Textron Preps For Mass Production Of New Army Rifle

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  June 27, 2019 | International, Other Defence

  Lockheed braces for German blowback over cost of missile-defense pitch

  By: Sebastian Sprenger PARIS — Lockheed Martin executives are preparing for a stiff debate in Germany about the price tag of a next-generation anti-missile system formally proposed to Berlin just days ago. “I think the price will be a challenge, and we'll have to negotiate to come to an agreement,” Frank St. John, executive vice president of the company's Missiles and Fire Control business, told Defense News in an interview at the Paris Air Show last week. “But we're going to do better than the early expectations of the price.” That is a reference to a figure that surfaced during the spring following testimony of a senior German defense official before parliament. At the time, the cost estimate for the TLVS program, short for Taktisches Luftverteidigungssystem, was €8 billion (U.S. $9 billion). St. John declined to name the price ultimately included by Lockheed Martin and its German partner MBDA in their June 21 proposal. But he suggested the figure would lie significantly enough below the €8 million mark to be considered more than cosmetic. “I still anticipate a healthy debate and discussion about the pricing and the scope of the program through the negotiation process,” he said. Negotiations are expected to begin as soon as the German Defence Ministry has analyzed the proposal, described by German officials as being thousands of pages long. If the government and Lockheed Martin come to an agreement, the proposed investment would go before lawmakers for a decision, probably late this year or early next year. German plans for the TLVS program are based on the Medium Extended Air Defense System, conceived about 10 years ago as a replacement for the Patriot fleets of the United States, Germany and Italy. Soldiers had criticized the decades-old Patriot system as too cumbersome to deploy and maintain in the field. Germany has stuck with MEADS even after the United States and Italy dropped off, with officials in Berlin arguing the prospect of developing a truly novel defensive weapon was worth the gamble of going it alone. Defense officials in Germany have since added new requirements. For one, Berlin wants full control over all components, as opposed to buying an American weapon whose inner workings are shrouded in secrecy. In addition, the German government wants to be able to shoot down what officials call “advanced threats” (code for hypersonic missiles, such as those developed by Russia). According to St. John, Lockheed's latest TLVS proposal comes with the promise of intercepting such threats, though probably not the most sophisticated ones. “And then there is a provision in the contract and in the design of the system to add capability as time goes by and as the threat evolves,” he said. One of the sticking points for the proposed program — German access to secret performance data of the weapon's principal interceptor, the so-called MSE missile — appears to have been resolved, St. John said. Until late last year, Berlin was unhappy with U.S. Army restrictions placed on the information, which Germany considers crucial for adapting the system to its needs. Senior Pentagon leaders intervened to help resolve the logjam after Defense News reported on the issue in December 2018. “We believe that we have coordinated that with the Department of State and the appropriate folks at the Department of Defense, and that the German customer is going to have access to the data they need to evaluate the system,” St. John said. “They'll also have access to the data they need to recommend future modifications. We think that issue is resolved now.” At the same time, he added, another round of approvals will be needed from the U.S. government as contract negotiations with Germany progress. “We'll have to go back one more time ... to verify that everything is still in a good place." Patriot-maker Raytheon issued a statement Monday reiterating its readiness to snatch the missile-defense contract from arch enemy Lockheed Martin if the TLVS program goes south. The company especially played up the option of connecting an upgraded Patriot system to a lower-tier system, made by Rheinmetall, to defend against drones and artillery rounds. Ralph Acaba, president of Raytheon's Integrated Defense Systems business, said his company is increasingly banking on a layered air defense concept in which different systems — perhaps owned by different countries — take on various threat types. “No single nation, no single system can do it all when it comes to missile defense,” he told Defense News at the Paris Air Show. According to Joseph de Antona, vice president for business development and strategy in Acaba's division, Raytheon does not consider Lockheed's TLVS bid a threat to Patriot sales. “If a country makes a decision, it's our responsibility to honor and recognize that,” he said. At the same time, he added, Raytheon plans to continue to advise the German government on new threats and how to counter them. The company is “absolutely” still talking to the Berlin government to that effect, de Antona told Defense News. German lawmakers on the Defence and Budget committees on Wednesday approved roughly €120 million to upgrade the country's Patriot fleet to the newest configuration, known as “3-plus.” According to Raytheon, Berlin's investments to keep Patriot up to date had been lagging since the decision in favor of TLVS. Meanwhile, the proposed new system's funding profile has begun to take shape. Berlin wants to spend €3.36 billion on TLVS between 2021 and 2028, according to a draft government budget proposal meant for deliberation by lawmakers after the summer recess. That figure likely would be too low to finance Lockheed's entire program proposal. But the draft budget includes a provision permitting a transfer of funds from the envisioned €5.6 billion budget for a new heavy transport helicopter. The two contenders for that program are Boeing and Lockheed Martin. https://www.defensenews.com/digital-show-dailies/paris-air-show/2019/06/26/lockheed-braces-for-german-blowback-over-cost-of-missile-defense-pitch/

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  July 9, 2024 | International, C4ISR

  RADIUS Protocol Vulnerability Exposes Networks to MitM Attacks

  RADIUS protocol's BlastRADIUS vulnerability allows attackers to bypass integrity checks and authenticate unauthorized users.

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  April 24, 2020 | International, Aerospace

  What To Watch For As A&D Companies Plan Future With COVID-19

  Michael Bruno Companies have good quarters and bad quarters, but rarely does a whole industry sound like it just got sucker-punched. That's what the next few weeks will be like in the aerospace and defense sector, and for sure there will be headlines describing industrial carnage as the industry gasps for air and works to recover after COVID-19. The truth is the aerospace and defense (A&D) supply chain suddenly is far too large for what is needed, maybe by a quarter or a third of excess capacity. As a result, quick or methodical cutbacks in manufacturing and services are expected throughout the syndicates that make airliners, business jets and other aircraft. As public companies report their latest quarterly financial results in late April and May, they will have to address the year ahead and offer insight into their response plans. Unfortunately, business as usual prior to COVID-19 is not expected until 2022 or later, according to numerous analysts and advisors. And that is just too long to carry extra financial costs, which means all levels will feel pain. “The COVID-19 decline is a serious risk for commercial OEM plays—Boeing, Spirit AeroSystems, Allegheny Technologies, Hexcel, Howmet Aerospace, Triumph Group and Carpenter Technology,” Cowen analysts say. “Aftermarket ‘relative safe havens' Honeywell International, Heico and TransDigm Group also face stiff near-term headwinds, with more serious risks at General Electric.” If OEMs and their Tier 1 and 2 suppliers are already cutting their workforces, slashing executive salaries and suspending shareholder returns—as dozens have announced since the novel coronavirus began sweeping through the U.S. in March—then it is easy to imagine that much lower tiers with their even thinner margins could face existential reckonings. “People who didn't plan for it were unreasonably naive,” asserts Avitas consultant Adam Pilarski, a longtime expert who espoused a bearish view on commercial aviation long before the Boeing 737 MAX crisis started gumming up business models. “There is no magic potion here. You will have less production.” While Pilarski's comment may come across as harsh, it accurately describes the depth of the coming paradigm shift for commercial aviation. Yes, perhaps it was too much to have asked OEMs and suppliers to model for a 95% collapse in passenger air traffic and two-thirds of large commercial aircraft fleets getting parked—including brand-new deliveries. But practically no one seemed to imagine simultaneous cuts to new orders, standing backlogs and aftermarket revenue streams. Indeed, Pilarski was one of the few who envisioned an environment with much less than the traditional 5% annual growth in air traffic. That is now changing: Airbus has revealed narrowbody and widebody production rate cuts of about a third, and Boeing is expected to follow suit any day. According to Credit Suisse analysts, such sudden rate changes will have a materially negative impact on the supply chain because the effect is exponential. “[The supply chain] will need to cut production by much more as Airbus consumes its inventories—for instance, potentially going to rate 20 on the A320 for some months and ramping up again to 40,” the Credit Suisse analysts say. Boeing's inventory—including roughly 800 MAXs that are backed up with its customers and supplier Spirit AeroSystems and are waiting to join its own fleets—is worse. Still, it is not that simple to look at customers such as Airbus and Boeing and draw a direct line to suppliers to guess their fate. While the vast majority of publicly traded A&D companies have shelved the 2020 forecasts they offered just weeks before, almost no one has outlined new plans. For one thing, few suppliers had even received change orders as of early April, Ken Herbert of Canaccord Genuity says. Here are three factors to watch for in earnings reports to discern how the supply chains will change. First, how much U.S. government aid will companies receive? This is a significant variable, and as of mid-April, we still did not know how much even sector leader Boeing will receive (presuming it does). “Most suppliers we have spoken with are still waiting for more clarity on the exact terms available under the CARES Act,” says Herbert, who has deep ties in the A&D supply chain. Meanwhile, many public companies have been able to tap short-term financing or debt markets to boost liquidity—a testament to their prior investment grades. Second, the supply chain has experienced robust vetting and stress-testing over the past decade. Did it work? Record growth, record mergers and acquisitions, and record private equity involvement have dramatically consolidated industry (for better or worse). Yes, it meant elimination of countless companies, and some smaller survivors remain stressed by technology investments and meager working capital accounts. But top-tier companies have been working to eliminate chokepoints and shore up weak links in their supply chains for the last few years, ironically as they sought to raise rates. Finally, many companies became less susceptible one way or another, especially through revenue diversification (see chart). Take the new Raytheon Technologies, the first supplier to rival its OEM customers in annual sales. Manufacturers elbowed into the aftermarket; commercial providers and defense suppliers tapped into each other's markets; and venture capitalists and billionaire competitors entered into and prodded new technology advances that legacy industry had resisted funding, among other trends. Will this lead to resilience? Some think so. “In many ways, the supply chain is now more mature, diversified and well-positioned to handle this economic downturn versus in 2001 and 2008,” says Alex Krutz, managing director at Patriot Industrial Partners, an advisory firm focused on operations and supply chain. “A large number of suppliers over this last decade have taken significant steps to ensure their long-term success.” There are sure to be industrial casualties as A&D faces its greatest business falloff in history. We should mourn the loss of skilled workers and devoted people who are forced to exit the sector, but there are still new aircraft to build. And there will be supply chains to do it. https://aviationweek.com/aerospace/manufacturing-supply-chain/what-watch-ad-companies-plan-future-covid-19