Contract Awards by US Department of Defense - June 12, 2020

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  August 23, 2018 | International, Aerospace

  Lockheed offers Japan majority of work in plan for new fighter jet

  YUKIO TAJIMA, Nikkei staff writer TOKYO -- Lockheed Martin has proposed that Japanese companies be responsible for more than half of the development and production of a next-generation fighter jet that Japan wants to introduce in 2030, Nikkei learned Wednesday. Lockheed is offering Japan an upgraded version of the existing F-22. The U.S. currently bans exports of the plane known as "the Raptor," which is considered the world's most powerful fighter, has stealth capabilities and is armed with eight air-to-air missiles. The U.S. aircraft manufacturer's decision to open the production to Japan comes out of the belief that there is little risk of technology leaks. The company also says providing the jet to Japan would contribute to the security of Asia. If the share of work pans out as proposed, it would strengthen Japan's defense industry and the Japan-U.S. alliance. Lockheed's proposal comes in response to concerns in Japan that American companies might monopolize the development and production of the upgraded warplane, leaving little room for Japanese partners' involvement. The company calls the plan a Japan-led framework. The next-generation fighter will replace Japan's F-2 jets, scheduled to retire around 2030. Tokyo initially looked for ways for Japan Inc. to completely develop a successor on its own, hoping to boost the domestic defense industry's orders, but the idea proved unfeasible due to technological and cost hurdles. The Japanese government sees Lockheed's proposal, which could deliver high performance at reduced development costs, as the most promising alternative. The next-generation fighter program is estimated to cost about 6 trillion yen ($54.2 billion), including development, acquisition and maintenance. Some voices are citing a need to update the F-22, which has been deployed since around 2000, and Lockheed's plan has the benefit of lowering upgrade costs shouldered by the U.S. Although Japan produced 60% of the jointly developed F-2, the U.S. handled engine development since Japan did not have the basic technology at the time. But Lockheed has expressed a willingness this time to shift development and production of new engines to major Japanese heavy machinery maker IHI in the future. If IHI's XF9-1 jet engine is adopted, Japanese companies could be responsible for more than 60% of the total work. In addition, the exports of high--margin military equipment for the project could ease the U.S. trade deficit with Japan. Mitsubishi Electric's fighter jet electronics system could be adopted, and Mitsubishi Heavy Industries will handle the development and production of wings, according to the plan. The aircraft's body, engines and the fighter system are to be made in the U.S., but Lockheed intends to use more Japanese-made components, incorporating them gradually until Japanese companies play a central role in development. To hasten development, Lockheed will send Japan F-22s that have not been deployed by the U.S. Air Force so that it can grasp its performance in advance. The updates will improve the plane's main wings and allow more fuel to be loaded, increasing the jet's range to about 2,200 km so it can be used to defend isolated islands and other missions. Although the F-22 has the most advanced stealth abilities in the world, it requires a special coating that is laborious to maintain. Maintenance will be simplified by using the same material as the F-35 stealth fighter, making it easier to perform drills and deploy for battle. One challenge is the cost. Lockheed estimates the price of the next-generation fighter will be far higher than the F-35's 15 billion yen-per-jet price tag. Lockheed estimates the price of a next-generation F-22 at about 24 billion yen if it is part of an order of 70 aircraft. Producing 140 of the jets could reduce the unit price to about 21 billion yen. There is also concern that including Japanese companies, which have not independently developed a fighter jet in recent years, could complicate production and ramp up costs. Lockheed initially estimated that the F-35A would cost about 10 billion yen per jet. Costs temporarily rose to 17 billion yen, however, when assembly was given to Japanese companies, a cause for concern this time. Some doubt that the U.S. will fully disclose core technology for the world's most powerful fighter jet. Although Lockheed plans to outfit the jet with several Japan-made weapons in an effort to include as much domestic technology as possible, the U.S. will initially be responsible for most of the work, with Japanese companies gradually joining the process later. It is unclear, however, when development will proceed to that second stage. "It is likely that the U.S. will not want to give up such core technologies as fighter systems and software," said Heigo Sato, a professor at Takushoku University. "The technological spillover to Japanese companies would be limited if they mostly receive subcontracting work." Although Mitsubishi Heavy assembles the F-35, which has begun deployment, it has been pointed out that having that job has hardly improved the company's technology knowledge. The U.S. Congress also turned down Japan's request for the F-22 to succeed the F-4 a decade ago because of hesitance about transferring military technology. Should technology transfers from the U.S. slow, it may hinder Japan's continued development of fighter jet technology. Japan must choose whether to develop its own jet, jointly develop with another country or update existing aircraft. Tokyo will make its decisions at the end of the year in its revised medium-term defense program. Boeing and Britain's BAE Systems have also made submitted proposals to upgrade existing planes. https://asia.nikkei.com/Politics/Lockheed-offers-Japan-majority-of-work-in-plan-for-new-fighter-jet

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  May 13, 2020 | International, Naval, C4ISR

  Failure to communicate: US Navy seeks faster data transfers amid Arctic ice

  Andrew Eversden WASHINGTON — Research in the Arctic Ocean is no small feat. The area can prove inaccessible at times, and sensors can fail to communicate data from under the ice or get crushed by slabs of ice. But with the Arctic getting warmer and ice melting at an accelerated rate, the U.S. Navy is preparing to operate in newly available waterways. To do that effectively, the service knows it will take intense research to create durable, innovative solutions that can withstand harsh conditions, while also relaying data to researchers. “If the Navy's thinking about having to run operations up there with submarines, surface vessels and aircraft, you really need to understand that operational environment,” Scott Harper, the Office of Naval Research's program manager for Arctic and global prediction, told Defense News in a May 4 interview. “Where is that sea ice and how quickly is it retreating? And what is it doing to the upper water column in the ocean? "To really understand all that, you need to have a lot of observations.” Navy and academic researchers are working together to improve the service's forecasting models in the Arctic. The Navy currently has research buoys, sensors and other technology floating in the water to track a variety of metrics: waves, atmospheric and water circulation, sea ice thickness and cover, speed at which the ice moves, and several other factors. All those metrics factor into Arctic forecasting. In order to improve its forecasting capabilities, the Navy needs to improve its numerical models, or complex equations used in predictions. But to do that, the service needs more up-to-date data. “These numerical models are kind of like balancing your checkbook,” Harper said. “You need to start with what your current checking account balances [to[ if you're going to predict what it's going to be at the end of the month. And so even if you had a perfect numerical model that you could use to make a forecast, if you don't know what the conditions are right now, you're not going to be able to forecast what the future state is going to be.” To do this, the Navy wants to more quickly collect data through an effort called the Arctic Mobile Observing System, or AMOS. The program aims to create near-real-time data transmission of the sea condition under the ice, and communicate that information to the Navy via satellite. “You have satellites that can look down at the surface of the Arctic Ocean and the sea ice conditions,” Harper said. “But what we don't have [is] the ability to look under the ice and understand what the ocean conditions are, and that's what we're really trying to enable with Arctic Mobile Observing System prototype.” The AMOS program has deployed gliders underneath the sea that are collecting and storing data about the oceanic conditions under the ice, and tracking the location of frozen water using acoustics. In a few months, Harper said, researchers will send an icebreaker to the Arctic and gather the data collected by the gliders. The Office of Naval Resarch, however, would like to bypass the multi-month delay involved in collected the data. To do so, the office plans to enable two-way communication so underwater sensors can communicate data via floating buoys in the ice that, in turn, communicate the data via satellites back to the Naval Oceanographic Office. The project is currently two years into the five-year project. According to the project website, it's slated to end in fiscal 2023 with the recovery and evaluation of the initial prototype in the late summer of 2023. Harper said the project's biggest success has been the navigation system that's currently working underneath the ocean surface. “The fact that we can put sensors out that will know where they are without having to come to the surface to get a GPS fix — because they can't come to the surface because there's sea ice there for nine months out of the year," he said. "That's a big win.” Another critical component to the real-time data collection are the buoys that ultimately must be able to survive the cruel nature of Arctic ice. The AMOS team has deployed prototypes of “ice-hardened” buoys that survived “multiple months” in the Arctic environment, Harper said, paving the way for a fully equipped communications buoy that can talk with underwater sensors. “You can go out there and you can put your sensors in the ice, but a lot of times they'll fail,” Harper said. “And they'll fail because they'll get crushed in the ice or tipped over or toppled by changing ice conditions. And so the ability to deploy a buoy that is robust enough to survive the sea ice is one of the technological hurdles to doing this.” https://www.c4isrnet.com/smr/frozen-pathways/2020/05/11/failure-to-communicate-us-navy-seeks-faster-data-transfers-amid-arctic-ice/

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  October 16, 2018 | International, Aerospace

  TransDigm to Acquire Esterline Technologies in $4 Billion All Cash Transaction

  CLEVELAND, OH and BELLEVUE, WA., October 10, 2018 /PRNewswire/GlobeNewswire -- TransDigm Group Incorporated (NYSE: TDG) and Esterline Technologies Corporation (NYSE:ESL) announced today that they have entered into a definitive agreement under which TransDigm will purchase all of the outstanding shares of common stock of Esterline for $122.50 per share in cash, which represents a premium of 38% to Esterline's closing price on October 9, 2018, or a total transaction value of approximately $4.0 billion including the assumption of debt. The transaction has been approved by the Boards of Directors of both companies. TransDigm expects the acquisition to be financed primarily through cash on hand and the incurrence of new term loans, and currently anticipates the acquisition to be modestly accretive to TransDigm's adjusted earnings per share within the first year of ownership. The acquisition of Esterline expands TransDigm's platform of proprietary and sole source content for the aerospace and defense industries, including significant aftermarket exposure. Headquartered in Bellevue, Washington, Esterline is an industry leader in specialized manufacturing for these sectors with anticipated fiscal year 2018 revenue of approximately $2.0 billion. The company consists of 28 business units organized across eight platforms to deliver specialty aerospace, defense and industrial products. The company employs over 12,500 employees in more than 50 operating locations throughout the world. Esterline has attractive platform positions in both the OEM and aftermarket and has substantial content on many important commercial aircraft variants, many regional and business jet aircraft and major defense platforms. “We are pleased to have reached agreement to acquire a collection of businesses that fit well with our focused and consistent strategy,” stated W. Nicholas Howley, TransDigm's Executive Chairman. “Esterline's core aerospace and defense business consists of primarily proprietary, sole source products with significant and growing aftermarket exposure. We view this as highly complementary to our existing business. We are confident that the combination of Esterline's leading positions and our proven track record of driving performance will enable us to deliver the private equity-like returns our investors have come to expect from this investment." Kevin Stein, TransDigm's President and Chief Executive Officer stated, “We are excited to acquire Esterline's wide range of complementary products and see a path to create significant value for TransDigm shareholders, customers and stakeholders. Upon completion of the transaction, Bob Henderson, TransDigm's current Vice-Chairman, will oversee the integration and operations of Esterline. Mr. Henderson has been a key member of TransDigm's management team for close to 25 years and has overseen the integration of numerous acquisitions during this period, including our recent acquisition of Kirkhill from Esterline.” “Our combination with TransDigm delivers a compelling value for our shareholders,” said Curtis Reusser, Chairman, President and Chief Executive Officer of Esterline. “I am pleased with the outcome of our thoughtful strategic review process, and we believe it is the best result for all Esterline stakeholders. I am very proud of the commitment and focus of our employees to serving the needs of our customers, and I am confident the combined companies will be well positioned to succeed in the global market we serve.” The acquisition will be financed through a combination of existing cash on hand of approximately $2 billion and the incurrence of new term loans. TransDigm has obtained commitments for the full amount of financing required for the transaction. Immediately upon closing, the combined company will maintain the financial flexibility to meet any anticipated operating, acquisition, and other opportunities that may arise though a combination of cash on hand, undrawn revolver, and under certain circumstances, additional availability under its credit agreement. The transaction is subject to customary closing conditions, including Esterline stockholder approval and the receipt of required regulatory approvals. The companies expect to complete the transaction in the second half of calendar 2019. Advisors Morgan Stanley & Co. LLC acted as financial advisor to TransDigm. Wachtell, Lipton, Rosen & Katz and Baker & Hostetler LLP acted as TransDigm's lead legal counsel. Goldman Sachs & Co. LLC acted as financial advisor to Esterline and Evercore Group L.L.C. served as advisor to Esterline's Board of Directors. Skadden, Arps, Slate, Meagher & Flom served as legal counsel to Esterline. Conference Call TransDigm will hold a conference call to discuss this announcement beginning at 10:45 a.m. ET Wednesday, October 10. To join the call, dial (888) 558-9538 and enter the passcode 5278399. International callers should dial (760) 666-3183 and use the same passcode. A slideshow accompanying the presentation will be posted to http://www.transdigm.com prior to the call. A telephone replay will be available for one week by dialing (855) 859-2056 and entering the pass code 5278399. International callers should dial (404) 537-3406 and use the same passcode. About TransDigm Group TransDigm Group Incorporated, through its wholly-owned subsidiaries, is a leading global designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, NiCad batteries and chargers, engineered latching and locking devices, rods and locking devices, engineered connectors and elastomers, cockpit security components and systems, specialized cockpit displays, aircraft audio systems, specialized lavatory components, seatbelts and safety restraints, engineered interior surfaces and related components, lighting and control technology, military personnel parachutes, high performance hoists, winches and lifting devices, and cargo loading, handling and delivery systems. About Esterline Esterline Corporation is a leading worldwide supplier to the aerospace and defense industry specializing in three core business segments: Advanced Materials; Avionics & Controls; and Sensors & Systems. Operations within the Advanced Materials segment focus on technologies including high-temperature-resistant materials and components used for a wide range of military and commercial aerospace purposes, and combustible ordinance and electronic warfare countermeasure products. Operations within the Avionics & Controls segment focus on technology interface systems for commercial and military aircraft and similar devices for land- and sea-based military vehicles, integrated cockpit systems, display technologies for avionics, training and simulation markets, secure communications systems, specialized medical equipment, and other high-end industrial applications. The Sensors & Systems segment includes operations that produce high-precision temperature and pressure sensors, specialized harsh-environment connectors, electrical power distribution equipment, and other related systems principally for aerospace and defense customers. Forward-Looking Statements Statements in this press release which are not historic facts are forward-looking statements under the provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to expectations of Esterline's future performance, profitability, growth and earnings; expectations of TransDigm's earnings per share and the financial impact of the proposed transaction; the financing of the proposed transaction; and the timing of the proposed transaction. All statements other than statements of historical fact that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements, including, in particular, statements about our plans, objectives, strategies and prospects regarding, among other things, the acquired business. We have identified some of these forward-looking statements with words like "believe," "may," "will," "should," "expect," "intend," "plan," predict," "anticipate," "estimate" or "continue" and other words and terms of similar meaning. All forward-looking statements involve risks and uncertainties which could affect TransDigm's actual results and could cause its actual results or the benefits of the proposed transaction to differ materially from those expressed in any forward-looking statements made by, or on behalf of TransDigm. These risks and uncertainties include, but are not limited to, closing conditions to the proposed transaction may not be achieved, the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, the effect of the announcement or pendency of the proposed transaction on the TransDigm's and Esterline's business relationships, operating results and business generally, risks related to diverting management's attention from ongoing business operations, the outcome of any legal proceedings that may be instituted related to the Merger Agreement or the proposed transaction, unexpected costs, charges or expenses resulting from the proposed transaction, Esterline's actual financial results for the year ended September 28, 2018 may differ from expected results, TransDigm may have difficulty obtaining required approvals, TransDigm may have difficulty implementing its strategic value drivers, and TransDigm may be impacted by the effects of general economic and industry conditions. Except as required by law, TransDigm undertakes no obligation to revise or update the forward-looking information contained in this press release. Additional Information and Where to Find It This communication is being made in respect of the proposed transaction involving Transdigm and Esterline. In connection with the proposed transaction, Esterline intends to file relevant materials with the Securities and Exchange Commission (the “SEC”), including a preliminary proxy statement on Schedule 14A. Promptly after filing its definitive proxy statement with the SEC, Esterline will mail the definitive proxy statement and a proxy card to each stockholder of Esterline entitled to vote at the stockholder meeting relating to the proposed transaction. This communication is not a substitute for the proxy statement or any other document that Esterline may file with the SEC or send to its stockholders in connection with the proposed transaction. BEFORE MAKING ANY VOTING DECISION, STOCKHOLDERS OF ESTERLINE ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE PROPOSED TRANSACTION THAT ESTERLINE WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT ESTERLINE AND THE PROPOSED TRANSACTION. The definitive proxy statement, the preliminary proxy statement and other relevant materials in connection with the proposed transaction (when they become available), and any other documents filed by Esterline with the SEC, may be obtained free of charge at the SEC's website (http://www.sec.gov) or at Esterline's website (http://www.esterline.com/) or by contacting Esterline's Investor Relations at 500 108th Avenue NE, Suite 1500, Bellevue, Washington 98004, or by calling (425) 453-9400. Participants in the Solicitation Esterline and TransDigm and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Esterline's stockholders with respect to the proposed transaction. Information about Esterline's directors and executive officers and their ownership of Esterline's common stock is set forth in its proxy statement for its 2018 Annual Meeting of Stockholders which was filed with the SEC on December 27, 2017, and its Annual Report on Form 10-K for the fiscal year ended September 29, 2017, which was filed with the SEC on November 21, 2017, and the Amendment No. 1 on Form 10-K/A, which was filed with the SEC on March 30, 2018. Information about TransDigm's directors and executive officers is set forth in its proxy statement for its 2018 Annual Meeting of Stockholders and its most recent Annual Report on Form 10-K. These documents may be obtained for free at the SEC's website at www.sec.gov. Additional information regarding the potential participants, and their direct or indirect interests in the proposed transaction, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with SEC in connection with the proposed transaction. Contact: TransDigm Esterline Liza Sabol John Hobbs Director of Investor Relations Sr. Director, Investor Relations (216) 706-2945 (425) 453-9400 ir@transdigm.com https://www.esterline.com/Newsnbsp;PressCenter/EntryId/6232/TransDigm-to-Acquire-Esterline-Technologies-in-4-Billion-All-Cash-Transaction.aspx