August 21, 2023 | International, Naval
US Navy shipbuilders’ union approves labor pact at Bath Iron Works
Workers are receiving an increase in contributions to their national pension plan while health insurance costs will grow.
December 10, 2019 | International, Aerospace
Lockheed Looks To More F-35 Development Work
Michael Bruno
Lockheed Martin is looking to new government interest in follow-on modernization (FOM) upgrades of the F-35 Joint Strike Fighter to drive future business returns on top of what could be ballooning sustainment revenue, according to the company's chief financial officer (CFO).
CFO Ken Possenriede told a Credit Suisse investor conference this month that FOM and sustainment will drive business growth out of the F-35 for Lockheed and its shareholders as production returns shrink with unit price reductions and maturing production.
“We ended the SDD [system design and development] program, but the customer still is looking at capability that they want,” he told financial analysts and investors. “So you'll see growth there and in sustainment.”
Lockheed Martin expects to deliver 131 F-35 Joint Strike Fighters this year, compared with 91 in 2018, and should deliver 140 in 2020. Over the next few years, Lockheed expects total international demand for the F-35 to drive production to about 175 a year, most of which will be built in Fort Worth, but with some finished in Japan or Italy.
But because the price per aircraft has been reduced 13% over low-rate production lots 11-14, to below $80 million per jet for the A variant, that part of the program–“the lion's share” now–is increasingly becoming minimized as a moneymaker.
“The reduction in price has been faster than the ramp-up in quantity,” Possenriede said. “So it's going to be, at least in the short term, [that] you'll probably see modest growth in production revenue.”
Lockheed won the original $19 billion SDD contract in 2001, but spending on the FOM, also called Block 4 improvements, could reach an additional $16 billion under Pentagon plans discussed last year.
At the same time, the F-35 fleet is expected to more than double from about 400 aircraft to 1,000 in the next couple of years.
“You'll have more sparing, some more repairing,” he said. “But then you'll see a larger influx of the modification work that will get done, and you'll see sustainment over the next couple of years double. So that will be a faster piece of the revenue.”
The company is about one-third complete in standing up repair base facilities now.
Lockheed also continues to promote a performance-based logistics contract for the F-35, the CFO noted.
“We provided a white paper, call it an unsolicited proposal, that basically commits to the 80% availability and it commits to the $25,000 per flight hour, which we think is the right number to get to,” he said Dec. 5.
The F-35 currently costs $35,000 a flight hour.
https://aviationweek.com/defense/lockheed-looks-more-f-35-development-work
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May 21, 2020 | International, Land
Army Braces For Post-COVID Cuts: Gen. Murray
“I've heard some people talk about [going] back to a BCA [Budget Control Act] level of funding,” Gen. Murray says, referring to the steep cuts also known as sequestration. “And I've heard some people say that it's even going to be worse than BCA.” By SYDNEY J. FREEDBERG JR.on May 20, 2020 at 1:11 PM WASHINGTON: Over the last two years, the Army has cut or cancelled more than 240 programs to free billions for its 34 top priorities, from hypersonic missiles to new rifles. Some of those 34 may have to die as the economy and budget reel from the COVID-19 pandemic, . “I start off with what Secretary Esper and Secretary McCarthy have said consistently, across DoD: three to five real growth is what we need,” said Gen. Mike Murray, chief of Army Futures Command. “Given what's going on in this country over the last two or three months.... my personal expectation is we're not going to see three to five percent growth. We'll be lucky to see a flat line.” LRPF: Long-Range Precision Fires. NGCV: Next-Generation Combat Vehicle. FVL: Future Vertical Lift. AMD: Air & Missile Defense. SL: Soldier Lethality. SOURCE: US Army. (Click to expand) While the Army is still working on its long-term spending plan for 2022-2026, the future topline is very much in doubt. “I've heard some people talk about [going] back to a BCA [Budget Control Act] level of funding,” Murray told an online AOC conference yesterday, referring to the steep cuts also known as sequestration. “And I've heard some people say that it's even going to be worse than BCA.” “I do think budgets are going to get tighter,” Murray said. “I do think that decisions are going to get harder.” Across its actual and projected budgets for 2020 through 2025, despite a slight drop in its topline, the Army has moved $40 billion from lower-priority programs to the 34 “signature programs.” Murray's Futures Command runs 31 of the 34, grouped in six portfolios: long-range rocket and cannon artillery is No. 1, followed by new armored vehicles, Future Vertical Lift aircraft, an upgraded battlefield network, air & missile defense, and soldier gear. Meanwhile, three most technologically demanding programs – including hypersonics and high-energy lasers – are handled by the independent Rapid Capabilities & Critical Technology Office. “We're prioritizing what I call the 31 plus 3,” Murray said. “We have fully funded those priorities in the program at the expense of a lot of other things.” The XM1299 Extended Range Cannon Artillery (ERCA) howitzer in an earlier test shot last year. But Army leaders have already warned that the Big Six will need more funding as they move from concept to prototype to mass production. Even a flat budget topline will be tight — and COVID makes flat the best-scare scenario. When and if the budget shrinks, Murray warned, “I do think we're going to have to make some tough decisions.” Hypothetically, he said, the choice may come down to something like, “Is it 31 plus three, or is it 24 plus two?” Considering the agonies the Army went through in its multiple rounds of “night court” cuts to find money for the 34 priority programs in the first place, cancelling any of them will be painful – but not impossible. Yes, the Army needs capabilities from each of its six modernization portfolios to work together in what's called Multi-Domain Operations against a future foe like Russia or China. Long-range precision firepower blasts holes in enemy defenses for aircraft, armor and infantry to advance; then they hunt out enemies too well-entrenched or mobile for artillery to destroy. Meanwhile air and missile defense protects the entire force, and the network passes intelligence and targeting data. But each of the Big Six includes multiple programs, and the Army has never expected all 34 to succeed. That's a crucial difference from the service's last major modernization drive, the Future Combat Systems cancelled in 2009, which depended on each of its 20 component technologies working as planned. Army slide showing the elements of the (later canceled) Future Combat System “Is there room for failures? Yes,” Murray told reporters at an Association of the US Army conference last year. “This concept does not count on any specific piece of capability.” That doesn't make cuts painless or easy, however. “Our priorities are our priorities for a reason,” Murray said yesterday. The Army's current weapons, from missiles to tanks to helicopters, largely entered service in the Reagan era. They've been much upgraded since, but there's only so much add-on armor, souped-up horsepower, and advanced electronics a 40-year chassis can take. The Army says it needs new weapons to take it into the next 40 years. “The kids running around on armored vehicles today are riding... fundamentally the same vehicles I rode around in as a company commander, way back when,” Murray said. “My now five-year-old granddaughter [lives] up the road at Fort Hood, Texas... I've got eight grandchildren, and out of all of them, I have absolutely no doubt that she is my infantry company commander wearing an Airborne Ranger tab at some point in the future. So that makes it personal for me.” https://breakingdefense.com/2020/05/army-braces-for-post-covid-cuts-gen-murray
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April 20, 2020 | International, Aerospace
Spirit AeroSystems bringing back some furloughed workers
WICHITA, Kan. — A major aircraft parts supplier in Kansas is expected to bring about 2,100 furloughed workers back to work next week as Boeing prepares to resume production of its commercial airplanes. Spirit AeroSystems also is planning resume work for more than 1,700 other workers in Wichita over the next three weeks, The Wichita Eagle reported. “As our customer, Boeing, begins to resume production, Spirit AeroSystems will work with our employees, customers and suppliers to begin a phased-in return to work for some furloughed employees," Spirit spokeswoman Keturah Austin said. She added that “this will be a slow process as we work to continue to support our customer's operations in a manner that is safe for all involved.” Boeing said Thursday it will restart production of its commercial airplanes next week in the Seattle area, putting about 27,000 people back to work at its facilities in the Seattle area after operations were suspended because of the COVID-19 pandemic. Boeing employees for the 737, 747, 767 and 777 airplanes will return as early as Monday with most returning to work by Tuesday, Boeing is Spirit AeroSystem's biggest customer, and the impact has rippled to its suppliers. About 2,100 workers, hourly and salaried, are scheduled to return to various production lines at the Spirit plant in Wichita on Monday, according to a union officials and numbers obtained by the newspaper. They'll be joined by another 200 workers on April 27; an additional 1,100 on April 29; and nearly 400 on May 4. Cornell Beard, president of Machinists District Lodge 70, said the returning union workers are still a fraction of the plant's full workforce, “but anything's better than nothing.” The coronavirus has exacerbated Boeing's crisis surrounding the 737 Max, which remains grounded after two deadly crashes. Boeing said Thursday its 737 program “”will resume working toward restarting production"" of the 737 MAX. Spirit produces about 70 percent of the 737 Max, including the fuselage. Contracts with Boeing for the Max represents more than half of Spirit's annual income. Future callbacks at Spirit will be largely dependent on Boeing's performance in getting the 737 Max back in the air, Beard said. “If another mistake is found, or another defect, or if we just encounter another problem, those projections will change again (and) we're going to be right back in this pickle,” Beard said. https://www.defensenews.com/industry/2020/04/17/spirit-aerosystems-bringing-back-some-furloughed-workers