August 14, 2024 | International, Aerospace
Rheinmetall acquires manufacturing company Loc for $950M
Rheinmetall hopes the acquisition provides a new competitive advantage in Army vehicle competitions potentially valued over $60 billion.
October 21, 2018 | International, Aerospace, Naval, Land, C4ISR, Security
CEO Q&A: L3’s Chris Kubasik and Harris’s Bill Brown
BY MARCUS WEISGERBER
Soon after the companies announced plans to form the world's 7th-largest defense firm, the CEOs rang up for a joint interview.
On Sunday, just after L3 Technologies and Harris Corp. announced their planned merger next year, I chatted with CEOs Chris Kubasik and Bill Brown about their plans to form L3 Harris Technologies, which would be the world's 7th-largest defense firm. Here are some excerpts.
Q. How did this come together?
Brown: Chris and I have known each other for a number of years here, and a lot of it started more socially, not from a business perspective. We work in the same space as complimentary businesses, complementary portfolios. Same [main] customer. You know we realized, given where we stack up in the defence hierarchy, this would be a great potential combination. We've been discussing it through the balance of this calendar year. [It] really picked up steam in the summer and were able to bring it forward here towards middle October.
Q. Why a merger rather than an acquisition by one partner?
Kubasik: Both companies are quite strong, and we're both on an upswing, and we looked at all the different stakeholders from the customers, the shareholders and the employees. And in our relative size and market value, a merger vehicle seems to be the absolute right way to go here. True partnership, as you've probably seen. 50/50 board. Bill and I have our leadership laid out clearly. It's absolutely the right way to do this. We're quite proud that we're able to pull it off. And I think it's the best way to serve all the stakeholders.
Q. Bill is going to be CEO until a transition to Chris in a couple of years. How will that work? And what happens to L3's New York office if the headquarters moves to Florida?
Brown: The combination in bringing these two great companies together is going to take a lot of work. So Chris and I will partner on this, in leading the company [and] clearly doing a lot of the integration. We're going to chair the integration committee together. I'll have responsibility for the enterprise functions, and Chris will keep an eye on the ball in what we do operationally in the business segments making sure that through to the integration we don't miss a beat in our growth agenda, meeting expectations of customers, delivering on programs. It's going to be a shared partnership in bringing the companies together.
Kubasik: On a combined basis, we have several thousand employees in the state of New York, a lot in Rochester, of course Long Island and the surrounding areas. We got to do to what we believe is best for the business. When you look at the Space Coast of Florida, the 7,000 or so employees and infrastructure in the Melbourne area, it's an easy decision. We'll be transitioning from the headquarters from New York and taking the best of the best and moving to Florida. At some point the Manhattan office will either be significantly scaled down or ultimately closed.
Q. Will the combined company divest or combine overlapping sectors?
Bill Brown: Very high and complimentary portfolios. So we see very, very, very little overlap.
Q. L3 has been on an acquisition spree in recent years. Should we expect more, perhaps in the maritime sphere?
Kubasik: Job one is going to be the integration for the first couple years, so there will be very, very few, if any, acquisitions the first couple of years. They would have to be a once-in-a-lifetime opportunity. We're going to focus first and foremost on integrating this company. Once we get this integrated, which is a three-year program, we'll update and modify the strategy as appropriate.
Correction: An earlier version of this article misstated the proposed merged company's rank by revenue among global defense firms.
This Q&A is part of the weekly Global Business Brief newsletter by Marcus Weisgerber. Find the rest of this week's issue here,and subscribe to get it in your inbox, here.
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October 3, 2018 | International, Aerospace
Mattis says US-France in talks about loosening export limits on cruise missile
By: Pierre Tran PARIS – U.S. defense officials are in detailed talks with French counterparts on a request for the sale of American components built into French cruise missiles, U.S. Defense Secretary Jim Mattis said. Asked by a French journalist about Washington blocking the sale of the Scalp long-range weapon to Egypt and Qatar, Mattis said American and French staff were meeting on that very issue even as a press conference was being held. “We discussed this,” he said. “We also have our staffs meeting. We have an invitation out to France to answer two final questions. The meetings are going on as we speak.” Mattis, on his first visit to Paris as defense secretary, was speaking at a joint press conference with his French counterpart, Armed Forces Minister Florence Parly, held at Brienne House. The two issues to be resolved target “certain technologies” that the United States only shares with its closest allies, including France, and whether that technology can be further transferred, and how France can protect that technology, he said. “Right now we don't have a final answer but it is all going in the right direction,” he said. “And it was a very fruitful discussion today. Our staffs are working this forward right now.” The conundrum stems from the French sale to Egypt and Qatar of Scalp cruise missiles to arm Dassault Rafale fighter jets. The weapons include U.S. parts, leading Washington to evoke the International Traffic in Arms Regulations regime. Parly, meanwhile, thanked Mattis, for help in gaining U.S. authorization for arming French Reaper drones, cleared for fitting by the end of the year. U.S. President Donald Trump plans to come to Paris to mark the Nov. 11 Armistice Day, she said. That date is highly significant for France, marking the end of World War I, in which millions of troops died in the trenches. Mattis said he was not concerned about a drive by France and Germany to build a stronger European defense, as there were some issues which were “of interest only to Europeans.” As long as the European drive would not duplicate NATO or compete for alliance forces, “we see this in a positive direction,” he said. Mattis earlier met French President Emmanuel Macron and would go on to Brussels for a NATO ministerial meeting. https://www.defensenews.com/global/europe/2018/10/02/mattis-offers-easing-of-us-export-limits-on-french-cruise-missile
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July 13, 2020 | International, Land
As Defender 2020 drill winds down, US Army plans for 2021 edition
By: Aaron Mehta WASHINGTON — As the last portions of the altered Defender 2020 exercise kick into gear, the U.S. Army is beginning to plan its 2021 edition, a top general said Thursday. Speaking at a Defense News virtual panel on trans-Atlantic alliances Brig. Gen. Sean Bernabe, deputy commander of U.S. Army Europe, expressed confidence that Defender 2021 will be able to happen despite the ongoing coronavirus pandemic. “We've been continuing to look forward now that we've gained some confidence that we can train large-scale, collective [military exercises] in this environment,” Bernabe said. “We've been looking further and further forward. As we speak, we're planning exercise Defender Europe 2021, to take place in the late spring, early summer of 2021, focused in the Black Sea and Balkans.” Planning “is underway, again informed by our experiences between March and June. Having validated that we can do it, we're confident that we'll figure it out in partnership with our allies,” he added. “I feel confident that we will [be able to] maintain readiness and interoperability across Europe, despite COVID, regardless of how long it may be a part of our operating environment.” Bernabe predicted the 2021 exercise will likely be smaller than 2020′s planned version, which should be no surprise. Defender 2020 was billed as the third-largest military exercise in Europe since the end of the Cold War, a major test of the United States' ability to move stateside forces to locations across Europe, including Poland, the Baltics, some Nordic nations and Germany. A total of 20,000 soldiers were expected to participate. However, the COVID-19 outbreak forced the Army to hit pause on the exercise in March just as it was starting. Several smaller, related drills were canceled outright, and U.S. forces were sent back home. A smaller associated exercise picked up again in June. Bernabe's comments came just hours before the Army announced that a combined arms battalion would deploy to Europe between July 14 and Aug. 22 as part of the “final phase” of the modified Defender 2020 exercise. The deployment will involve 550 soldiers from the 2nd Battalion, 12th Cavalry Regiment, 1st Armored Brigade Combat Team, 1st Cavalry Division out of Fort Hood, Texas, with the 1st Cavalry Division Headquarters in Poznan, Poland, serving as mission command. Approximately 55 Abrams tanks and Bradley Infantry Fighting Vehicles will take part. The tanks will be equipped with the Trophy active protection system so the Army can “assess and experience the dynamics of moving and installing the system in a field environment.” At the end of June, the European Union put citizens of the United States on a list of countries barred from traveling to EU member states due to the continued spread of COVID-19. However, military movements are exempt from that rule, and Bernabe believes the Army has a good plan in place for the intake of forces into Europe. “To be good neighbors, we are using some very, I'd say, aggressive approaches to make sure that we are screening and testing for COVID as personnel arrive,” he said. “Make sure that we're putting in the mandatory 14 days' [quarantine], making sure that we continue screening, we wear masks, we practice physical distancing to make sure that we're not bringing infection into Europe while we focus on maintaining the military readiness. “So thankfully we've worked with our host nations to continue to flow personnel into and out of Europe.” https://www.defensenews.com/news/your-army/2020/07/10/as-defender-2020-winds-down-army-planning-for-2021-underway/