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December 24, 2018 | International, Land

MPF Light Tank Profits Estimated ~$495M: Byron Callan


The Army's said it wants 504 of the MPF light tanks. But analyst Byron Callan is betting that either the Marine Corps or foreign buyers (or both) add another 106, bringing the total to 610 machines.

WASHINGTON: Tis the season to buy... tanks?

When you Google any kind of military hardware, odds are the autocomplete algorithm will suggest “....for sale.” Of course, pricing weapons systems isn't actually so straightforward. Whatever autocomplete may think, you can't actually buy a fighter jet or tank online, and trying to buy one anywhere as a private individual is a good path to prison. The Pentagon announces budget figures and contract values, but how do you figure out what a program will cost before that data's public?

One of our favorite defense industry analysts, Capital Alpha's poetically named Byron Callan, just came up with an estimate for the Mobile Protected Firepowerprogram. The Army just announced Monday that established armsmakers BAE Systems and General Dynamics will build competing prototypes of the new armored vehicle, with a final winner picked in 2022.

Now, MPF is effectively a light tank to accompany airborne troops and other infantry where the massive M1 Abrams cannot go. The Army's said it wants 504 of the vehicles, 14 per infantry brigade (both active-duty and National Guard) plus spares and training vehicles. But Callan is betting that either the Marine Corps or foreign buyers (or both) add another 106 tanks, bringing the total to 610 machines.

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  • Trump memo demands new fleet of Arctic icebreakers be ready by 2029

    June 11, 2020 | International, Naval, Security

    Trump memo demands new fleet of Arctic icebreakers be ready by 2029

    By: David B. Larter , Joe Gould , and Aaron Mehta WASHINGTON — U.S. President Trump ordered a review of the country's requirements for icebreaking capabilities in the Arctic and Antarctic regions, with the goal of getting a fleet in place by 2029, according to a memo released Tuesday. The memo was directed at the Defense, State, Commerce and Homeland Security departments, as well as the Office of Management and Budget. Much of it directs work already in progress — including building a fleet of at least three heavy icebreakers — but says the remaining ships not under contract should be reviewed for what can be done to maximize their utility in the frozen poles. The memo calls for “an assessment of expanded operational capabilities, with estimated associated costs, for both heavy and medium [polar security cutters] not yet contracted for, specifically including the maximum use of any such PSC with respect to its ability to support national security objectives.” That assessment is due in 60 days. Trump's directive to assess the current plan to field an Arctic maritime capability over the next decade is the latest sign that the administration is increasingly concerned about Russian and Chinese activity in the northern region, which could threaten America's interests in crucial chokepoints, such as the Greenland-Iceland-United Kingdom Gap. In April 2019, the U.S. Coast Guard announced it had signed a $746 million contract with VT Halter Marine of Pascagoula, Mississippi, for the detailed design and construction of its first polar security cutter — the first of the heavy icebreakers. And with the fiscal 2021 budget submission now before Congress, the Coast Guard says it can fully fund a second polar security cutter, according to a Congressional Research Service report. But the memo calls for a review of what the appropriate mix of ships should be for an Arctic fleet, suggesting that some changes to the three planned medium polar security cutters could be on the table. The memo asks for “use cases in the Arctic that span the full range of national and economic security missions (including the facilitation of resource exploration and exploitation and undersea cable laying and maintenance) that may be executed by a class of medium PSCs, as well as analysis of how these use cases differ with respect to the anticipated use of heavy PSCs for these same activities." “These use cases shall identify the optimal number and type of polar security icebreakers for ensuring a persistent presence in both the Arctic and, as appropriate, the Antarctic regions,” he memo continues. It also raises the possibility of nuclear-powered icebreakers, currently only operated by Russia, which would give the polar security cutter more persistent presence in the Arctic, since it would not need to refuel. The memo also calls for the study to identify two basing locations in the United States for its ice-hardened fleet, as well as two international locations. A study mandated by last year's National Defense Authorization Act mandated that the Defense Department study locations for a port in the Arctic. Furthermore, given that the Coast Guard has a lone operational heavy icebreaker, the 44-year-old Polar Star, the memo calls for the agencies to identify potential vessels that could be leased as a stop-gap measure. The 2029 date set by Trump corresponds with the year that both the Coast Guard's current ice breakers, the medium icebreaker Healy and the heavy icebreaker Polar Star are slated to be out of service. Alaska Republican Sen. Dan Sullivan, a forceful advocate on the Senate Armed Services Committee for directing more resources toward the Arctic, said the memo would “add weight” to ongoing efforts to build up America's presence in the Arctic. “Our adversaries are well ahead of the United States when it comes to Arctic infrastructure,” Sullivan said in a statement. “We have one heavy and one medium functioning Polar-class icebreakers, while Russia has more than 50. “I have fought for five years to bring Arctic issues to the forefront, including in the FY19 NDAA to authorize the building of six such icebreakers and my bill, the Strategic Arctic Naval Focus Act, to develop the capabilities and basing locations needed to support persistent presence in the Arctic.” While the president's memo appeared to catch regional observers by surprise, its content lines up with the administration's rhetoric on the region, said Erik Brattberg, director of the Europe Program at the Carnegie Endowment for International Peace. “The Trump administration has shown a greater interest in Arctic issues in recent years, driven especially by China's growing presence in the region,” Brattberg said. “While America's allies and partners in Northern Europe would welcome a greater U.S. presence in the Arctic, they are also wary of the region becoming increasingly marked by zero-sum, great power competition between the U.S., Russia and China.” Leasing icebreakers If the U.S. were to lease icebreakers for missions such as the annual breaking out of the National Science Foundation's research facility in Antarctica, McMurdo Station, three nations seem most likely to be able to fill the niche: Canada, Finland and Sweden. All three have rare excess icebreaker capacity, and all three would likely welcome the business. Finland, whose industry claims to have “designed about 80 percent of the world's icebreakers” and produced “about 60 percent” of the world's fleet, has hoped to break into the American market for years. The leasing opportunity could provide a foothold for Helsinki, although issues may arise with the U.S. Jones Act that may complicate the act of America outright buying a Finnish-made icebreaker. The law is meant to provide stability to the U.S. maritime industry by supporting domestic business. “The White House announcement will likely be music in the ears of Finland, which has been trying to sell or lease icebreakers to the U.S. for years,” Brattberg said. It is also possible that Sweden and Finland — two European Union, non-NATO states that have close relations — could try to create some form of joint offering for America's needs. The U.S. has leased icebreakers for the McMurdo mission from Sweden and Russia as late as 2012 — just prior to the souring of relations between the West and Russia over the latter's annexation of Crimea. But such an arrangement often limits how the vessel can be used under the terms of the lease. In 2017, a study by the National Academies of Science, Engineering, and Medicine mandated by Congress the year before, concluded that leasing icebreakers was not a viable path for the Coast Guard. “Chartering (an operating lease) is not a viable option,” the study found. “The availability of polar icebreakers on the open market is extremely limited. (The committee is aware of the sale of only one heavy icebreaker since 2010.) U.S. experience with chartering a polar icebreaker for the McMurdo resupply mission has been problematic on two prior charter attempts. “Chartering is workable only if the need is short term and mission specific. The committee notes that chartering may preclude USCG from performing its multiple missions.” In the Coast Guard's own 2019 environmental impact study for the Polar Security Cutter program, the service concluded that there were no vessels available to lease that would “substantially meet” the operational requirement for its icebreaking needs. Furthermore, any lease would need to be such that the Coast Guard provide the manning, training and equipping of the vessel — assuming all the costs — while still paying for the privilege of having it, making such an arrangement a financially dubious prospect. Frozen flashpoint The White House's decree comes in the context of a larger refocusing of national attention to the Arctic, as warming waters and melting ice open more time-efficient shipping routes and give nations greater access to natural resources that may have once been cost-prohibitive to reach. Russia in particular has made clear to the international community that it has core economic interests there and will defend them, even building icebreakers with cruise missiles and deck guns to patrol frozen waters. The country, with 7,000 miles of Arctic coast, sees the region as both a security liability and a key to its long-term economic success. President Vladimir Putin in 2017 put estimates of the mineral wealth in the region at $30 trillion. In a February hearing before the congressional Transportation and Maritime Security Subcommittee, the State Department's deputy assistant secretary for European and Eurasian affairs, Michael Murphy, testified that Russia's military buildup in the Arctic threatens the United States' and NATO's northern flank. Although Russia has cooperated on oil spill response and search-and-rescue missions, the U.S. views the country's moves with suspicion, especially in the establishment of an Arctic base and the installation of coastal missile batteries, early warning radars and air defenses, Murphy said in testimony. “The Russian military buildup in the Arctic has implications beyond its waters,” he said. “From a geostrategic perspective, the Arctic and the North Atlantic are inextricably linked. The Arctic provides Russian ships and submarines with access to a critical naval chokepoint: the GIUK gap that plays an outsized role in NATO's defense and deterrence strategy. Underwater trans-Atlantic cables also run through this area." “In short, NATO's northern flank must once again command the attention of the United States and its allies,” he added. Similar to its concerns for freedom of navigation in the South China Sea, which has become a flashpoint in Sino-U.S. relations, the U.S. is taking issue with Russia's attempt to force shippers to use Russian pilots and pay for use of the Northern Sea Route, which runs through Russia's exclusive economic zone. Russia has heavily invested in icebreakers to keep the Northern Sea Route open for as long as possible each year, and therefore the country views it as something of a toll road. “Russia's restrictions on the freedom of navigation in the Northern Sea Route are inconsistent with international law,” Murphy said.

  • Singapore’s Navy receives first of four new German-built submarines

    July 24, 2023 | International, Naval

    Singapore’s Navy receives first of four new German-built submarines

    The vessel had arrived in Singapore on July 8 after a voyage from the German port of Kiel that started in late May.

  • US Army pegs 2023 as tipping point for ending old weapons

    October 14, 2020 | International, Land, C4ISR

    US Army pegs 2023 as tipping point for ending old weapons

    Jen Judson WASHINGTON — The Army will see a significant shift in funding from its current fleet to new and modern capability designed to fight in multidomain operations in fiscal 2023, Army Secretary Ryan McCarthy told Defense News in an Oct. 8 interview. The service has conducted several rounds of “night court” reviews already, a deep dive across the Army's portfolios to determine whether money is in the right place to ensure modernization priorities are getting what they need to progress. In FY18 and FY19, the Army focused on the science and technology portfolio, but in FY20 ramped up the process finding north of $25 billion to apply to modernization priorities across the next five years. The FY21 and FY22 process was similar and still resulted in a substantial amount of funding that was redirected, according to McCarthy. “We're basically lining ourselves up for the '23 program where you will see a much more aggressive effort like you saw in FY20,” McCarthy said. “The choices are going to get bigger and tougher, but that's necessary” as modernized programs begin to be fielded, he said. “That will force us to make harder calls with legacy systems that will have to be forced to end their service life.” The FY22 night court review has wrapped up, and the number of canceled, reduced or delayed programs is less than in previous years. The Army still had to make some hard decisions, Lt. Gen. James Pasquarette, the Army G-8, told Defense News in a separate Oct. 8 interview, but there were fewer. “It did still result in dozens of reductions and eliminations, but smaller, much smaller than in the past.” In FY20, for example, the Army canceled, delayed or reduced 186 programs. In FY21 that number was roughly 80. “I feel better now than I did on the front end of this thing a year ago,” Pasquarette said, “and how we were going to make ends meet.” Pasquarette, who manages the night court process, said a year ago that after two deep dives he was concerned there wouldn't be enough low-hanging fruit to move over to fund modernization at the levels needed in the coming years. But since the Army has already found $37 billion total from the previous night courts and no major changes have been made to the strategy or what is being prioritized, less needs to move around because everything is in the right place, according to Pasquarette. Yet in FY23 some big programs will begin to go out to units such as the Maneuver-Short Range Air Defense System (M-SHORAD), next-generation squad weapons, enhanced night-vision goggles, the Extended Range Cannon Artillery (ERCA) systems, the Precision Strike Missile (PrSM) and ground-launched hypersonic weapons. “So in our fires community, massive changeover,” McCarthy said, “so units will be taking on new weapon systems, changing their task organizations, so you have to start divesting legacy weapon systems at a much greater rate of speed. ... Then as you get towards the back end of the [five-year defense plan] FYDP, in '25 and '26, here come the helicopters.” In FY23, McCarthy said, the Army will also make trades in order to invest in logistics to accommodate new weapons. Questions center on determining whether there are appropriate hangars, maintenance facilities and ranges that accommodate greater lethality and range for things like the Long-Range Precision Fires capabilities. More difficult decisions could be around the corner should the defense budget face cuts in the future. Some are projecting numbers as high as a 20 percent cut in military spending if there is a change in the administration. “If we see a reduced top line, I do wonder what would be the impact to some of the things that we put in place,” Lt. Gen. Thomas Horlander, the Army's comptroller, told Defense News earlier this month. “How will things like our modernization plan become pressurized? And so definitely a reduced top line will pressurize some of the programs and we'll be making some tough decisions.” Should the Army face cuts, McCarthy said, “we'll have a hard look at our readiness portfolio.” The Army has “been very blessed” to have 27 or 28 brigades at the highest levels of readiness, he added. “So you look at your readiness portfolio and are there ways to do it more efficiently? Do you need that many ready at any given point in time? Can you make an adjustment to that large bucket of funding in the readiness portfolio?” McCarthy asked. On the modernization side, the Army will have to continue to divest legacy platforms, according to McCarthy. “But you also need to take a very hard look” at priority programs to ensure they are correctly lined up, he said. As for quality of life, the Army “will not take much risk there,” McCarthy said. “We're very concerned that we spent over a decade at deficit spending on that side and we've made some pretty substantial moves. We're going to make some more here in the next week or two that you'll hear about ways that we're working to improve upon that.” The Army will do what it can to manage the balance sheet “as efficiently as possible,” McCarthy said. “If the cuts come, they will come. You have to face that down. The fiscal posture of the country has been challenged with the COVID-19 pandemic and we're going to do the best we can with the budgets we are granted.”

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