Back to news

June 3, 2020 | International, Aerospace

COVID-19 Infects Defense Industry With F-35 Production Slowdown

Steve Trimble May 27, 2020

This was supposed to be a relatively easy year for Lockheed Martin's F-35 production. As 2020 began, the stealth fighter program's three-year growth spurt had subsided after annual deliveries more than doubled between 2017 and 2019. Lockheed planned to deliver 141 F-35s in 2020, only seven more than in 2019.

But the F-35 supply chain is not immune from the global disruption caused by the COVID-19 pandemic. After signaling during a first quarter earnings call in April that a production slowdown was likely, Lockheed confirmed the impact on May 19. The company issued a new forecast of 117-124 F-35 deliveries this year. If Lockheed is unable to recover in the second half, the slowdown would mark the first year-over-year decrease in F-35 deliveries since the program began.

“However, we will accelerate production when we return to pre-COVID-19 conditions and could see this number decrease,” the company says.

The company's new financial guidance reflects the lower F-35 delivery total, with net sales for the year falling to a range of $62.25-64 billion from $62.75-64.25 billion. Other large F-35 suppliers include Northrop Grumman (center fuselage, radar), Raytheon Technologies (engine, distributed aper-ture system) and BAE Systems (aft fuselage, electronic warfare suite).

It was not immediately clear which customers and variants would be affected by the potential shortfall of 18-24 F-35 deliveries in 2020.

The Defense Department is closely watching the F-35, its single-largest production system. So far, senior acquisition officials expect the overall impact of the novel coronavirus on weapon system production to be manageable. But the Pentagon leadership considers the military aircraft industry an exception. Although demand and domestic U.S. military spending remain intact, the military aviation supply chain's links to the collapsing commercial aircraft market is causing delays.

“I think [military] aviation has had a more acute sensitivity to supplier disruptions, largely driven by the massive upheaval in the commercial aviation market,” said James Geurts, assistant secretary of the Navy for research, development and acquisition. “Many of the aerospace companies were blended between military and commercial, and with commercial just falling through the floor, their abilities to stay open and keep their workforce has been a little bit more challenged.”

Another sector Geurts is watching is the market for command, control, communications and computers and intelligence (C4I). “We're trying to track all of it,” he says. “But the most immediate impact we've seen has been on aviation.”

Lockheed's F-35 assembly line in Fort Worth was hit hard by the COVID outbreak in mid-April. One employee, Claude Daniels, died after reporting COVID-19-related symptoms to a supervisor. Another F-35 employee, who survived, broadcast a Facebook Live video from his hospital bed, pleading with his unionized co-workers to sanitize their workspaces even if it is not in their job description.

The company's management has said that the F-35 assembly line adopted new protocols in response to the COVID-19 pandemic, which included regularly sanitizing equipment and quarantining employees exposed by co-workers or others to the virus.

The COVID-19 response is not the only pressure on the F-35's production system. Lockheed exceeded the overall delivery target by three aircraft in 2019, but slower production of the less mature F-35C airframe nearly caused the company to miss the annual goal. To compensate, Lockheed moved up deliveries of four F-35As originally scheduled for 2020 to the end of 2019, allowing the company to beat the delivery target by three aircraft instead of missing it by one.

Before the impact of the virus, the F-35's global supply chain was already strained by the three-year production ramp-up from 2017 to 2019. Late part deliveries jumped to 10,000 in 2019 from 2,000 in 2017, according to a May report by the Government Accountability Office (GAO). Monthly parts shortages, meanwhile, leaped to 8,000 in July 2019 from 875 a year before, the GAO says. The shortages represent a fraction of the 300,000 parts in each F-35, but the trend offered a glimpse of the pressure on the supply chain to meet demand during the ramp-up.

https://aviationweek.com/defense-space/supply-chain/covid-19-infects-defense-industry-f-35-production-slowdown

On the same subject

  • COVID Can’t Stop A Busy Summer For Army FVL

    May 8, 2020 | International, Aerospace

    COVID Can’t Stop A Busy Summer For Army FVL

    Despite disruptions worldwide, Future Vertical Lift flight tests, virtual industry days, and design reviews are all moving ahead on schedule or mere weeks behind. By SYDNEY J. FREEDBERG JR.on May 07, 2020 at 5:07 PM WASHINGTON: As the Army urgently develops weapons to counter Russia and China, it's largely staying on its tight schedule despite both the COVID-19 pandemic and the service's own history of dysfunction and delay. A prime example is the Future Vertical Lift initiative to replace existing helicopters and drones, which is on track for all but two of more than 20 major events – from field tests to contract awards – happening this year. Half a dozen are scheduled for May and June alone. What's the biggest impact COVID has had on FVL so far? Of the five project managers who spoke to reporters this morning, just one said he's definitely delaying something, a Critical Design Review for the new Improved Turbine Engine. How big was that delay? Just two weeks. The engine system CDR will start June 15th instead of June 1st, said the turbine PM, Col. Roger Kuykendall. But the deadline to complete the review wasn't until October, he went on, “so we're actually still ahead of our schedule.” The other major impact has been on combat units field-testing potential Future Tactical Unmanned Aerial System drones, but that's still in flux, said the unmanned aircraft PM, Col. Scott Anderson. Masked soldiers began flying one contending design, the Arcturus JUMP-20, began at Fort Riley a month ago. The second test unit, at Fort Campbell, started flying a different contender last week, as planned, Col. Anderson said. The third unit, at Fort Lewis, was scheduled to start in June: “The had asked to move back to July,” he said, “but it looks like, as of this morning, they're going to maybe try to come back to June.” That the FTUAS field tests are happening mostly on schedule is particularly remarkable, because it takes a team of soldiers to operate and maintain the drones, and they can't maintain social distancing all the time. Most of the other FVL projects are in different stages of development where schedules, while packed, are full of activities that are a lot easier to do online, like planning sessions and digital design. But even where physical objects have to be built or flown, the project managers stay they're staying on schedule. For the Future Long-Range Assault Aircraft to replace the Reagan-era UH-60 Black Hawk, PM Col. David Phillips said, “our demonstrators are continuing to fly.” Those are the Bell V-280 Valor tiltrotor and the Sikorsky-Boeing SB>1 Defiant compound helicopter, which despite the term of art “demonstrator” are de facto prototypes. The companies are now refining their designs and, in 2022, the Army will choose one for mass production. While Phillips didn't provide details like flight hours – the Defiant has had a lot fewer so far – he said both aircraft are still providing test data to mature key technologies like flight controls. FLRAA's smaller sister is the Future Attack Reconnaissance Aircraft, a light scout to replace the retired OH-58 Kiowa. Once again it's Bell and Sikorsky competing, but for FARA they haven't built the prototypes yet. Those are set to fly in 2023. (That said, Sikorsky's existing S-97 Raider is very close to their FARA design). Most of the work this year is being spent on digital design, said the FARA PM, Col. Gregory Fortier, but that should finish by December, so preparations to build the physical prototypes do have to get underway now. “We have currently seen no impact, [but] there are certainly concerns within Bell and Sikorsky about long lead materials and shipping and the [subcontractors] at the second and third tier,” Col Fortier said. “They are okay with the summer timeframe and into the fall,” Fortier said. “If this thing stretches six months to a year, then that's a different conversation.” The FARA scout, FLRAA transport, and future drones will all have as many components in common as possible, especially electronics, and need to seamlessly share both tactical and maintenance data. To make this happen, they're being designed to a common set of technical standards known as the Modular Open System Architecture, allowing the Army to plug-and-play MOSA-compliant components from any company for both maintenance and upgrades. While existing Army aircraft can't be retrofitted with the complete open architecture, the Army plans to upgrade them with a mini-MOSA called the Aviation Mission Common Server. AMCS will both provide some of the benefits of open architecture to the current fleet and real-world experience to help build the future system. AMCS, too, remains on schedule, the project manager said. “We are currently on track to award an OTA [Other Transaction Authority contract] in June 2020 and negotiations are currently ongoing,” Col. Johnathan Frasier said. The Schedule To Stay On Future Vertical Lift is doing a lot this year. Here's a list of most – not all – of the things they've accomplished so far and what they aim to do. A startling amount of it is due in June. Modular Open Systems Architecture (involves multiple project managers) April: Over 300 government and industry participants joined in a virtual meeting of the Architecture Collaboration Working Group fleshing out MOSA. June: A follow-on ACWG meeting is scheduled. The Army will award an Other Transaction Authority (OTA) contract for the Aviation Mission Common Server (AMCS). Engine & Electrical (PM: Col. Roger Kuykendal) May-June: Tentative date for an industry day on electrical systems, including batteries, generators, Auxiliary Power Units (APUs), and thermal management (i.e. cooling). June 15-19: Critical Design Review for the integrated engine system. October: Power management systems demonstration, conducted with the Army C5ISR center. Fall: Improved Turbine Engine testing begins. Future Long-Range Assault Aircraft (PM: Col. David Phillips) March 17: The Army awarded Bell and the Sikorsky-Boeing team contracts for Competitive Demonstration & Risk Reduction (CDRR) of their rival FLRAA designs. June: FLRAA and FARA will hold a joint industry day – virtually, of course – on their shared mission systems. And the FLRAA competitors will deliver conceptual designs to help shape the program's final requirements. Fall: Those FLRAA requirements will come up for review by the Army Requirements Oversight Council (AROC), a high-level body usually chaired by either the four-star boss of Army Futures Command or even the Army Chief of Staff himself. Future Attack Reconnaissance Aircraft (PM: Col. Gregory Fortier) March 25: The Army picked Bell and Sikorsky to build competing prototypes. May 15: Industry responses are due for a formal Request For Information (RFI) on FARA mission systems. June: FLRAA and FARA hold their joint industry day on shared mission systems. Boston Consulting Group will deliver the first of two studies on FARA-specific mission systems. Summer (month not specified): Deloitte will deliver the second FARA mission systems study. Sikorsky and Bell will both go through Preliminary Design Review. December: Sikorsky and Bell will submit their final designs. With those approved, they'll begin building the actual prototypes. Unmanned Aircraft Systems (PM: Col. Scott Anderson) April: The first FTUAS contender began field testing (formally “demonstrations”) at Fort Riley, Kan. May: The second FTUAS contender began field testing at Fort Campbell, Ken. May-June: This is the likely window for the Army to award three Other Transaction Authority contracts for the mini-drones known as Air-Launched Effects (ALE). June-July: Third FTUAS contender begins testing at Fort Lewis, Wash. July: Fourth contender begins testing at Fort Bliss, Tex. August-September: A fifth unit begins testing at Fort Bragg, NC. There are only four different designs being studied, so this brigade will double up on of the designs already in testing. Fall: The Army Requirements Oversight Council will review the final requirement for FTUAS – which will be based on how the contenders actually performed – as well as requirements for a highly automated Scalable Control Interface (SCI) for all future drones. https://breakingdefense.com/2020/05/covid-cant-stop-a-busy-summer-for-army-fvl

  • British Royal Air Force invests in space capabilities

    May 17, 2021 | International, Aerospace

    British Royal Air Force invests in space capabilities

    The head of the Royal Air Force discusses the Ministry of Defence's goals in space.

  • Coronavirus Hampering Defense Contractor Operations, Reader Survey Finds

    May 19, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

    Coronavirus Hampering Defense Contractor Operations, Reader Survey Finds

    t's harder to win business amid a pandemic, said one-third of industry respondents in a Defense One reader survey. Federal contractors and private-sector workers say the coronavirus pandemic is hurting business and their ability to compete for government work, a new survey of Defense One readers has found. More than 75 percent said COVID-19 had a moderate, major, or extreme impact on their company's day-to-day operations. About 22 percent said the virus had a minimal impact; 2 percent, no impact. Nearly 60 percent of the respondents said coronavirus has forced them to slow or pause production. Nearly 40 percent said their business has seen disruptions to its cash flow. Defense One commissioned the survey, which was conducted by Government Business Council, a division of Defense One's parent company, Government Executive Media Group. The survey was conducted May 8-14 and received 677 responses, yielding a 5 percent margin of error. Of those, 313 self-identified as a government contractor or private sector employee. Related: 62% Disapprove of Trump's Coronavirus Response, Reader Survey Finds In March, the Pentagon began paying its contractors more money up front so these large firms could send more money to the smaller companies that make up their vast and diverse supply chains. Collectively, companies have sent or pledged to send billions of dollars to their suppliers in a quicker fashion. Still, Ellen Lord, defense undersecretary for acquisition and sustainment, said last month that she was expecting a three-month slowdown in weapons deliveries as companies faced shutdowns and modified their processes and procedures to comply with social distancing and other guidelines. About 30 percent of contractors and private sector workers said their business has experienced supply-chain disruptions. While more than one-third of respondents said social distancing has hurt their company's ability to compete for government contracts, more than half said social distancing has made no difference in their company's ability to win contracts and 12 percent said restrictions have helped their company's competitive advantage. More than 17 percent said their business has had to lay off employees; 18 percent said their companies have furloughed workers. One-quarter of respondents said lack of access to senior officials and decision makers and the inability to attend networking events has affected their business. With conferences, trade shows and other in-person events on hold indefinitely, trade associations and event organizers have looked for virtual ways to replicate not only speaker presentations, but the sideline discussions and other types of networking that many consider essential to doing business in the defense sector. “Your ability to pull somebody off the stage coming off a panel, the ability to ask a question in the question-and-answer period in this environment, is a little bit challenging,” Hawk Carlisle, a retired Air Force general who is CEO of National Defense Industrial Association, said in an interview late last month. “It is having an effect and I do believe the longer this goes on it will continue to have an effect.” This week, NDIA, which represents 1,700 large and small companies and has 70,000 individual members, became the first to transform a large conference and trade show into a fully virtual conference. Typically, its SOFIC event is held in Tampa, near the U.S. Special Operations Command headquarters. This year, the speeches and panel discussions were broadcast online. What's more, the organization facilitated meetings between companies and government officials. NDIA, which usually hosts dozens of events around the country each year, is considering new ways to hold its gatherings, including hosting hybrid events, with some people in attendance and others attending virtually, Carlisle said. https://www.defenseone.com/business/2020/05/coronavirus-hampering-defense-contractor-operations-reader-survey-finds

All news