November 6, 2020 | International, Aerospace, Naval, Land, C4ISR, Security
The COVID-19 pandemic has exacerbated some of the risks that have always existed in the defense industrial base. Although government assistance and a robust Pentagon budget have helped offset initial trials, more challenges are looming.
One of the biggest risks to the defense industrial base is that some companies serving the military are too heavily leveraged toward the commercial sector or too reliant on international companies, financial analysts told Aviation Week's DefenseChain Conference.
“Some of these places are two weeks from bankruptcy,” says Chris Celtruda, managing principal at Destiny Equity Partners, says. Suppliers are beginning to falter because of a combination of factors, including the need to comply with cybersecurity standards, the pressure that prime contractors such as Boeing and Lockheed Martin have applied to them and their reliance on commercial business. A prime example is the recent bankruptcy of Impresa Aerospace, a Wichita-based company that made parts using computer numerical control machines as well as sheet metal parts and assemblies for Boeing and Lockheed military aircraft but was highly dependent on its work for the commercial Boeing 737 MAX.
The U.S. federal Paycheck Protection Program helped delay some business failures, but others are inevitable, says Rick Nagel, managing partner of Acorn Growth. “The Impresa bankruptcy is an example of a lot more insolvencies we may see,” he adds.
Weakness among niche companies could pose a problem for the Defense Department in the future. “I'm always amazed at how many critical systems have multiple single points of failure on major programs,” he says.
At the Pentagon, officials have been working to keep essential suppliers afloat and to keep production moving through its sprawling international industrial base.
For the U.S. Army, that has meant initial disruptions to Apache fuselage production in India and to the flow of generators from Mexico. The Pentagon and the State Department helped ease the stoppage, but the incident has caused them to review the full range of risks to its international supply chain.
“I think that we can navigate through this, though it's certainly always going to be complex in today's global economy,” says Patrick Mason, deputy program executive officer for U.S. Army Aviation, adding that he is in the position of putting pressure on vendors to reduce cost, particularly to provide savings on multiyear aircraft contracts.
One trend emerging along with the pandemic is a movement toward onshoring or reshoring overseas business for reasons of cybersecurity and the protection of the U.S. industrial base.
As that happens, and as the commercial aviation market sags, Raanan Horowitz, president and CEO of Elbit Systems of America sees opportunity. “We are trying to position ourselves around some of those discontinuities,” Horowitz says, adding that the company likes going after opportunities that are not necessarily glitzy but hold value. “We are intensifying efforts toward looking at licensing, taking over orphan product lines and positioning ourselves to be part of the long-term solution.”
Horowitz says Elbit is investing in U.S. infrastructure to capture new business. Industry officials see broad support for bringing more of the defense supply chain back to the U.S. The shift stems in part from the COVID-19-related economic downturn but also from longstanding concerns about China. In the fiscal 2020 National Defense Authorization Act, Congress passed restrictions on contracting with companies that use Chinese telecommunications equipment.
Though companies first look for the best value, the threat posed by Chinese parts that either do not work or could transmit classified information back to China is an ongoing concern, says John Luddy, vice president for national security policy at the Aerospace Industries Association. “The concept of reshoring of supplies to better connect our allies and friends, both from a production standpoint and from an operational functionality and alliance standpoint, I think the volume is getting turned up on that a little bit,” he says. “There's also a strong impetus in Congress to look at exactly how vulnerable we are. That's going to be a more intense discussion in the year to come than it has been.”
And that trend toward reshoring could have unintended consequences, warns Steve Grundman, founder and principal of Grundman Advisory.
“I'm genuinely concerned that benign moves to secure our supply chain to prevent nefarious supplies and code [coming] into particularly our defense supply chain or commercial aerospace supply chain could slip very easily into protectionism,” Grundman says. “If you want to really put pressure on the defense budget, ask the defense industry to reshore the supply chain.
https://aviationweek.com/defense-space/supply-chain/how-covid-19-affecting-defense-industrial-base
June 17, 2024 | International, Land
BRUSSELS, June 17 (Reuters) - France and Belgium signed a memorandum of understanding on Monday to strengthen their cooperation in land defence with both countries acquiring each a 10% stake in John Cockerill Defense, the defence unit of Belgian equipment maker John Cockerill. https://www.reuters.com/world/europe/france-belgium-strengthen-their-cooperation-land-defence-2024-06-17/
December 18, 2018 | International, Land
By: Todd South The Army has selected two companies to provide prototypes of a new armored, tracked vehicle to give infantry units necessary firepower Both Michigan-based General Dynamics Land Systems and BAE Systems will have the next 14 months to build and begin delivering 12 prototypes of the Mobile Protected Firepower vehicle. BAE Systems will build an M8 Buford Armored Gun System with new capabilities and components. GD submitted an offering that puts a version of its latest Abrams turret together with a chassis that uses past work on the United Kingdom's AJAX program. The ultimate product will be either a 105- to 120mm cannon and a tracked vehicle that can withstand a classified level of enemy fire. At least two of the vehicles should be able to fit into the back of a C-17 aircraft. The need is aimed at near-peer threats. Brig. Gen. Ross Coffman, director of the Next Generation Combat Vehicle Cross Functional Team, said that the current and future battlefield will challenge the firepower of the infantry. Right now, Infantry Brigade Combat Teams have artillery to knock out secured enemy positions. “But there's no precision munition to remove bunkers from the battlefield, to shoot into buildings in dense urban terrain,” Coffman said. The MPF vehicle and weapon will be used to “disrupt, break in and breach those secure defensive zones,” Coffman said. The requirement first emerged in the Army's vehicle modernization strategy in late 2015. The target was to give IBCTs a protected, long-range, cyber-resilient, precision, direct-fire capability for early or forcible entry operations. In February, GD and BAE, along with SAIC partnering with Singapore's ST Kinetics and CMI Defense, all submitted proposals. The SAIC team combined CMI's Cockeril 3105 turret with ST Kinetics next-generation armored fighting vehicle chassis. Officials would not discuss the reasons behind the selection. They expect a final decision to be made by fiscal year 2022. Fielding to the first units is expected by fiscal year 2025. The MPF is under the Army's NGCV CFT program, which is overseen by the Army Futures Command. The plans are for roughly 54 vehicles, initially. They will build 26 first, with an option to build 28 more and retrofit eight prototype vehicles. For the existing vehicle fleet, there's another program that's been conducting recent testing to also enhance the combat vehicle firepower and protection. The Army chose to evaluate two Active Protection Systems at a November live-fire rodeo, looking at whether either system could work as an interim protection system for one of its combat vehicles. The APS will also go onto the MPF vehicle in development at this time. The Israeli-made Trophy VPS by Rafael, a slimmer edition of the Trophy System already on the Abrams tank, and the German-made Active Defense System by Rheinmetall got a chance to showcase their products' abilities atop Strykers at the live fire, according to Military Times sister publication Defense News. Rheinmetall partnered with Michigan-based Unified Business Technologies. They've dubbed their system “Strike Shield.” Army representatives saw the Trophy VPS on a Bradley Fighting Vehicle at a demonstration in Israel in August, Defense News reported. Earlier this year, the Army awarded a $193 million contract to Leonardo DRS for its Trophy APS on the M1 Abrams tank. The program conducted four “soft kill” demonstrations using virtual threats with the system and controller. The APS is an interim solution as the Army develops its Modular Active Protection System as part of a larger suite of Vehicle Protection Systems. In late 2018, developers with the Tank Automotive Research Development and Engineering Center completed successful testing on the MAPS. The MAPS base kit is an array of sensors and countermeasures used with the Modular Active Protection Systems Controller, giving vehicle crews a single solution to run APS for incoming threats such as enemy drones or anti-tank weapons. Bill Beyer, MAPS Virtual Demonstrator lead, said in release following MAPS testing that the base kit would move into the vehicle program portfolio by mid-2019. Rafael was selected to provide its Trophy APS for the Abrams while IMI, also an Israeli company, has put forth the Iron Fist for the Bradley. Participants didn't fully install their systems on the vehicle. They put up mock rigs for testing in front of Strykers mounted their system on a Stryker. https://www.armytimes.com/news/your-army/2018/12/18/army-picks-two-companies-to-build-prototypes-for-a-whole-new-cannon-toting-vehicle-to-back-up-infantry/
February 1, 2022 | International, Naval
The Philippines has signed a contract with an Indian company for shore-based medium-range supersonic anti-ship missiles, enhancing the U.S. ally's ability to target adversarial ships from land.