Lockheed Martin lifts 2024 sales target on fighter jet, missile demand

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  October 21, 2018 | International, Aerospace, Naval, Land, C4ISR, Security

  CEO Q&A: L3’s Chris Kubasik and Harris’s Bill Brown

  BY MARCUS WEISGERBER Soon after the companies announced plans to form the world's 7th-largest defense firm, the CEOs rang up for a joint interview. On Sunday, just after L3 Technologies and Harris Corp. announced their planned merger next year, I chatted with CEOs Chris Kubasik and Bill Brown about their plans to form L3 Harris Technologies, which would be the world's 7th-largest defense firm. Here are some excerpts. Q. How did this come together? Brown: Chris and I have known each other for a number of years here, and a lot of it started more socially, not from a business perspective. We work in the same space as complimentary businesses, complementary portfolios. Same [main] customer. You know we realized, given where we stack up in the defence hierarchy, this would be a great potential combination. We've been discussing it through the balance of this calendar year. [It] really picked up steam in the summer and were able to bring it forward here towards middle October. Q. Why a merger rather than an acquisition by one partner? Kubasik: Both companies are quite strong, and we're both on an upswing, and we looked at all the different stakeholders from the customers, the shareholders and the employees. And in our relative size and market value, a merger vehicle seems to be the absolute right way to go here. True partnership, as you've probably seen. 50/50 board. Bill and I have our leadership laid out clearly. It's absolutely the right way to do this. We're quite proud that we're able to pull it off. And I think it's the best way to serve all the stakeholders. Q. Bill is going to be CEO until a transition to Chris in a couple of years. How will that work? And what happens to L3's New York office if the headquarters moves to Florida? Brown: The combination in bringing these two great companies together is going to take a lot of work. So Chris and I will partner on this, in leading the company [and] clearly doing a lot of the integration. We're going to chair the integration committee together. I'll have responsibility for the enterprise functions, and Chris will keep an eye on the ball in what we do operationally in the business segments making sure that through to the integration we don't miss a beat in our growth agenda, meeting expectations of customers, delivering on programs. It's going to be a shared partnership in bringing the companies together. Kubasik: On a combined basis, we have several thousand employees in the state of New York, a lot in Rochester, of course Long Island and the surrounding areas. We got to do to what we believe is best for the business. When you look at the Space Coast of Florida, the 7,000 or so employees and infrastructure in the Melbourne area, it's an easy decision. We'll be transitioning from the headquarters from New York and taking the best of the best and moving to Florida. At some point the Manhattan office will either be significantly scaled down or ultimately closed. Q. Will the combined company divest or combine overlapping sectors? Bill Brown: Very high and complimentary portfolios. So we see very, very, very little overlap. Q. L3 has been on an acquisition spree in recent years. Should we expect more, perhaps in the maritime sphere? Kubasik: Job one is going to be the integration for the first couple years, so there will be very, very few, if any, acquisitions the first couple of years. They would have to be a once-in-a-lifetime opportunity. We're going to focus first and foremost on integrating this company. Once we get this integrated, which is a three-year program, we'll update and modify the strategy as appropriate. Correction: An earlier version of this article misstated the proposed merged company's rank by revenue among global defense firms. This Q&A is part of the weekly Global Business Brief newsletter by Marcus Weisgerber. Find the rest of this week's issue here,and subscribe to get it in your inbox, here. https://www.defenseone.com/business/2018/10/q-ceos-chris-kubasik-and-bill-brown-l3-technologies-and-harris-corps/152135

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  March 11, 2024 | International, Land

  Honeywell will seek 'relief' on Bombardier engine pricing case at Canada's top court

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  August 10, 2020 | International, Land

  Government watchdog warns of cost and technical risk for next-gen combat vehicle effort

  By: Jen Judson WASHINGTON — The Government Accountability Office is warning the Army its approach to cost estimates and technical development for its Optionally Manned Fighting Vehicle program is risky and should be amended, according to an August 6 report. The Army has already struggled to get the OMFV program, intended to replace the Bradley Fighting Vehicle, off the ground, canceling its previous solicitation to compete after receiving just one bid from General Dynamics Land Systems last fall. And GAO, in its report, is concerned that the service's newest attempt to get after delivering an OMFV comes with risk because the program documentation “does not clearly communicate the uncertainty associated with projected costs” and limits the program's “ability to gather the knowledge to effectively mitigate risk associated with system design maturity.” For one, the Army has come up with a singular cost estimate for the life-cycle of the program rather than a range of potential costs that takes uncertainty into account, according to the report. The OMFV program cost estimate, the report notes, is roughly $46 billion in fiscal 2019 dollars. “Our past work has determined that a point estimate alone is insufficient for managers to make informed decisions about the cost of a program,” the GAO writes. “For informed decisions, the cost estimate must reflect a degree of uncertainty, typically achieved through an uncertainty analysis, so that level of confidence can be given about the estimate.” For example, the OMFV program will be optionally manned, “which adds complexity and unknowns to the design as no vehicle like this currently exists in the Army's ground vehicle fleet,” the GAO said. “But the uncertainty surrounding this complex design is not reflected in the point estimate.” And because of this “decision makers are left making choices without a clear understanding of the impact on costs and may not be able to accurately budget for the program,” the report states. The constrained development schedule for OMFV is also a cause for concern as it inevitably drives risk into the program. GAO notes the Army had laid out, in its previous solicitation, a plan to design and demonstrate an OMFV prototype in three years and three months, but has since spread the schedule out a bit more with the relaunch of the program and now plans to complete system development and prototype demonstration in “close to” five years. The new solicitation also lays out a five-phase effort that will allow the Army to reassess the process at certain checkpoints throughout development, according to the report. The GAO also found promise in the Army's plan to use a modular open systems architecture to incorporate incremental upgrades. In the Army's previous plan for OMFV it also planned to use a mix of existing and new technologies but, the GAO report states, the program did not include plans to complete an independent technology readiness assessment until it was approaching a production decision. According to the Office of the Under Secretary for Defense for Acquisition and Sustainment, in a report to Congress, “the least mature technology for OMFV had only been demonstrated at the component level in a laboratory environment,” the report notes, adding that the level of technology maturity would require “significant” additional development before it could be added to a weapon system. “The Army is maturing, or has plans to mature, individual technologies to a level lower than the threshold recommended by leading practices before beginning system development,” the report says. “This creates a danger of limited insight into key technology risks.” Critical technologies, GAO states, should be demonstrated in “an operational or realistic environment — not simply in a relevant environment — prior to their incorporation into a system design to ensure that they work as intended for the end-user.” The GAO adds, based on past experience, that without proving out technology at that level, the Army risks the possibility that new capabilities won't work as planned and will require further maturation, which results in schedule slips and rising costs. In the previous competition, OMFV didn't hold a systems engineering design review before beginning system development and the Army canceled the solicitation “in part due to the conclusion that contractors could not complete a system design that met requirements within the given schedule,” the report notes, which “illustrates the risk of beginning system development without conducting a systems engineering design review.” Program officials told the GAO that the program office and requirements developers “may have misjudged the ability of contractors to integrate the desired technology within the given schedule.” The GAO recommends the Army secretary direct the OMFV program office to include a range of cost estimates to support a range of possible outcomes as well as conduct systems engineering reviews at key decision points. The report also lays out similar findings on the Mobile Protected Firepower program, which is heading into competitive prototype testing this summer. General Dynamics Land Systems and BAE Systems are competing to build the new light tank for Army infantry. The GAO recommended the Army should ensure the MPF program also include a range of cost estimates that account for uncertainty. https://www.defensenews.com/land/2020/08/06/government-watchdog-warns-of-cost-and-technical-risk-for-next-gen-combat-vehicle-effort/