April 29, 2020 | International, Aerospace, Naval, Land, C4ISR, Security
Experts see domestic projects taking priority over national security in the coming years.
After five straight years of growth, global defense spending is expected to decline in the coming years as nations deal with the economic fallout of the coronavirus pandemic, analysts say.
In 2019, global defense spending topped $1.9 trillion, according to the Stockholm International Peace Research Institute's latest tally. The U.S. represents 38 percent of the world's defense expenditures and with China, the two superpowers account for 52 percent of the world's defense spending. But because of COVID-19, experts anticipate a shift government spending worldwide toward domestic projects and away from weapons and the military.
“What we can expect is that spending [is] really going to decrease,” Nan Tian, a defense spending expert with the institute, said Tuesday during a Stimson Center webcast. “We've seen this historically following the [2008 and 2009 financial] crisis where many countries in Europe really started to cut back on military spending.”
Even before the coronavirus sent the global economy into a tailspin, U.S. defense spending had been predicted to flatten in the coming years. Now with trillions of dollars being spent on massive coronavirus stimulus packages, flat defense spending levels could wind up being a best-case scenario.
“In today's world with [coronavirus], flat defense budget, I think, is what everybody is hoping for because it could go the other direction; it could go negative,” Hawk Carlisle, president and CEO of the National Defense Industrial Association and a retired four-star commander of Air Combat Command and Pacific Air Forces, said in an interview Tuesday. “This is going to be years to climb out of.”
One reason for the expected spending dip: the deficit. Regardless of the results of the November presidential and congressional elections, deficit reduction is likely to become a priority. A recent estimate pegs the 2020 deficit at $3.8 trillion. But it is expected that a Trump re-election would keep Republicans in more of a spending mood.
“If the presidency goes to a Democrat, then Republicans are going to get more about being fiscal conservatives again sooner,” Todd Harrison, a defense budget expert with the Center for Strategic and International Studies, or CSIS, said during a Monday webcast. “If Trump wins a second term, we probably have another year or two reprieve from that.”
Mackenzie Eaglen of the American Enterprise Institute is wary that lawmakers eager to reduce federal spending in the wake of coronavirus bailouts could enact a deficit-cutting measure akin to the Budget Control Act of 2011, which capped defense spending annually between 2013 and 2021.
“The Budget Control Act by another name ... could come as fast as next [fiscal] year,” she said on the same webcast.
While defense and security spending is typically a top priority of Republicans and defense-minded Democrats, stabilizing the U.S. economy and healthcare could become a higher priority regardless of who wins the election and control in Congress. Among voters in both parties, there is wide public support for reducing expensive overseas military interventions.
DON'T MISS
“[I]solationism may exert a countervailing force, as there is demand to steer resources away from defense and towards domestic needs (healthcare, education, jobs),” Byron Callan, an analyst with Capital Alpha Partners, wrote in an April 23 note to investors.
“[W]e are seeing that awarding disproportionate resources to military spending may be weakening the resilience of other sectors in our economy,” Mandy Smithberger — director of the Straus Military Reform Project at the Center for Defense Information, part of the Project on Government Oversight — said on the Stimson Center webcast.
“I think we are going to be seeing real political debate about how much money should go to military spending, how much we should be prioritizing arms sales and interests of the defense industry,” she said.
Unlike the past decade when foreign arms sales, to some extent, were a backstop to weapon makers amid U.S. defense spending declines, this time around will likely be different since the world economy is dealing with coronavirus. Smithberger said low oil prices could weaken the buying power in the region that spends heavily on U.S. weapons.
While the U.S. and China remain the top two defense spenders, last year India and Russia jumped ahead of Saudi Arabia, which fell to fifth on the list. Germany climbed from ninth to seventh — jumping ahead of the U.K. and Japan. NATO allies collectively spent just over $1 trillion. All of that spending is likely to drop.
January 11, 2024 | International, Land, C4ISR
The system fuses a myriad of sensors into a lightweight Head Up Display that provides unprecedented situational awareness. Elbit America’s prototype evolves through three prototype development phases during a 72-month...
July 30, 2019 | International, Aerospace
July 29, 2019 - Edgewood, NY -- CPI Aerostructures, Inc. (“CPI Aero®”) (NYSE American: CVU) today announced that it has been awarded a $65.7 million indefinite-delivery/indefinite-quantity (IDIQ) contract from the United States Air Force to provide structural modification kits, program management, logistics, and other sustainment services in support of Phase 3 of the T-38C Pacer Classic III Fuselage Structural Modification Kit Integration program (“PC III”) and the Talon Repair Inspection and Maintenance (“TRIM”) program. The company also received its first delivery order under the contract valued at $3.4 million for which work will commence immediately. For more than 50 years, the Northrop T-38 has been the principal supersonic jet trainer used by the US Air Force. PC III and TRIM are expected to increase the structural service life of the T-38 beyond 2030. PC III is a three-phase aircraft modification program that began in 2011 to increase the structural service life of a certain number of T-38C Talon aircraft. Requirements for Phase I were fulfilled by Northrop Grumman Technical Services. In 2015, CPI Aero was awarded Phase 2 of PC III and is currently supplying kits and services to the USAF under that contract through 2021. Under the new contract announced today, CPI will support the final phase of PC III as well as TRIM. The TRIM program is a separate USAF structural modification effort that will extend the structural service life of T-38A and T-38 model types, as well as, T-38C models that were not modified during PC III. Douglas McCrosson, President and CEO of CPI Aero, stated, “We are honored to have been chosen by the U.S. Air Force to continue our work on PC III and begin work on TRIM , two programs that are essential to the critical mission of training our future military aviators. This contract recognizes our excellent past performance as a prime contractor to the USAF and our long history with the T-38 platform that dates back to 2001. It is a testament to our reputation as an exceptional supply chain partner and leverages the investments we have made in developing world class engineering, supply chain management and program management capabilities.” For the PCIII Phase III requirement, the period of performance is anticipated as a three-year ordering period, with an additional one year for delivery after an order is placed. For the TRIM requirement, the period of performance is anticipated as a 10-year ordering period, with an additional one year for delivery after an order is placed. About CPI Aero CPI Aero is a U.S. manufacturer of structural assemblies for fixed wing aircraft, helicopters and airborne Intelligence Surveillance and Reconnaissance and Electronic Warfare pod systems in both the commercial aerospace and national security markets. Within the global aerostructure supply chain, CPI Aero is either a Tier 1 supplier to aircraft OEMs or a Tier 2 subcontractor to major Tier 1 manufacturers. CPI also is a prime contractor to the U.S. Department of Defense, primarily the Air Force. In conjunction with its assembly operations, CPI Aero provides engineering, program management, supply chain management, and MRO services. CPI Aero is included in the Russell Microcap® Index. The above statements include forward looking statements that involve risks and uncertainties, which are described from time to time in CPI Aero's SEC reports, including CPI Aero's Form 10-K for the year ended December 31, 2018, and Form 10-Q for the three-month period ended March 31, 2019. CPI Aero® is a registered trademark of CPI Aerostructures, Inc. For more information, visit www.cpiaero.com, and follow us on Twitter @CPIAERO. Contact: Vincent Palazzolo Chief Financial Officer CPI Aero (631) 586-5200 www.cpiaero.com Investor Relations Counsel: LHA Investor Relations Sanjay M. Hurry/Jody Burfening (212) 838-3777 cpiaero@lhai.com www.lhai.com View source version on CPI Aero: http://www.cpiaero.com/cpi-aero-announces-%2465.7m-air-force-contract.html https://www.epicos.com/article/449408/cpi-aero-announces-657-million-air-force-contract-t-38-aircraft-modification-kits
November 18, 2020 | International, Naval
Hengelo, November 18, 2020 – Damen Schelde Naval Shipbuilding and Thales signed on November 17, 2020,the contract for the delivery and full integration of Thales's Mission and Combat System for the four MKS 180 class frigates contracted by the German Navy. The system will be designed by Damen and completely built by German shipyards, under Damen's project management. Valued at €1.5B, the contract illustrates Thales's leading position in global naval integration. It will be executed by Thales's naval Centers of Excellence in Hengelo (the Netherlands), Kiel and Wilhelmshaven (Germany) in cooperation with a substantial number of German subcontractors. Underpinning this contract is the proven cooperation of German and Dutch naval industries, including numerous joint opportunities for Damen and Thales in the Netherlands to innovate within naval shipbuilding projects, often with the participation of the Netherlands' Ministry of Defence. The project underscores Damen's and Thales's ambition to build further cooperation with shipyards and partnering industries in high-end European naval programmes. Thales's Mission and Combat System includes the comprehensive Tacticos Combat Management System and the AWWS (Above Water Warfare System) Fire Control Cluster. The contract includes four ship systems, logistic services and multiple land-based test and training sites, as well as the option for one or two additional ships. AWWS is a cutting-edge warfare suite that helps the ship crews to counter and neutralise complex saturation attacks by continuously analysing and optimising the tactical environment and deployment of resources. AWWS will be combined with APAR* Bl2, the evolved version of Thales's proven AESA* multifunction radar. In 2019, Thales signed an AWWS development contract for the new M-frigates for the Belgian and Dutch Navies. In the past years, Thales has been awarded several large contracts by European NATO navies, thanks to innovative solutions and its proven reliability as an industrial partner. These contracts have made Thales the de facto naval combat system partner of NATO. The first ship of the MKS 180 class will be operational in 2028. The entire programme will run for over ten years. “Winning such a substantial contract within the strict framework of an objective scoring system reinforces our global leading position in high-end naval integration. Thanks to our innovative capabilities, the German Navy will be able to execute both current and future tasks whilst substantially contributing to stability in the operational theatres all over the world.” Gerben Edelijn, CEO of Thales Netherlands. “As a partner in the MKS 180 programme, Thales Deutschland not only contributes to a high German value-added share, but also brings many years of experience in European cooperation and proven systems expertise. This programme will create new, high-quality jobs in Germany, within an exemplary framework of European defence cooperation. We will also contribute to maintaining the German Navy's operational capability at the highest level within the alliance,” Dr. Christoph Hoppe, CEO of Thales Deutschland. “We are very honoured by this notification which further solidifies our long-standing cooperation with the German Navy and Damen. We sincerely thank our customers for their continued trust. This huge contract anchors our position as global leader in high-end naval systems integration. The German Navy will benefit from cutting-edge technological systems thanks to the diversity of talents at Thales”. Patrice Caine, Chairman and CEO of Thales. * APAR: Active Phased Array Radar * AESA: Active Electronically Scanned Array Faiza Zaroual Media Relations and Social Media, Land & Naval Defence, Thales Group faiza.zaroual@thalesgroup.com Press office : +33(0)1 57 77 86 26 +33 (0)7 81 48 80 41 @ThalesDefence View source version on Thales Group: https://thales-group.prezly.com/damen-and-thales-to-build-the-german-mks-180-frigate-of-the-future?utm_source=twitter&utm_medium=social&utm_term=&utm_content=&utm_campaign=TCKM