October 29, 2020 | International, Land
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.”
September 14, 2023 | International, C4ISR, Security
The program should be the first to acknowledge that both software and data production need to be core military competencies, the authors argue.
August 10, 2020 | International, Aerospace
Nathan Strout SpaceX and United Launch Alliance have won massive five-year National Security Space Launch contracts from the U.S. Space Force and National Reconnaissance Office, the Space and Missile Systems Center announced Aug. 7. The contracts will support more than 30 heavy lift launches planned between fiscal 2022 through 2027, with task orders to be made from fiscal 2020 through 2024. 60 percent of launch services orders will go to ULA, with SpaceX taking up the remaining 40 percent. The two firm-fixed-price, indefinite delivery requirement contracts included funding for the first year of launches: $337 for ULA and $316 for SpaceX. “This is a groundbreaking day, culminating years of strategic planning and effort by the Department of the Air Force, NRO and our launch service industry partners,” said William Roper, assistant secretary of the U.S. Air Force for Acquisition, Technology and Logistics, in a statement. “Maintaining a competitive launch market, servicing both government and commercial customers, is how we encourage continued innovation on assured access to space. Today's awards mark a new epoch of space launch that will finally transition the Department off Russian RD-180 engines.” Following a Congressional mandate, the Department of Defense began the NSSL competition in 2019 to end U.S. reliance on the Russian propulsion systems used for the Atlas V and Delta IV rockets. A four-way competition ensued, with Blue Origin, Northrop Grumman and ULA designing new rockets for the military and SpaceX submitting their already certified Falcon 9 and Falcon Heavy rockets. The Space and Missile Systems Center claimed that a report issued in April by think tank RAND supported its decision to award contracts to only two launch providers, arguing that the market could only support two. “This landmark award begins the dawn of a new decade in U.S. launch innovation, while promoting competition, maintaining a healthy industrial base, and reinforcing our global competitive advantage,” stated Lt. Gen. John Thompson, commander of SMC and program executive officer for space. “This acquisition will maintain our unprecedented mission success record, transition National Security Space payloads to new launch vehicles, assure access for current and future space architectures and cultivate innovative mission assurance practices.” With the announcement, SMC announced the first three missions to be assigned under the new contracts: USSF-51 and USSF-106 for ULA, and USSF-67 for SpaceX. All three will take place in fiscal 2022. https://www.c4isrnet.com/battlefield-tech/space/2020/08/07/spacex-and-ula-win-massive-national-security-launch-contracts
September 21, 2023 | International, Land
The Army will choose a single robotic vehicle from the four companies selected to build prototypes over the next year.