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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

  • Navy Refining How Data Analytics Could Predict Ship Maintenance Needs

    June 25, 2019 | International, Naval

    Navy Refining How Data Analytics Could Predict Ship Maintenance Needs

    By: Ben Werner WASHINGTON, D.C. – Extending the lifespans of existing ships using data-driven maintenance efforts is the best strategy for achieving a 355- ship navy, said the Naval Sea Systems Command chief engineer. The key to maintaining ships and enabling the Navy to extend their lifespans is data analytics, Rear Adm. Lorin Selby, the chief engineer and deputy commander of ship design, integration and naval engineering at NAVSEA, said Thursday at the American Society of Naval Engineers' annual Technology, Systems & Ship symposium. “I have ships with a number of sensors on them, measuring things like reduction gears, showering components, turbines, generators, water jets, air conditioning plants, high packs, a number of components, and we're actually pulling data off those ships, in data acquisition systems,” Selby said. At the Naval Surface Warfare Center Philadelphia Division, Selby's team is analyzing data gleaned from smaller ship component operations to determine how often such components need servicing, oil changes, filter changes, other maintenance actions and replacement. The process is called condition-based maintenance plus (CBM+), and Selby wants CBM to drive improvements in maintaining ships. “That's one of the things we're doing to get after utilizing the technology we have today to operate the ships we have today more efficiently and more effectively,” Selby said. The Navy has dabbled with CBM for years. A 2008 Department of Defense Conditions Based Maintenance Plus guidebook mentions NAVSEA efforts. However, two years ago at the ASNE TSS symposium, NAVSEA Commander Vice Adm. Tom Moore told USNI News that the Navy's use of CBM had perhaps gone too far and was disrupting the shipyards' ability to plan for large maintenance jobs properly. During previous attempts at incorporating CBM, there was a thought that, if major efforts like refurbishing tanks were only done when needed, rather than on a predetermined timetable, the Navy could avoid spending time and money on work ahead of need. However, that also meant that shipyards wouldn't have a clear work package before a ship showed up at the pier, adding uncertainty and, ultimately, more time and cost into the maintenance availability. This time around, Selby sees condition-based maintenance as a way to address smaller maintenance items in such a way that data analysis points a ship crew to components that are experiencing minor performance issues or otherwise showing signs they are about to fail before the failure actually occurs. This summer, a pilot program using enterprise remote monitoring will occur on an Arleigh Burke-class destroyer, he said. Data collected will be sent for analysis, and operators will learn how to use the data to understand how their systems are performing and if maintenance or repairs are needed. Selby wants to have a system of apps the Navy can use to collect data from ship components, analyze the data, share it with operators and schedule work. He wants to hold a competition for app developers to create apps the Navy will test for use in the fleet. Describing his vision, Selby said, “the systems that will be monitoring, say the turbine; it will tell the operators when a work procedure has to be performed and it will also then tap into the work package side of the house and generate a work package that gets sent to the ship, to the work center, to do the work. And if there's a part involved, it will be able to pull a part from the supply system.” Testing is occurring now, but Selby concedes there are some obstacles the Navy has to overcome before large-scale deployment. The Navy is struggling with how to transmit data securely, something Selby discussed during an earlier session at the symposium. The data also has to be secured. “The performance of any given asset is something we want to hold close. So I think what you have to do is you have to architect this from kind of the get-go with that kind of security mindset in mind,” Selby said. “You can harvest that data and you could potentially discover vulnerabilities, so you have to protect that. That's part of my project: as I do this, we're bringing that security aspect into the program.” Extending the lifespan of the Navy's current fleet is essential if the Navy is going to grow to 355-ships, Moore said during his keynote address after Selby spoke Thursday. The Navy, military planners at the Pentagon, the White House and lawmakers are all anxious to reach 355 ships as soon as possible because Moore said current forces are stretched too thin. “We in the Navy, we don't have enough forces to go everywhere we need to go, and we have a pretty fragile mix of ships, so that when we miss an availability coming out on time, or we don't build something to the schedule they're supposed to build to, there are real-world consequences to that,” Moore said. The true determining factor of whether a ship's lifespan can be extended, Moore said, is the platform's flexibility. The Arleigh Burke-class is the Navy's workhorse today because, during the past 30 years, the Navy has successfully updated its operating systems. Moving forward, Moore said extending the life of the ships in this class means back-fitting many of the older Flight I and Flight II with a scaled-back version of the AN/SPY-6(V) Air and Missile Defense Radar (AMDR) to keep these ships relevant to current and future mission needs. “If you're willing to do the maintenance on the ships, from a hull and mechanical perspective, you absolutely can keep them longer,” Moore said. “The issue is really not can you keep them 50 years; the issue is can they maintain combat relevance. If they can maintain combat relevance, we know we can keep them longer.” https://news.usni.org/2019/06/24/navy-refining-how-data-analytics-could-predict-ship-maintenance-needs

  • Contract Awards by US Department of Defense - January 08, 2020

    January 8, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

    Contract Awards by US Department of Defense - January 08, 2020

    NAVY Ensign-Bickford Aerospace & Defense, Simsbury, Connecticut, is awarded a $28,323,000 firm-fixed-price, indefinite-delivery/indefinite-quantity contract with a five-year ordering period and five one-year options for the MK 150 MOD 0 4.0 second Delay Detonator, and the MK 164 MOD 0 Non Electric Dual Detonator. The MN50 is a 4.0 second delay detonator with 7' of pyrotechnic lead with one non-electric delay detonator on one end and an inline initiator on the other end. The MP29 is a non-electric dual detonator with 40' of dual, no flash pyrotechnic lead with two non-electric detonators on one end and two inline initiators on the other end. They are used for demolition breaching, critical target destruction and obstacle clearing for U.S. Naval Special Warfare Command. Work will be performed in Graham, Kentucky, and is expected to be complete by January 2030. Fiscal 2019 procurement of ammunition, Navy and Marine Corps, funding in the amount of $305,486; and defense procurement funding in the amount of $149,971 will be obligated at the time of award and will not expire at the end of the current fiscal year. This contract was competitively procured via the Federal Business Opportunities website with one offer received. The Naval Surface Warfare Center, Crane Division, Crane, Indiana, is the contracting activity (N0016420DJR74). ARMY Dyncorp International LLC, Fort Worth, Texas, was awarded a $19,810,314 modification (P00022) to contract W58RGZ-19-C-0025 for aviation maintenance services. Work will be performed in Fort Campbell, Kentucky; Afghanistan and Iraq, with an estimated completion date of Nov. 30, 2020. Fiscal 2020 operations and maintenance, Army funds in the amount of $19,810,314 were obligated at the time of the award. U.S. Army Contracting Command, Redstone Arsenal, Alabama, is the contracting activity. https://www.defense.gov/Newsroom/Contracts/Contract/Article/2052047/source/GovDelivery/

  • The Army network plan to ‘compete everything’

    May 14, 2020 | International, C4ISR

    The Army network plan to ‘compete everything’

    Andrew Eversden The Army recently conducted a critical design review for technologies it plans to deploy for Capability Set '21, one of the first pieces of its battlefield network modernization. In the review, the Army tested various elements of Cap Set '21, such as tactical radios and satellite terminals. Now, the service is making a series of capability trade offs — assessing affordability, technical maturity and density across formation. For example, the Army is weighing trade-offs between how many of its two-channel Leader radios and more affordable single channel radios will ultimately end up in an infantry brigade. Col. Garth Winterle, project manager for tactical radios at the Army's Program Executive Officer for Command Control Communication - Tactical, and Lt. Col. Brandon Baer, program manager for helicopter and multi-mission radios (HAMMR), talked with C4ISRNET about the decisions made during the critical design review and what these choices mean for the next batch of equipment known as Capability Set '23. This transcript has been edited for clarity and brevity. C4ISRNET: What decisions were made during the critical design review (CDR)? COL. GARTH WINTERLE: We went from a 100 percent classified network, hard to get people security clearances, very expensive, NSA-certification required for everything as part of the network architecture, to 75 percent secure but [with an] unclassified architecture at battalion and below. That really adds a lot of flexibility — not only in the addition of affordable commercial technologies that really add capability rapidly because that shaves about 24 months off potential fielding timeline if you don't have to go to NSA — but it keeps a very strong encryption using some of the same algorithms you use for NSA certified radios. It's secure. It's not unsafe. While it's unclassified, it's still very well encrypted. It's just a different way of doing business. So it really opens the door for a lot of different things. Plus, it really improves the ability to share data with coalition and multinational partners, who are also operating at that security level. C4ISRNET: Can you explain the Terrestrial Transmission Line of Sight (TRILOS) radio and the capability trade off you made? WINTERLE: The quantities were adjusted in order to afford more flexible, more expedient and pretty much more affordable options at the brigade level and below. There's a system called TRILOS. Think of a big dish on a portable tower. If you can line it up with another big dish on a portable tower over pretty long distances, you can get very high data throughput very quickly ... It's purpose is to connect large command nodes together and enable them to share data much, much better. So one of the things we looked at as part of the CDR, and we experimented with, is a new smaller expeditionary version. I talked about a giant dish on a portable tower. We went to the company we worked with called Silvus. They have a smaller, little four antenna radio, it's about the size of your home WiFi router [and] does the same thing in slightly less bandwidth. It's not as capable, but it performs that same function. And it's much, much lighter, much easier to pack out and we're actually putting those under quadcopters, like a drone, that are tethered [so] they operate off a line. So you can raise that up in the air and hold that radio up in the air and get really good range to connect two of those radios together to share data. By trading out one system of those large dishes on the tower, we're able to buy a significant quantity of the smaller systems. TRILOS, those dishes on towers, still remain in the architecture. But just by reducing the quantity marginally, we're able to really add a much more expeditionary much, much lighter, easier to set up. And we can buy it in larger quantities to increase the quantity out in the architecture to increase that capability. C4ISRNET: Can you describe how the Army intends to procure some of the Integrated Tactical Network components? WINTERLE: The intent is to compete everything. Single channel radios are a prime example. We're getting ready to invite vendors that have conforming radios to an industry day to basically have a radio run off. [We want them to] provide us enough radios so we can get them integrated and start assessing them against each other and against the current offering from the vendor that actually went through the experiment. It's going to be a fully competitive action. It is important to note though that I can't just go out and buy a new radio and, boom, I can field it. There is an amount of time where we are going to have to procure a limited quantity of the systems that went through the experiment until I can get those other radios through enough lab-based experimentation and integration, so that I know they work on the network. So even though they might be very similar [to] what we experimented with, there will be a delay so I can actually start fielding those to operational units. But [our] intent is to start that as soon as possible as part of the procurement fielding next year — this competitive run off of single channel radios. Anywhere else where there was a stand-in capability where we know from market research that there's other vendors, we'll perform the same sort of competitive actions. C4ISRNET: What are some of the lessons learned from Capability Set '21 that can be applied to Capability Set '23? WINTERLE: We're going to have a design review every year. The year prior to the preliminary design review, which is the year we're in right now for Cap Set '23, focuses on small-scale experimentation and a kind of assessment of ‘what are those technologies that going to compete to be added to the architecture as part of the preliminary design review' in April of next year. So we picked April. We just did this CDR in April. So the preliminary design review for Cap Set '23 is next April. We've partnered with the network cross functional team to help conduct research and development funded activities of certain key technology that they want to see added to the architecture in Cap Set '23. C4ISRNET: How has the Army's capability set testing structure been suited for COVID-19? LT. COL. BRANDON BAER: Traditionally, we do a large operational type test, where our approach has been lab-based testing, [cyber]-based testing, and then doing what we're calling soldier touchpoints. They're smaller experiments, but we're doing more of them. It gives us an opportunity to capture data, soldier feedback at different points of time. We call it developmental operations or DevOps. We can go back and tweak the stuff, fix any problems, get it back out there and continue to collect feedback. But I think it's extremely important due to current conditions with COVID-19, and everything else. Because everything has kind of gone into a large pause. And if we would have had a large pause during operational tests, it could be six months or a year before we have another opportunity to do that, where when you're doing multiple events ... we're capturing data at different times and different soldier feedback, you're not reliant upon one event. As we move forward, I see continuous benefits through that. https://www.c4isrnet.com/battlefield-tech/c2-comms/2020/05/13/the-army-network-plan-to-compete-everything/

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