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  • Raytheon laying off 20,000 amid commercial aviation slide

    October 29, 2020 | International, Aerospace

    Raytheon laying off 20,000 amid commercial aviation slide

    Joe Gould WASHINGTON ― Raytheon Technologies is cutting 15,000 staff and 4,000 contractor positions, largely at the company's Pratt & Whitney and Collins Aerospace divisions, due to decreased commercial aerospace sales from COVID-19 pandemic, CEO Greg Hayes said Tuesday on the company's earnings call. The Waltham, Mass., aerospace giant is the latest company to announce losses since the pandemic has sent commercial aerospace companies reeling, costing them tens of thousands of jobs and millions in lost profits. Hayes projected the market segment wouldn't get a sharp rebound, but instead see “a long, slow recovery,” over several years. “We don't expect commercial air traffic to return to 2019 levels, until at least 2023. And that's of course depending upon the timing of a widely distributed vaccine. In the near term, we expect a gradual recovery of commercial air traffic particularly given the recent spike in global cases [of coronavirus],” Hayes said. “As you know, we set aggressive targets in the first quarter to reduce costs by about $2 billion and to take actions to conserve about $4 billion in cash, making difficult but necessary actions to reduce headcount,” Hayes said. The ongoing personnel actions will reflect a 20 percent cut at both divisions, and include both temporary furloughs and a hiring freeze. In its merger with United Technologies in April, the company already planned to cut 1,000 jobs, mostly on its corporate side, Hayes said. The company is also reducing its infrastructure, which takes up 31 million square feet, by more than 20 percent ― beyond an earlier 10 percent goal for the merger. Hayes said that even after the pandemic subsides, it would continue to employ increased remote-work arrangements as part of a multiyear strategy to slash overhead. An announced aerospace-parts facility in western North Carolina is still in the works, as Hayes said the company would need the capacity when demand returns. “I think by the time this comes online in late 2023, we should see a kind of return to normalcy in commercial aerospace, and Pratt will be well positioned with a much lower cost, much more automated production facility,” he said. According to third-quarter numbers posted by Raytheon, Pratt & Whitney posted a $615 million loss in operating profit for the quarter versus a $520 million profit for the same period in 2019. Pratt's military sales rose 11 percent, driven in part by production of the F-35 joint strike fighter. Collins managed to post an operating profit of $526 million for the quarter, but the number marked a 58 percent drop over the prior year. Raytheon's commercial aftermarket business fell 51 percent at Pratt & Whitney and 52 percent at Collins Aerospace, while the company's military side was up. Both Raytheon's intelligence and space and missiles and defense segments offset some of the losses, as the company reported sales of $14.7 billion and an operating profit of $434 million for the quarter. Raytheon executives were upbeat on the defense business's backlog of more than $70 billion, and for the quarter, the segment posted $928 million in classified bookings. Correction: An earlier version of the story misstated the timing of the job cuts. They are ongoing, and most took place prior to Tuesday's call. https://www.defensenews.com/2020/10/27/raytheon-to-lay-off-20000-amid-commercial-aviation-slide/

  • In War, Chinese Shipyards Could Outpace US in Replacing Losses; Marine Commandant

    June 18, 2020 | International, Aerospace, Naval, Land

    In War, Chinese Shipyards Could Outpace US in Replacing Losses; Marine Commandant

    “Replacing ships lost in combat will be problematic," Marine Commandant Gen. David Berger writes in a forthcoming paper. "Our industrial base has shrunk while peer adversaries have expanded their shipbuilding capacity. In an extended conflict, the United States will be on the losing end of a production race.” By PAUL MCLEARYon June 17, 2020 at 4:44 PM WASHINGTON: The Commandant of the Marine Corps, Gen. David Berger, dismisses current Marine and Navy plans for amphibious ships as “obsolete,” and worries that in any conflict, China could replace damaged ships faster than the US in a draft operating concept obtained by Breaking Defense. The warnings are the latest in a campaign waged by the reform-minded Berger to overhaul how the Marine Corps trains and equips to meet the challenges of China and other advanced nations, while working more closely with the other armed services and allies around the globe. In the sharply-worded 22-page document, Berger rejects war plans anticipating a Cold War-style confrontation in which huge ships can creep close to shore free from the threat of precision-guided munitions being launched from batteries deep inland. He calls the current configuration of amphibious ships “the most obvious manifestation of this obsolete paradigm” in a draft document obtained by Breaking Defense. In an unsigned draft of the unreleased report, “Naval Campaigning: The 2020 Marine Corps Capstone Operating Concept,” Berger underlines the need for new thinking about how the Marine Corps and Navy will fight an advanced Chinese military that can control islands, coastlines, and vast swaths of the sea with aircraft carriers, a swelling blue ocean fleet and long-distance precision munitions. The old way of thinking “is also exemplified by our current amphibious warships and maritime prepositioning ships, which are large and built for deployment efficiency rather than warfighting effectiveness,” he writes. “These superb, multipurpose ships are extremely expensive—meaning we've never had the desired number.” Berger also raises significant concerns about the United States' ability to replace any combat losses, even in a short, sharp conflict. “Replacing ships lost in combat will be problematic, inasmuch as our industrial base has shrunk, while peer adversaries have expanded their shipbuilding capacity. In an extended conflict, the United States will be on the losing end of a production race—reversing the advantage we had in World War II when we last fought a peer competitor.” The stark admission comes as the Navy's shipyards struggle under the disruptions caused by COVID-19, leading the service to order an emergency call up over 1,600 Reservists to fill labor shortages to do repair work on aircraft carriers and submarines in a desperate effort to get them back out to sea as soon as possible. Berger takes care not to blame the Navy for building expensive, relatively slow amphibious ships to carry Marines across the globe. “These issues should not be construed as a criticism of our Navy partners who built the fleet—to include the types of amphibious warfare and maritime prepositioning ships the Marine Corps asked for—that was appropriate to the security era within the constraints of finite resources.” But that era is now over the Corps wants to build a more dynamic “inside force” of smaller ships that can operate within range of Chinese and Russian weapons and pack a potent offensive punch while offering more and smaller targets than the current amphibious fleet. But these small ships won't replace their bigger cousins — they'll come in addition to them, creating new issues for both Navy budgets and the limited number of shipbuilders who can produce hulls for the sea service. The ships will also need ports to call home. “One can think of basing forces and lots of smaller vessels in theater, but this raises the issue of where to put everything and doesn't seem to be a ready solution that replaces divestiture of large ships,” said Dakota Wood, senior research fellow for defense programs at The Heritage Foundation. In recent weeks, the Navy met with shipbuilders to talk about plans for a new class of logistics ship that can operate under fire and resupply Marines deep within the range of enemy precision weapons. The Next Generation Medium Logistics Ship would resupply both ships at sea, as well as small, ad hoc bases ashore. The ship fits within plans Berger has made to stand up several Marine Littoral Regiments designed to move fast and have their own integrated anti-air and possibly anti-ship weapons. The Corps and Navy are also looking to buy as many as 30 Light Amphibious Warships in coming years, which would be much smaller than the current amphibious ships. The draft document doesn't include any those specifics. But Berger has already done that work in previous statements and documents, where he outlined plans: to rethink the role that large amphibious ships play in future; divest of M1 Abrams tanks; cut artillery units; slash helicopter squadrons; and reassess the role F-35s might play in future operations. Berger has admitted he realizes he needs to undertake this transition within existing budgets, leading him to call for cutting tanks, helicopters, and even some end strength. But for the Navy, Wood said, “I think much of this will be added cost because it must maintain current capabilities (types of ships) while developing new capabilities. It does not have the luxury of getting rid of current before new replacements are ready.” A significant omission in all of these plans is the absence of a larger, coherent naval strategy. The 30-year shipbuilding plan, due to Congress in February, continues to be missing in action. A major Navy force structure review was rejected by Defense Secretary Mark Esper earlier this year. The force structure review, currently being taken apart by Deputy Defense Secretary David Norquist, is expected this fall. The Navy's plans are in such a fluid state that Vice Adm. Stuart Munsch, head of the service's Warfighting Development office, cited Chinese attention as a reason to decline to give a progress report in a call with reporters earlier this month. “I'm not going to divulge our intentions,” he said. “I'm very conscious that, if I say anything public, I'm an authoritative source and the Chinese will key on what I say, and likewise any kind of public-facing document that we put out as well.” Pressed to explain what the Navy's strategy for operating in a world with competing great powers looks like, Munsch said, “I'm not sure how you would see that keeping our intentions for warfighting classified is something you would want as an American citizen.” While Berger continues to push out papers and strategies for pushing the Marines into the future, the Navy, which will provide much of the lift he needs, is still at the drawing board. https://breakingdefense.com/2020/06/in-war-chinese-shipyards-can-outpace-us-in-replacing-losses

  • Defense Department study calls for cutting 2 of the US Navy’s aircraft carriers

    April 22, 2020 | International, Naval

    Defense Department study calls for cutting 2 of the US Navy’s aircraft carriers

    By: David B. Larter WASHINGTON – An internal Office of the Secretary of Defense assessment calls for the Navy to cut two aircraft carriers from its fleet, freeze the large surface combatant fleet of destroyers and cruisers around current levels and add dozens of unmanned or lightly manned ships to the inventory, according to documents obtained by Defense News. The study calls for a fleet of nine carriers, down from the current fleet of 11, and for 65 unmanned or lightly manned surface vessels. The study calls for a surface force of between 80 and 90 large surface combatants, and an increase in the number of small surface combatants – between 55 and 70, which is substantially more than the Navy currently operates. The assessment is part of an ongoing DoD-wide review of Navy force structure and seem to echo what Defense Secretary Mark Esper has been saying for months: the Defense Department wants to begin de-emphasizing aircraft carriers as the centerpiece of the Navy's force projection and put more emphasis on unmanned technologies that can be more easily sacrificed in a conflict and can achieve their missions more affordably. A DoD spokesperson declined to comment on the force structure assessment. "We will not comment on a DoD product that is pre-decisional,” said Navy Capt. Brook DeWalt. The Navy is also working on its own force structure assessment that is slated to be closely aligned with the Marine Corps' stated desire to become more closely integrated with the Navy. Cutting two aircraft carriers would permanently change the way the Navy approaches presence around the globe and force the service to rethink its model for projecting power across the globe, said Jerry Hendrix, a retired Navy captain and analyst with the Telemus Group. “The deployment models we set – and we're still keeping – were developed around 15 carriers so that would all fall apart,” Hendrix said, referring to standing carrier presence requirements in the Middle East and Asia-Pacific. “This would be reintroducing reality. A move like this would signal a new pattern for the Navy's deployments that moves away from presence and moves towards surge and exercise as a model for carrier employment.” A surge model would remove standing requirements for carriers and would mean that the regional combatant commanders would get carriers when they are available or when they are needed in an emergency. With 9 carriers, the Navy would have between six and seven available at any given time with one in its mid-life refueling and overhaul and one or two in significant maintenance periods. The net result would be significantly fewer carrier deployments in each calendar year. The assessment reducing the overall number of carriers also suggests that the OSD study didn't revamp the Carrier Air Wing to make it more relevant, Hendrix said. Esper has taken a keen interest in Navy force structure, telling Defense News in March that he had directed the Pentagon's Office of Cost Assessment and Program Evaluation (CAPE), along with the Navy, to conduct a series of war games and exercises in the coming months in order to figure out the way forward toward a lighter Navy, but said any major decisions will be based around the completion of a new joint war plan for the whole department, which the secretary said should be finished this summer. “I think once we go through this process with the future fleet — that'll really be the new foundation, the guiding post,” Esper told Defense News. “It'll give us the general direction we need to go, and I think that'll be a big game changer in terms of future fleet, for structure, for the Navy and Marine Corps team.” When it comes to carriers, Esper said he saw a lot of value in keeping carriers in the force structure, and that it wasn't going to be an all-or-nothing decision. “This discussion often comes down to a binary: Is it zero or 12?” Esper said. “First of all, I don't know. I think carriers are very important. I think they demonstrate American power, American prestige. They get people's attention. They are a great deterrent. They give us great capability.” Revamped Surface Fleet The OSD assessment also calls for essentially freezing the size of the large surface combatant fleet. There are about 90 cruisers and destroyers in the fleet: the study recommended retaining at least 80 but keeping about as many as the Navy currently operates at the high end. The Navy's small surface combatant program is essentially the 20 littoral combat ships in commission today, with another 15 under contract, as well as the 20 next-generation frigates, which would get to the minimum number in the assessment of 55 small combatants, with the additional 15 presumably being more frigates. The big change comes in the small unmanned or lightly manned surface combatants. In his interview with Defense News, Esper said the Navy needed to focus integrating those technologies into the fleet. “What we have to tease out is, what does that future fleet look like?” Esper said. “I think one of the ways you get there quickly is moving toward lightly manned [ships], which over time can be unmanned. “We can go with lightly manned ships, get them out there. You can build them so they're optionally manned and then, depending on the scenario or the technology, at some point in time they can go unmanned. “To me that's where we need to push. We need to push much more aggressively. That would allow us to get our numbers up quickly, and I believe that we can get to 355, if not higher, by 2030.” The Navy is currently developing a family of unmanned surface vessels that are intended to increase the offensive punch for less money, while increasing the number of targets the Chinese military would have to locate in a fight. That's a push that earned the endorsement of the Chief of Naval Operations Adm. Michael Gilday in comments late last year. “I know that the future fleet has to include a mix of unmanned,” Gilday said. “We can't continue to wrap $2 billion ships around 96 missile tubes in the numbers we need to fight in a distributed way, against a potential adversary that is producing capability and platforms at a very high rate of speed. We have to change the way we are thinking.” Aaron Mehta contributed to this report from Washington. https://www.defensenews.com/naval/2020/04/20/defense-department-study-calls-for-cutting-2-of-the-us-navys-aircraft-carriers/

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