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  April 23, 2020 | International, Aerospace

  Lockheed looks to sell additional F-16s to customers in Africa, Asia and South America

  By: Valerie Insinna WASHINGTON — Lockheed Martin anticipates another wave of international F-16 sales, with countries from Africa, South America and Southeast Asia among those interested in purchasing the jet, the company's chief financial officer said Tuesday. “I think this is a good fourth-generation aircraft for those customers that can't afford the F-35 or, frankly, can't at this time buy the F-35,” Lockheed CFO Kenneth Possenriede told investors during an April 21 earnings call. “It might be a good intermediary step for customers to go from the F-16 to F-35. So we see it frankly as complementary and not competing against themselves.” Unlike the F-35 program, which is seeing disruption within its supply chain that could delay future deliveries, the F-16 production line has experienced little impact as a result of the coronavirus pandemic, Possenriede said. The company moved production of the F-16 production line from Fort Worth, Texas, to Greenville, South Carolina, in 2019 to accommodate production of 16 Block 70 aircraft for Bahrain. Since Bahrain's order in 2018, Lockheed has garnered contracts for eight F-16s for Bulgaria, 14 aircraft for Slovakia, and is working with the U.S. government on a sale of 66 jets for Taiwan. “We also have a couple of orders for F-16 that we're working to try to shape,” Possenriede said. “There is an African country that is interested in F-16, so we're hopeful that will happen. [There is also a] South American country, and then there are some Southeast Asian countries that are interested in F-16 as well.” Possenriede didn't detail which nations were considering purchases of the F-16, as defense companies typically wait until international militaries publicly declare their interest in a sale before talking about specific customers. Richard Aboulafia, an aerospace analyst with the Teal Group, said there's a “pretty good chance” that some of those orders materialize. “Lockheed was doing a disservice by forgetting the F-16 program for so many years. They had this idea that the future was F-35 and nothing but F-35, ignoring the part of the market that is not prepared to buy the F-35 price tag,” he said. “It's actually a really good franchise with a really solid core market. It seems ill-advised to neglect it.” If a new customer in Africa is looking to buy F-16s, it could be Botswana, which has indicated an interest in buying fighter jets, Aboulafia said. Lockheed has already sold F-16s to Morocco and Egypt, and the U.S. State Department in 2019 cleared Morocco for new F-16s and upgrades. In South America, Lockheed has been trying to sell F-16s to Argentina for years, but Aboulafia believes a second order for Chile is a more likely prospect. In Southeast Asia, a sale to Indonesia “would seem to be one of the most likely possibilities,” he added. https://www.defensenews.com/global/mideast-africa/2020/04/22/lockheed-looking-to-sell-additional-f-16s-to-customers-in-africa-south-america/

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  January 27, 2020 | International, Aerospace

  British Defence Ministry reveals why a drone program now costs $427M extra

  By: Sebastian Sprenger Correction: A previous version of this story misidentified the cost increase to Britain's Protector acquisition program. The program is said to now cost an extra £325 million, with £187 million of that attributed to a delivery delay. LONDON — The British Defence Ministry's top civilian has identified in a letter to lawmakers the reasons why a drone acquisition program has experienced a near 40 percent hike in costs. The Ministry of Defence decided to delay by two years the delivery of 16 General Atomic Protector RG Mk1 drones to replace the Royal Air Force's MQ-9 Reaper fleet, the letter to Parliament's Public Accounts Committee said. Stephen Lovegrove, the ministry's permanent secretary, cited that decision as the main reason for the £325 million (U.S. $427 million) cost increase to the program, as £187 million of that could be attributed to the delay. “The cost growth and time delay to the program imposed in July 2017 were outside of program tolerances but were the result of the need to ensure the affordability of the overall defence program,” Lovegrove wrote in his letter. The MoD is currently in negotiations with the U.S. over a deal to build the first three of the 16 Protectors scheduled to be purchased for the RAF. The final number of vehicles on order could eventually expand beyond 16 — subject to the MoD's fragile finances in the coming years unless defense gets a sizable increase in the Conservative government's next budget round due later this year. The letter was sent Nov. 5 but has only recently been made public. Lovegrove detailed further causes of the cost increase rise in the drone program, which was expected to cost £816 million when it was approved by the MoD in 2016. Aside from the increased costs caused by the delay, the letter said that the fall in the value of the pound against the dollar accounted for £50.8 million of the price rise, and a new primary sensor cost another £64 million. Other unspecified program costs accounted for a further £23 million. The pound has firmed up against the dollar a little since the Conservative Party won the general election in December, which may lessen the impact of increased costs for the moment. The new primary sensor investment involves provision of an improved electro-optical and infrared sensor. The letter said the investment was to avoid future obsolescence issues. Consideration is still being given to the purchase of what is known as a “due regard air-to-air radar” designed for vital detect-and-avoid duties on the platform. Protector, which is the British name for its version of the new General Atomics MQ-9B SkyGuardian, is scheduled to achieve initial operating capability in November 2023, the letter read. The vehicle will replace the current fleet of MQ-9 Reapers, which the RAF has operated almost constantly during the last few years over Afghanistan and the greater Middle East. Lovegrove said the MoD had compared Protector with other options to meet the requirement but the General Atomics platform remained the best value for money. “A comparison was made between: developing a new remotely piloted aircraft system capability (either collaboratively or nationally); procuring the current Reaper Blk 5 (as used by the US Air Force and others); and procuring Protector,” he said. “This concluded that procuring Protector represented best value for money, as its higher performance meant that the operational task could be delivered by procuring fewer air vehicles. The 2-year delay and resultant cost increase have not undermined this value for money case ... it remains affordable despite the cost growth,” the permanent secretary added. Lovegrove said the biggest problem for the Protector program was not the platform itself but the availability of trained crew in the run-up to initial operating capability. “The most significant risk to the Protector program is the RAF's ability to generate and sustain the volume of trained personnel necessary to assure IOC in Nov 2023. The Protector work force builds on the current Reaper force; training and retaining sufficient remotely piloted aircraft system crews has historically proved challenging and is being closely monitored,” the letter said. The Protector is expected to fly longer and hit harder than the Reaper. The UAV will also fly in nonsegregated airspace in places like the U.K . in September, the MoD and General Atomics signed a significant deal to complete the test and evaluation activities required to fly the system in civil airspace. The first test and evaluation aircraft is due to be delivered next year subject to the successful completion of the production contract. An initial production deal is currently in negotiation, with aiming of inking a deal in the next few months. In a first for the system, the SkyGuardian version of the medium-altitude, long-endurance drone flew across the Atlantic Ocean in July from Grand Forks, North Dakota, to RAF Fairford in England. The flight covered 3,760 nautical miles in 24 hours and 2 minutes. https://www.defensenews.com/unmanned/2020/01/24/british-defence-ministry-reveals-why-a-drone-program-now-costs-245m-extra/

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  May 7, 2020 | International, C4ISR

  Pentagon reports boost in predatory foreign investment to US tech firms amid pandemic

  Valerie Insinna Since the coronavirus pandemic began, the Defense Department has seen a small increase in predatory foreign investment in U.S. companies, such as small drone manufacturers, the Pentagon's head of industrial policy said Wednesday. “In general terms, there has been of an uptick, but it's always been pretty high,” Jennifer Santos, deputy assistant secretary of defense for industrial policy, said Wednesday during the C4ISRNET Conference. The Pentagon has become increasingly concerned about what it calls “adversarial capital” — a tactic whereby foreign nations, particularly China, make investments into U.S. technology startups that are part of the defense market. Once those countries make their investments, they could own or have access to unique American technologies, while the Pentagon loses its own access due to security considerations. With the U.S. economy increasingly fragile due to COVID-19, the Defense Department must be vigilant about potential risk to American companies, Santos said. “We simply cannot afford during this period of economic uncertainty the loss of American know-how in critical tech.” But Santos stopped short of saying the uptick in predatory foreign investment was a direct result of the pandemic, instead noting that the Defense Department recently expanded its existing tools to monitor adversarial capital. One tool, known as the Committee on Foreign Investment in the United States, or CFIUS, allows the government to block a foreign investment attempt on national security grounds. The jurisdiction of that tool increased in February, so the Defense Department has seen a boost in the number of cases it is tracking, Santos said. “Twenty percent of our [gross domestic product] is foreign direct investment, which is fantastic. But there's some areas where there are threats associated with some of that capital, and we want to protect those industry partners,” she said. Over the past eight weeks, the Pentagon hosted 25 teleconferences with industry to help guide companies that might be experiencing financial distress caused by COVID-19. Some of that outreach, such as a webinar held last week, centered around avoiding adversarial capital, Santos said. While her comments on adversarial capital did not center specifically on the small drone industry, she noted that the pandemic has made supply chain vulnerabilities in that sector more apparent to the department. “The market for UAS [unmanned aerial systems] in the United States is dominated primarily by foreign companies, especially Chinese companies,” she said, adding that Chinese firms hold 97 percent of the small UAS market, with about 75 percent of sales in the U.S. commercial market coming from Chinese drone maker DJI. “U.S. firms have struggled to compete in this drone area,” she said. "Even commercial drones manufactured in the United States often use components made in China. We don't know what the exact effects of COVID will be on this small UAS sector, but I know one thing: We will emerge from this stronger.” Brent Ingraham, the Pentagon's unmanned systems technical director, pointed to the American Drone Security Act currently under proposal by Congress. If passed, the legislation would apply the same security restrictions on UAS used by the Defense Department to the rest of the federal government, which would secure industrial opportunities for U.S. vendors that have a trusted supply chain, he said. As the Defense Department looks to expand its base of small UAS manufacturers, one of the military's legacy providers offered a word of caution. "We as a community are all in favor in faster, cheaper, better, but we need to have an exercise in caution when you do that,” said Gorik Hossepian, AeroVironment's vice president of UAS product line management. “Our past is full of examples of when we do those kinds of things, we tend to sacrifice one versus the other. We need to not lose sight that what we need is a balance.” "At the end of the day, the war fighter at the edge of the battlefield ... needs to have a product that is trusted,” he said. “Members of some of our community, to some extent, have that as some of our DNA — the DNA of working with the end user to solve those problems.” https://www.c4isrnet.com/unmanned/2020/05/06/pentagon-reports-boost-in-predatory-foreign-investment-to-us-tech-firms-since-pandemic-start/