dotted around the globe. By gliding or powering through the atmosphere against the warm background of Earth, the same missiles appear 10-15 times less luminous during the midcourse phase than the boost-phase, exoatmospheric objects that the MDA designed the Space-Based Infrared System (SBIRS) satellites to detect, according to Michael Griffin, the undersecretary of defense for research and engineering. Closing those gaps will require serious investment. Despite plans to infuse more than $10 billion to field at least three different rocket-boosted HGVs by 2025 as offensive weapons, the Pentagon's financial commitment to field a defensive capability is not as clear. The MDA, for example, submitted a fiscal 2020 budget request in February 2019 that included around $157 million in hypersonic defense. A month later, the agency submitted an unfunded-priorities list to Congress, asking for another $720 million for hypersonic interceptors and tracking sensors. Congress met the MDA more than halfway, adding $400 million to the final appropriations bill. A similar shortfall then appeared in the MDA's fiscal 2021 budget request. The agency included $207 million for hypersonic defense but asked Congress to chip in another $224 million on top of the budgeted amount, according to a March report by the Center for Strategic and International Studies' (CSIS) Missile Defense Project. Moreover, the Defense Department's long-range forecast for hypersonic defense spending shows an ambiguous commitment at best. The MDA plans to launch a competition to select a Regional Glide-Phase Weapon System (RGPWS) in fiscal 2021 but only if Congress approves the additional $224 million identified in the unfunded priorities list. At the same time, the new SDA plans to start demonstrating MDA's Hypersonic Ballistic Tracking and Surveillance System (HBTSS) alongside the SDA's own tracking layer in orbit. But the unclassified version of the Future Years Defense Program, which details the Defense Department's five-year spending forecast, shows declining support for hypersonic defense after next year. If Congress approves the extra $224 million for MDA, hypersonic defense spending would peak at around $450 million next year, then average about $112 million annually from fiscal 2022 to 2025, according to the CSIS data. The implication seems clear: Despite the MDA's public commitment to a hypersonic defense system, the agency prefers to finance the development mainly by annual congressional add-ons. Although the MDA's long-term funding plan for hypersonic defense is limited, the potential threats are no longer speculative. In December, the Russian government announced it had achieved operational status for the Avangard, a nuclear-tipped HGV launched by a modernized SS-19 intercontinental ballistic missile. Two months earlier, Gen. Paul Selva, then-vice chairman of the Joint Chiefs of Staff, explained the implications of an adversary with a nuclear-armed HGV: Imagine if NATO attempted to blunt a move by Moscow to occupy a Baltic state, and Russian strategic forces responded by threatening to launch an Avangard missile. The now-retired general warned that a single Avangard could arc over the Arctic Ocean, and as it reached the northern tip of Hudson Bay, Canada, could change course. It could then veer to target the U.S. East Coast or strike the West Coast, Selva says. U.S. forces currently have no ability to deter or defend against such a capability. To solve that problem, a new space-based tracking system is needed. The Pentagon's existing satellites are either looking for a more luminous signal than that of an HGV or a hypersonic cruise missile or are using a very narrow field-of-view sensor to minimize background clutter, says SDA Director Derek Tournear, who spoke with Aviation Week during a June 4 webinar. The first attempt to solve that problem is scheduled for launch in fiscal 2024. Forty satellites in SDA's Tranche 1 constellation in low Earth orbit carry sensor payloads for tracking hypersonic missiles. Unlike the SBIRS or other space-based capabilities, the sensors will neither have a narrow field of view nor be optimized for tracking only during the boost or exoatmospheric phases of a missile's trajectory. Instead, the spacecraft in Tranche 1 will carry a wide-field-of-view infrared sensor. “However, the jury is still out on whether [the sensors] will be able to form a track that is high enough quality to actually give you that fire control solution so that you can fire [interceptors] on [a] remote [track],” Tournear says. The backup to the SDA sensor will be demonstrated under MDA's HBTSS program. The MDA is developing what Tournear calls a medium-field-of-view system, which falls between the narrow-field-of-view format of existing satellites and the SDA's wide-field-of-view design for Tranche 1. Ideally, the SDA's wide-field-of-view sensors will detect an HGV or a cruise missile and pass the data in orbit to the HBTSS sensors, which will then develop a target-quality track. That data will be passed down to interceptor batteries on the ground. Modified interceptors, such as Terminal High-Altitude Area Defense, will augment new kinetic and non-kinetic options to shoot down hypersonic missiles. Credit: Missile Defense Agency Within a few years, the SDA will find out how the concept works. By the end of 2022, eight Tranche 0 satellites equipped with the SDA's wide-field-of-view sensors should be in low Earth orbit. A year later, the MDA plans to launch two satellites into low Earth orbit with medium-field-of-view sensors. The Tranche 0 constellation—aided by 20 communications-relay and data-processing “transport” satellites—will provide a limited operational capability and validate that the sensors work as designed. The next step comes in 2024, when the SDA plans to launch the 40 satellites in the Tranche 1 constellation. “We would have, in essence, regional persistence of [infrared satellites] over any area of the globe that we choose,” Tournear says. There is a catch, however. The launch of the Tranche 1 satellites in 2024 fall within the five-year spending plan but so far remain unfunded. Shortly after the scheduled Tranche 1 layer is activated, the MDA plans to field RGPWS, the new interceptor optimized for HGVs. If Congress adds the funding, RGPWS could be fielded as early as the “mid-2020s” with the Navy's Mk. 41 vertical launch systems on ships and submarines, followed later by air- and land-launched versions. The design requirements for RGPWS are classified, but it's possible the interceptor may benefit from an ongoing DARPA program. Glide Breaker, which includes Aerojet Rocketdyne as a supplier, seeks to demonstrate a “critical enabling technology” for a hypersonic defense missile. The MDA also plans to demonstrate an “extreme power” microwave weapon against “very long-range” missile threats within two years. At the same time, the MDA is adapting existing point defenses against atmospheric threats. Lockheed Martin is studying improved versions of the Terminal High-Altitude Area Defense system, called “Dart,” and of the Patriot, called “Valkyrie.” In addition to the extreme power microwave, Raytheon also is studying a new variant of the SM-3 called Hawk. Editor's note: The article has been updated to correctly identify the names of the hypersonic defense concepts under study for THAAD and Patriot. https://aviationweek.com/defense-space/missile-defense-weapons/us-hypersonic-defense-plan-emerges-not-cash

  • See images from the first day of the Singapore Airshow

    February 16, 2022 | International, Aerospace

    See images from the first day of the Singapore Airshow

    '€œThe show might be smaller, and the pandemic may have mitigated the number of exhibitors, but it doesn't mean that defense procurement has been slowing down.'€

All news