February 21, 2024 | International, Aerospace
The company has struck a partnership with Tokyo spanning civilian and defense topics, as executives hope to sell the MQ-9B SeaGuardian drone.
September 21, 2023 | International, Land, Security
The command team for the centre based at CFB Borden was removed after complaints were received by the Canadian Forces.
November 17, 2020 | International, Aerospace, Naval, Land, C4ISR, Security
By: Eric Chewning and Frank Coleman III After years of growth, defense budgets will likely flatten (or decline). In such a financial environment, the U.S. Department of Defense will consider trade-offs between funding modernization, sustaining legacy equipment and preserving force structure. These hard choices will be informed by the DoD's strategic acquisition priorities, which will likely continue to reflect the need for innovation around leading-edge capabilities in areas like space, C5ISR, long-range precision fires, unmanned vehicles and artificial intelligence. To support these evolving mission requirements, the defense industry will need to ensure the industrial base is able to deliver technological advantage. This requires attracting world-class talent as well as the necessary financial capital to operate global industrial enterprises. Attracting these resources requires continued value creation through growth and return on invested capital improvements. But in a down budget environment, where is this growth to come from? While many will think organic growth is the best value-creating option (and often is), the answer also lies in augmenting a classic portfolio strategy with a systematic approach to transactions. Mergers and acquisitions are a proven growth accelerant for defense companies, and have generated superior shareholder returns and greater resilience for companies that have pursued it systematically. At first glance, this may simply seem like an obvious description of recent history. The aerospace and defense sector, after all, has seen rapid consolidation in the last five years, with deals worth $358 billion struck between 2015 and 2019, three times the total between 2010 and 2014. The problem for defense companies looking for more of the same is that this wave of consolidation now appears to have run its course. The combined market value of the top five defense hardware players is now more than four times that of the next five; so even as further mega-deals are theoretically possible, they will be increasingly difficult to execute, underscoring the value of programmatic M&A. Distinct from selective or organic deal-making approaches, programmatic M&A involves a company conducting two or more small or midsized deals per year, with an aggregate value greater than 15 percent of its market capitalization over five years, that align with their overall corporate strategy (which is hopefully linked to the “fast streams” of growth in the budget (see exhibit below)). These deals get choreographed around a specific business case, such as scaling or integrating vital digital capabilities, and are rooted in a disciplined appraisal of transactions. In the defense industry, programmatic M&A should be deployed against a strategy supported by the customer's need for innovation, lower costs and better mission outcomes for the war fighter. Our analysis shows that over the last decade, few defense companies took a programmatic approach to M&A. Those who did outperformed their peers in total shareholder returns by 10.4 percent. M&A was also an important key to resilience during the last defense spending downturn in 2007-2011: The top quintile of outperforming companies, as well as optimizing cash and flexing capex, used it as an opportunity to grow less cyclical parts of the business and build digital capabilities. Defense companies may be deterred by the current market environment, featuring stretched valuations, competition from institutional capital and a squeeze on mid-tier players. They may be cautious about the challenge of integrating smaller nondefense acquisitions into company processes and culture — a process that is easier to get wrong than right to be sure. The very complexity of these circumstances creates opportunities for bold players to differentiate themselves from their peers, align their strategies with national defense priorities and add significant value for shareholders. When done well, programmatic M&A can form a central pillar of their growth strategy. With a proactive approach to deal sourcing, holistic diligence, and in-house execution and integration expertise, companies can establish M&A as a critical capability and avoid the risks of reactive, one-off projects. In the challenging environment that confronts the defense industry today, those who act boldly will succeed in creating enduring businesses that can adapt to the evolving needs of the national defense. Eric Chewning and Frank Coleman III are partners at McKinsey and Company. Chewning previously served as chief of staff in the Office of the Secretary of Defense, and before that as the Pentagon's industrial chief. https://www.defensenews.com/opinion/commentary/2020/11/16/why-defense-firms-need-to-get-systematic-about-ma-big-and-small/
June 18, 2019 | International, Aerospace
By SYDNEY J. FREEDBERG JR. WASHINGTON: This summer, Army soldiers will deploy to Afghanistan with air support literally in the palm of their hands: the 1.16-ounce Black Hornetmini-drone. New ground robots are entering service too, next year — not to fight but to haul supplies, at least at first — but field tests have convinced the Army to issue these often-cumbersome mechanical mules to specialists and only loan them to frontline troops as needed. By contrast, soldiers are so consistently and unequivocally enthused about the mini-drones that the Army is buying 9,000 systems — each with two drones — over three years to issue to its smallest and historically most vulnerable units, nine-man infantry squads. The mini-drone and larger robots are all part of a wider revolution in the long-suffering infantry, a revolution sparked in large measure by former Defense Secretary Jim Mattis. The Marines, Mattis's old service, have issued upgraded 5.56 mm rifles and are adding a specialized drone operator to every rifle squad. The Army is going much farther, developing new 6.8 mm rifles, high-tech targeting goggles, virtual-reality training, and, of course, robots. Now, none of these unmanned systems is truly autonomous, so they require a human to run them by remote control, which in turn requires a functioning battlefield network that hasn't been shut down by enemy jamming. The FLIR Black Hornet has a lot of automated functions and only flies short missions, so you don't need a soldier babysitting it all the time. Ground robots, however, require much more oversight, because they have to avoid rocks, bogs, tree stumps, and other obstacles that no unmanned air vehicle has to worry about and that artificial-vision software still struggles to spot. The Army is eager to improve the technology so that, instead of one soldier remote-controlling one robot, they can have one soldier overseeing a largely autonomous swarm. But even today's limited autonomy allows for big changes on the battlefield. The palmtop Black Hornet — dubbed Soldier-Borne Sensor (SBS) by the Army — is already in the hands (literally) of a brigade of the elite 82nd Airborne that's about to deploy to Afghanistan. The second unit scheduled to get the mini-drone, starting this fall, is the 1st Security Force Assistance Brigade, which has already served in Afghanistan. For the first time, a squad leader will have the ability to scout ahead by air before exposing human soldiers on the ground. The SBS has sensor options for both night and day, and it can fly about 20 minutes before needing to recharge. But the squad-level mini-drone is just the entry model. Larger units will get larger, more capable, but also more expensive and more maintenance-hungry drones. “Our vision is every echelon has unmanned aerial systems,” said Don Sando, civilian deputy to the commander of the Army's infantry and armor centerat Fort Benning, Ga. “The question is, how many?” While squads get the Black Hornet SBS, platoons will get the slightly larger Short-Range Reconnaissance (SRR) drone, Sando and other Army officials told reporters in a conference call last week. A series of tests this month, September, and January will whittle six SRR competitors down to one that will enter service in April 2020. The winner must weigh three pounds or less, fly for 30 minutes, and be able to “perch and stare,” landing in a vantage point overlooking a target area so it can keep watch without burning through its flight time. Companies will stick with the current RQ-11 Raven, which is still small enough that soldiers launch it by picking it up and throwing it. Battalions currently use the Raven as well, but the Army plans to develop a new Long-Range Reconnaissance drone for them to use. The LRR isn't an official program yet, however. Brigades currently have the RQ-7 Shadow, but that aging system needs a catapult to launch and a runway to land. It will be replaced by the Future Tactical Unmanned Aerial System (FTUAS), which takes off and lands vertically like a mini-helicopter, starting in 2021. Divisions currently use the Grey Eagle, a variant of the venerable Predator, but the Army is experimenting with potential Advanced UAS drones to replace it too. Ground Bots For Some The Army is also fielding ground robots, but these machines are still much clumsier and harder to work with than aerial drones, so they're being issued only to specialist units. That includes what was formerly called the SquadMultipurpose Equipment Transport but is now renamed the Small Multipurpose Equipment Transport, because it's not going to belong to an individual squad. The SMET, by either name, is still a small unmanned ground vehicle, about the size of a golf cart, designed to trundle along with the foot troops, hauling supplies and gear like an old-fashioned pack mule. It must carry 1,000 pounds of supplies and gear over 60 miles in 72 hours, trundling along with foot troops, and provide three kilowatts of power to recharge batteries for night vision goggles, radios, and other electronics. Four competitors remain in contention: the Polaris MRZR, Howe & Howe Grizzly, HDT Wolf, and General Dynamics MUTT. “They're all viable candidates. They all met the standards of range, offloading power, silent watch capability, payload carrying,” Sando said. “Soldier feedback on all of them was very comparable with regard to what missions they're good for — and what conditions they're not appropriate for.” The Army plans to field the winner starting next year to selected training centers, combat brigades, and support companies — but not infantry squads. “We found out in the operational tech demonstration [that] it can best be supported now at the battalion level,” Sando said, which is the lowest echelon of an infantry unit to include technical specialists such as a heavy weapons company. The Army's objective is to incorporate the new technologies without adding personnel to take care of them. The issue with SMET is not just the maintenance the robots require — though that can be a large burden for a squad of nine — but also their limited mobility. “There are places where we ask our soldiers to go where nothing else can go... jungle terrain, steep embankments, water, and dense urban environments,” Sando said. “There are areas soldiers can walk and crawl and climb that we just couldn't put a vehicle of this size with them.” The SMET remains very useful for long marches with heavy loads, the bane of infantry soldiers increasingly overburdened by body armor, ammunition, and electronics. Being able to recharge gear from the robot instead of carrying several days' worth of batteries for every item of equipment is itself a significant reduction in weight. Future SMET variants, Sando said, might carry long-range sensors, communications relays, or even weapons. But when foot troops have to go places you can only go on foot, they need to be able to leave the robot vehicles behind and let someone else take care of them. By contrast, Sando said, “the Soldier-Borne Sensor is smaller than a pack of cigarettes, [so] I can use it when I need it, I can put it back.” https://breakingdefense.com/2019/06/army-buys-9000-mini-drones-for-squads-rethinks-ground-robots-for-2020/