April 1, 2020 | International, Aerospace

Lockheed Signals Change Is Coming With New CEO

Michael Bruno

Lockheed Martin Chairman, CEO and President Marillyn Hewson became the prime example of how to stumble into the corner office of the Pentagon's top contractor and still provide laudable business results. Now, as she hands off the reins to an enigmatic successor, Lockheed stakeholders hope the uncertainty ahead will be just as lucrative.

On March 16, the Bethesda, Maryland-based prime—the largest contractor to the U.S. Defense Department by annual sales—surprised many followers with the news that current Lockheed board member James “Jim” Taiclet, Jr. will become CEO and president on June 15, while Hewson becomes executive chairman.

Lockheed also promoted Frank St. John, current executive vice president of the company's Rotary and Mission Systems (RMS) division, to become chief operating officer (COO)—a role that Hewson technically held last, and briefly, before her January 2013 appointment as chief executive. Before that, the COO role was mostly held by Chris Kubasik prior to his downfall at Lockheed. Stephanie Hill, now senior vice president for enterprise business transformation, was appointed to succeed St. John as executive vice president for RMS. These appointments also are effective June 15.

Hewson is 66 years old and Taiclet is 59. The company, which does not have a retirement rule, had not announced a formal transition plan or successor process. Nevertheless, industry insiders were watching movements—such as St. John's rise and recent board appointments—and analysts said they assume the transition was planned before the ongoing COVID-19 crisis erupted.

While the announcement was a surprise, the timing was not—due to Hewson's age and the fact that Lockheed ended 2019 with a record $144 billion backlog of work and a stock price that has more than tripled under Hewson, including the recent COVID-19-related pullback. Still, many observers are intrigued by the selection.

“While Marillyn's retirement has been in the cards for a while, we were not expecting Lockheed to go outside the company for its new CEO,” say analysts at Vertical Research Partners. “Taiclet has an impressive pedigree based on his resume, but from an A&D perspective, he is an unknown quantity. . . . But with Marillyn sticking around as chairman, and a very experienced cohort of senior Lockheed managers, we are not expecting there to be any revolutionary change as a result of this appointment.”

Cowen analysts also noted that St. John's appointment as COO further bookends Taiclet with experienced Lockheed managers. St. John, 53, joined Lockheed more than 30 years ago and as COO is naturally positioned as a potential future CEO, analysts say.

Taiclet is currently chairman, president and CEO of American Tower, a real estate investment holding company and owner/operator of wireless and broadband communications networks, where he has held the executive reins since 2003. He joined that company in 2001 and, according to Lockheed, is credited with guiding American Tower's transformation from a U.S.-centric focus to a multinational business outlook. Analysts said he also was central in leading mergers and acquisitions as part of the company's expansion. American Tower announced an immediate replacement for Taiclet but said he will remain chairman and an advisor through June 14.

Taiclet previously served as president of Honeywell Aerospace Services and before that was vice president for engine services at the Pratt & Whitney division of United Technologies (UTC). He also worked as a consultant at McKinsey & Co., specializing in telecommunications and aerospace strategy and operations. He is a retired U.S. Air Force pilot and Persian Gulf War veteran.

Loren Thompson, a Lexington Institute consultant to Lockheed, says Hewson's selection of Taiclet seems calculated to continue her emphasis on tight financial management and good customer relations while positioning the leading prime for a changing demand environment.

“That environment will be characterized by two shifts from previous years,” Thompson writes. “First, the defense budget will enter a flat to declining period very different from the spending increases of the early Trump [administration] years. Second, the preference of military customers for nontraditional suppliers who think like entrepreneurial enterprises rather than government contractors will continue to grow.”

Hewson's selection of Taiclet also is telling because she has won the respect of many industry insiders, analysts and advisers. While unplanned, Hewson's tenure as CEO was deemed successful by most.

“Hewson's tenure is known for operational execution with such programs as the F-35, while having a successful oversight in maintaining key businesses—such as in the evolving area of space with wins such as Next-Gen OPIR and GPS IIIF,” say Jefferies analysts. Company sales grew at a 5% compound annual growth rate from $45.4 billion in 2013 to an expected $63.3 billion this year.

Taiclet's takeover sounds to many like more of the same—but different. “This is the first time Lockheed Martin has promoted someone who did not rise through the corporation to be president and CEO,” writes Capital Alpha Partners analyst Byron Callan. “We find it intriguing that he has a commercial background and wonder if that's not a different direction the company starts to explore in 2020-25.”

https://aviationweek.com/defense-space/supply-chain/lockheed-signals-change-coming-new-ceo

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December 6, 2019 | International, Land

FLIR Wins U.S. Army Heavyweight Robot Contract Worth Up to $109M
Arlington, Va., December 4, 2019 - FLIR Systems, Inc. (NASDAQ: FLIR) announced that its Kobra™ robot has been chosen for the United States (U.S.) Army's Common Robotic System-Heavy (CRS-H) program. The five-year production contract to build upwards of 350 unmanned ground vehicles (UGVs) is worth up to $109 million. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20191204005221/en/ The CRS-H program will give the Army a ‘program of record' to build and sustain a fleet of large UGVs for years to come. The CRS-H platform calls for a robot weighing up to 700 pounds. Army Explosive Ordnance Disposal (EOD) units will use the system to perform a range of missions, such as disarming vehicle-borne improvised explosive devices (VBIEDs), unexploded ordnance, or related heavy-duty tasks. A variety of sensors and payloads also can be added to the UGV to support other missions. “We are pleased to be selected for the U.S. Army's CRS-H program and deliver lifesaving robotic technology to our soldiers,” said Jim Cannon, president and CEO at FLIR. “This award exemplifies why we acquired Endeavor Robotics earlier this year — to capture strategic programs of record that enable us to integrate advanced solutions for the warfighter, give us the fuel to grow our business, and strengthen our position as a leader in unmanned systems.” Over several months and two rounds of testing, the Army compared the FLIR Kobra with other vendor systems. Entrants were evaluated on robot reliability, maneuverability, and usability, among other factors before Kobra was selected as the winner. Previously, in 2017 the Army chose FLIR's legacy business, Endeavor Robotics, as its medium-sized UGV provider through the Man Transportable Robotic System Increment II (MTRS Inc II) contract. FLIR is delivering its Centaur™ UGV under this on-going program. “Our CRS-H platform will give soldiers a powerful, extremely mobile, yet highly transportable UGV, ready to deploy at a moment's notice to keep them out of harm's way,” said David Ray, president of the Government and Defense Business Unit at FLIR. “This win is a testament to our employees who've designed such an advanced, multi-mission UGV. We look forward to working with the Army to get this robot into the field and deployed with our warfighters.” FLIR Kobra delivers unmatched strength, power, and payload support in an easy-to-operate robot package. Kobra has a lift capacity of 330 lbs. (150 kg.) and can stretch up to eleven-and-a-half feet to access hard-to-reach places. Ready for indoor and outdoor use, Kobra maintains mobility on tough terrain and can overcome obstacles such as jersey barriers. The award covers a five-year production period with shipments beginning in the second quarter of 2020. For more on FLIR Systems' Unmanned Ground Systems platforms, visit www.flir.com/UIS/UGS. About FLIR Systems, Inc. Founded in 1978, FLIR Systems is a world-leading industrial technology company focused on intelligent sensing solutions for defense, industrial, and commercial applications. FLIR Systems' vision is to be “The World's Sixth Sense,” creating technologies to help professionals make more informed decisions that save lives and livelihoods. For more information, please visit www.flir.com and follow @flir.
October 3, 2019 | International, Aerospace, Naval

Intel Agency Studies MQ-25 For Surveillance Role
Steve Trimble The U.S. Navy's MQ-25 is being developed as a carrier-based aerial refueler, but an intelligence agency is showing interest in the unmanned aircraft system for a maritime surveillance role. The National Geospatial-Intelligence Agency (NGA) has commissioned Boeing to study the integration requirements for installing the company's Multi-Mission Pod (MMP) on the MQ-25. Boeing developed the MMP using internal funding for the P-8A, a submarine hunter derived from the 737NG. It is designed to carry multiple payloads, including communication and electronic intelligence receivers. The NGA-sponsored study will evaluate how to use the MMP to introduce the agency's “maritime program” on the P-8A and MQ-25 fleets. The agency on Sept. 30 published a “justification and approval” notice for the study contract awarded to Boeing in May. Such notices are required to justify any contract awarded to a single contractor without a competition. In this case, the sole source award was justified because the MQ-25 is still early in the development phase, the NGA says, so Boeing is the only company that has access to the design data. The Navy awarded Boeing an $805 million in August 2018 to deliver four MQ-25 aircraft during the engineering and manufacturing development phase. The overall value of the deal has since risen to $944 million, of which $436 million, or 46.1%, has been obligated, according to the USASpending.gov procurement tracking site. Last month, Boeing completed the first flight of a company-funded test asset for the MQ-25 program at an airport in Illinois. The study also suggests the P-8A and MQ-25 fleet could be used to help replace the electronic intelligence capability once performed by the Lockheed EP-3E fleet. The Navy has said that the EP-3E will be replaced by a family of manned and unmanned aircraft, including the P-8A and the MQ-4C unmanned aircraft system. https://aviationweek.com/defense/intel-agency-studies-mq-25-surveillance-role
February 10, 2020 | International, Aerospace, Naval

Bell-Boeing Delivers First CMV-22B to Navy for COD Mission
By: Sam LaGrone The first of a new generation of carrier onboard delivery aircraft delivered to the Navy, the service announced on Friday. Manufacturer Bell-Boeing turned over a CMV-22B Osprey to the Navy in a ceremony at its Texas assembly facility after four years of design and production. “There is nothing more important than delivering capabilities to the fleet with speed,” James Geurts, assistant secretary of the Navy for research, development and acquisition, said in a statement. “I am proud how the program and industry team have leveraged non-traditional approaches such as using existing MV-22 testing data to shrink the time in the CMV-22 acquisition cycle.” The delivered aircraft is now assigned to Air Test and Evaluation Squadron (HX) 21. “The first operational squadron, Fleet Logistics Multi-Mission Squadron (VRM) 30, is scheduled to receive the aircraft this summer,” the Navy said. The first flight of the aircraft was in December, reported USNI News at the time. The delivery comes ahead of an aggressive testing and fielding schedule for the new COD that is anticipated to deploy next year in parallel with the first deployed squadron of F-35C Lighting II Joint Strike Fighter aboard USS Carl Vinson (CVN-70). Vinson is currently in a drydock availability undergoing upgrades to field the F-35Cs. The CMV-22B will be key to the deployment as the new COD will be able to carry the engine power module for the F-35s, a key logistics requirement for any JSF deployment. The new Ospreys are based on the Marines existing MV-22B with key differences. “The CMV-22B will be capable of transporting up to 6,000 pounds of cargo and/or personnel over a 1,150 nautical mile range. This expanded range is due to the addition of two new 60-gallon tanks installed in the wing for an additional 120 gallons of fuel and the forward sponson tanks were redesigned for additional capacity,” read a statement from the Navy. “The CMV-22B variant has a beyond-line-of-sight high-frequency radio, a public address system for passengers, and an improved lighting system for cargo loading.” The tilt-rotor will replace the 1960s era C-2A Greyhounds used for the COD mission. The Navy is getting 39 Ospreys as part of a $4.2-billion contract modification with Bell-Boeing the Pentagon announced in July 2018. https://news.usni.org/2020/02/08/bell-boeing-delivers-first-cmv-22b-to-navy-for-cod-mission

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