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April 24, 2018 | International, Aerospace, Land, C4ISR

Turkey provides tax breaks, loans to attract investment in local defense programs


ANKARA, Turkey — In an effort to boost indigenous defense programs, Turkey is providing incentives, which include generous tax breaks, tax reductions and exemptions from import duties.

The incentives include additional levies and soft loans.

In just the first two months of 2018, the government incorporated 13 defense investment projects submitted by 12 companies into its incentives program. These investments are worth $350 million.

The largest investment program benefiting from the incentives during the January/February time frame was Roketsan’s new production line. The state-controlled missile maker’s investment plan is worth $217 million.

Military electronics specialist Aselsan, Turkey’s largest defense company, has won incentives support for its new $35 million investment in electronic systems and new $40 million investment in aerial and missile systems.

Official figures show a boom in private defense investment, too. According to the Ministry of Economy, $1.9 billion of defense investment by private companies will be subsidized by government incentives this year.

These investment plans include a total of $220 million for armored vehicles, a laser gun and unmanned land vehicles; and $125 million in diesel tank engines by armored vehicle producer BMC, a Turkish-Qatari private joint venture.

Private firm Most Makina will receive government incentives for its planned $385 million investment in steel equipment for defense systems.

Turkish Aerospace Industries, or TAI, will invest $1.2 billion in its TF-X program, an ambitious plan for the design, development and production of Turkey’s first indigenous fighter jet. TAI is developing the TF-X with BAE Systems.

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  • The defense industry remains in dire straits. Congress must pass another relief package.

    August 19, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

    The defense industry remains in dire straits. Congress must pass another relief package.

    By: Mackenzie Eaglen  House Armed Services Committee Chairman Adam Smith, D-Wash., and Sen. Dick Durbin, D-Ill., ranking member of the Senate Appropriations Subcommittee on Defense, recently wrote in an op-ed on Defense News that Congress “cannot panic and hand out blank checks to defense contractors.” They were concerned with a “lack of detail” in the Pentagon’s stimulus funding request. Pentagon officials have responded with said requested detail. It’s clear the defense, shipbuilding and aerospace industrial base — an “essential” workforce as designated by the Department of Homeland Security — is indeed in need of help. These critical firms need financial support to the tune of about $11 billion to support more than 100,000 direct jobs. Nor should the military have to take it out of hide, as suggested by some. According to the Defense Department, the data from industry is showing 30-40 percent inefficiency across the defense industrial base, but certain sectors like shipbuilding are experiencing 50-60 percent inefficiency. At shipyards, for example, blue-collar worker attendance ranges from just half to 70 percent. Other short-term sectors at risk include textile manufacturers, body armor suppliers and small business electronics suppliers, who feed guidance systems and wiring harnesses in Army vehicles and aircraft. A sampling of specific reasons for inefficiency include: Confirmed cases or quarantines Government facility closure/standdown test delays Telework Closures due to travel restrictions Logistic implications caused by travel restrictions requiring commercial freight Availability of parts and supplies High absentee rates Local and state lockdowns Foreign government lockdowns Supplier shutdowns Pentagon leaders are worried about the near term, but also permanent damage. Officials are “concerned with a potential loss of critical labor skills,” such as welders. Shipbuilders are in dire straits given the “significant touch labor” required to build a ship and “greater facility impact from social distancing.” The potential shutdown of one of the “big seven” private shipyards is a real risk right now. The Virginia-class attack submarine is currently experiencing delays in its production line, as Newport News Shipbuilding has “prioritized its available workforce on supporting maintenance for in-service submarines and aircraft carriers.” If electricians, engineers and solderers shift from the Virginia assembly line elsewhere, the work is slowed and “the opportunity for the cost to come down on each successive submarine hull is diminished.” Congress has repeatedly supported this program above recent budget requests and presumably cares greatly about this unanticipated cost overrun through no fault of nor negligence by the contractor. The Air Force is experiencing major program delays due to the impact on the aerospace industrial base — both primes and suppliers. Programs impacted include the F-35 Joint Strike Fighter and KC-46 tanker due to facility shutdowns in the U.S., England, Italy and Japan. These two aircraft programs will likely miss major milestones — therefore delaying the time when they become available to the war fighter. Aircraft engine-maker GE Aviation is a “fragility concern” across the armed forces. For the Air Force, the Joint Air-to-Surface Standoff Missile and the Advanced Medium-Range Air-to-Air Missile are “being impacted by reduced workforce and facility availability.” The Small Diameter Bomb motor supplier is being pulled to support the Federal Emergency Management Agency with motors for hospital beds. Aerospace firms with commercial work are reporting problems given the massive decline in commercial demand, which affects defense. Contrary to the assertion that the Pentagon doesn’t need more stimulus money to support contractors, the services are “concerned about large commercial companies, like Boeing and GE that are critical to our defense industrial base facing negative cash flow and other associated impacts from COVID-19.” Small businesses and subcontractors are particularly vulnerable as they have far less slack to respond to crises. Many live contract to contract, as indicated by a 2018 Pentagon report. According to the Defense Department, “small businesses … have been the hit the hardest due to unfamiliarity that [the] defense industrial base is exempt from most local shelter-in-place orders.” The Pentagon’s request for more stimulus money is not a case of pork for primes. This industry has “a notably high rate of subcontracted work flow and systems with high component volumes, driving job loss directly to program partners and the supply chain.” So while virtually all of the Pentagon’s missiles are built by two primes, 98 percent of the subcontractors making parts for U.S. munitions are the only source for these items. If these unique businesses fail, there may not be any replacements. A study last year by George Mason University found “contractor workforce challenges have a direct impact on the government’s ability to ramp up quickly.” Budget fluctuations are particularly hard on small companies that “do not have large enough portfolios to shift people between projects. The contractor workforce loses skills or move on.” These firms operate with “thin margins and low lines of credit.” The additional costs to respond to COVID-19 were not part of the original contracts the companies are currently performing, and warrant stimulus money. Hopefully, Chairman Smith and Sen. Durbin now agree.

  • Lockheed Martin Secures Automated Test Equipment Contract

    September 4, 2018 | International, Naval

    Lockheed Martin Secures Automated Test Equipment Contract

    ORLANDO, Fla., Sept. 4, 2018 /PRNewswire/ -- The U.S. Navy awarded Lockheed Martin (NYSE: LMT) a seven-year contract worth up to more than $500 million to build and deliver more than 200+ electronic Consolidated Automated Support Systems (eCASS) to maximize aircraft readiness. The previous Navy CASS contract awarded in 2000 to Lockheed Martin was worth $287 million. According to Navy Naval Air Systems Command, eCASS saves the Navy money by averting the repair of avionics at the next level of maintenance or sending the parts back to the original equipment manufacturer. Sailors use eCASS to troubleshoot and repair aircraft electronics ashore and at sea, allowing them to return aircraft such as the F/A-18 and E-2D to operational status quickly and efficiently. "Lockheed Martin's partnership with the Navy on Automated Test Equipment began more than 30 years ago with the production and sustainment of the legacy CASS family of products," said Amy Gowder, general manager and vice president, Lockheed Martin Training and Logistics Solutions. "Our technology is always evolving and now can support F-35 advanced avionics and other fifth-generation platforms. Our goal remains the same – keep aircraft mission ready at the most affordable lifecycle cost now and for the future." Since 2010, Lockheed Martin has delivered more than 80 eCASS stations to the Navy, as part of its transition from the legacy CASS testing stations to the smaller, faster and more reliable eCASS. For additional information, visit About Lockheed Martin Headquartered in Bethesda, Maryland, Lockheed Martin is a global security and aerospace company that employs approximately 100,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. This year the company received three Edison Awards for ground-breaking innovations in autonomy, satellite technology and directed energy. SOURCE Lockheed Martin

  • US expands list of ‘Communist Chinese military companies'

    December 8, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

    US expands list of ‘Communist Chinese military companies'

    by Jon Grevatt   The US Department of Defense (DoD) has identified four additional Chinese corporations that it claims have links to China’s military. The companies’ inclusion on the list of ‘Communist Chinese military companies’ means that US investors will be prevented from buying stock in the firms from January 2021. The new list, which takes the number of blacklisted Chinese companies to 35, features corporations that are known primarily for operations in commercial domains. They include the Semiconductor Manufacturing International Corporation (SMIC), China Construction Technology Company (CCTC), China International Engineering Consulting Corporation (CIECC), and China National Offshore Oil Corporation (CNOOC). The DoD said these firms’ inclusion on the list is aligned with US efforts to tackle China’s military-civil fusion (MCF) strategy, which seeks to adopt advanced commercial technologies for military gains. It said, “The [DoD] is determined to highlight and counter the People’s Republic of China’s (PRC) military-civil fusion development strategy, which supports the modernisation goals of the People’s Liberation Army (PLA) by ensuring its access to advanced technologies and expertise acquired and developed by even those PRC companies, universities, and research programs that appear to be civilian entities.” The DoD added that the list of Chinese companies will continue to be updated “with additional entities as appropriate”. In response to the listing, China’s foreign ministry spokesperson said on 4 December that the move constituted a “groundless suppression”.

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