Back to news

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

We asked defense companies how they’re impacted by the coronavirus. Here’s what they said.

By: Aaron Mehta , Valerie Insinna , Jen Judson , David B. Larter , and Joe Gould

WASHINGTON — Like everyone else in America, the defense industry is still reeling from how quickly the new coronavirus, known as COVID-19, went from a potential issue to a city-shuttering pandemic.

But as major economic hubs like San Francisco and New York City struggle with curfews and restrictions on public gatherings, companies — and the Defense Department — still appear to be sorting out if any shutdowns related to work are imminent.

The fluid nature of the situation is reflected in a series of industry statements, captured below by Defense News reporters. In many cases, when contacted by reporters and asked directly if any production lines were being slowed or halted by the attempt to reduce the rate of infection, spokespeople responded with general comments about challenges with the disease.

That's not a huge surprise to Byron Callan, an analyst with Capital Alpha Partners, who noted that there are many moving parts for companies to work through.

“Maybe it's too soon for a lot of these guys,” Callan said. “When you think about it, we're into the second week of this [as a national emergency]. By the time they do earning calls in April, they should definitely have a better grip on what's happened in the last few weeks and what might they be looking at.”

That could potentially include anything from supply chain issues to delays in delivery of defense articles to a massive bailout of the commercial aerospace industry and issues with pension requirements, Callan warned.

“It's like a giant rock you drop in a lake. It's got all these waves. The people who work in restaurants or hotels are the ones feeling it immediately, but it's going to wash up and ripple through all these sectors, and we just don't know how or when the impact will be,” Callan said. “You're pilling up unknowns and unknowns here.”

Todd Harrison of the Center for Strategic and International Studies noted that the design of modern production spaces shouldn't preclude people being able to work there, noting that for “a lot of those manufacturing jobs, they're set up, and the way a lot of people are doing work, they have adequate social distancing anyway."

“If you've been in these facilities, they're not like sweatshops where people are in crowded, unventilated areas. It's pretty spread out, and a lot of the jobs in defense manufacturing are basically operating machinery,” he said. “I think what would be more affected would be the engineering and design functions, where the engineers tend to operate in more cubicle-like spaces — and you probably don't want to be doing that right now.”

The Pentagon is also early in the process of getting a handle on what those impacts may look like.

The department's top acquisitions official, Ellen Lord, has instituted a daily phone call with the Aerospace Industries Association, National Defense Industrial Association, Professional Services Council, National Association of Manufacturers, and Chamber of Commerce to “ensure the security, reliability and resilience of our defense-industrial base” and “and get feedback on COVID-19 impacts on industry,” according to a department spokesman.

The first call, which happened Tuesday, was chaired by Deputy Assistant Secretary of Defense for Industrial Policy Jennifer Santos and included representatives from the Industrial Policy office, the Defense Contracting Management Agency, the Defense Logistics Agency, and the Defense Pricing and Contracting office.

One potentially vulnerable part of the defense-industrial base is the ongoing modernization of America's nuclear arsenal, which the head of U.S. Strategic Command said last month is approaching a “point of no return” should there be even small delays in the upgrade effort.

On Tuesday, Capt. Bill Clinton, STRATCOM's chief of public affairs, said the combatant command is “confident the services, along with industry partners, are able to keep production related to modernization of our nuclear forces on track, while taking appropriate precautions to keep their workforces safe and healthy. ... While our nation is working diligently to solve this acute public health crisis, I am confident we can continue modernizing our nuclear forces on time as planned.”

Over the past few days, Defense News reached out to a number of key defense players whose production lines could be impacted by the virus. Here is a collection of their responses:

BAE Systems spokeswoman Kelly Golden:

BAE Systems has robust business continuity plans which have been implemented and are under constant review as the situation evolves. We continue to ensure we are providing a safe work environment for our employees, customers and suppliers while minimizing impact to our operations. We have also asked our suppliers and contractors to implement measures that are consistent with those we have put in place to protect our employees.

Boeing spokesman Larry Chambers:

Boeing has issued updated guidance directing all employees who are able to perform their work from home effectively to telecommute until further notice. Some Boeing sites were already partially or fully operating under these guidelines in accordance with local or national government mandates.

Production continues at this time, and the company has enhanced cleaning procedures in work spaces, common areas and on high-touch surfaces. We're assessing the safety of all of our sites and their alignment with local, state and national government guidance as we continuously monitor this evolving situation.

Leadership at each of our sites is working closely with their employees to implement the guidance, and will make all decisions necessary to follow evolving government direction and to ensure the health and wellbeing of their teams and communities.

Electric Boat spokeswoman Liz Power:

Electric Boat remains open for business. Our ongoing mission is to provide our Navy with the high-quality submarines they require to complete their missions. We have initiated all government-recommended measures to mitigate spread of the disease and continue to work closely with our employees, customers, suppliers, stakeholders and our community to keep them informed.

Fincantieri spokesman Eric Dent:

Fincantieri Marine Group has customers with important missions — naval and commercial — and together we're dealing with the Coronavirus pandemic and working to prevent or reduce its impact to our mission and our people. So far, we have experienced no production delays. Obviously like other businesses and shipyards, we have to balance force health protection and production as we work through this.

We've taken several mitigating actions, such as extensive cleanings of common areas, scrutinizing the self-reported health of every guest or visitor in the yard, eliminating all but critical travel outside the local area. In some circumstances, we are encouraging employees to work from home if possible. Through this all, we continue to reinforce the need for stringent personal hygiene and social distancing protocols, as well as eliminating large gatherings. We continue communicating with our employees so they understand the importance of their health is to us and their families, and if they exhibit symptoms or are caring for someone with flu-like symptoms, they should not risk the potential spread of it and stay home in accordance with our personnel policies.

We suspended all international travel Mar. 4, and all non-critical domestic travel on Mar. 9. We suspended intracompany travel Mar. 13, to reduce the chance of exposure across multiple Fincantieri shipyards in Wisconsin.

General Dynamics Land Systems:

We are open for business. Our ongoing mission is to provide our Soldiers with the critical platforms and capabilities that they require to complete their mission. We have initiated all government-recommended measures to mitigate spread of the disease and continue to work closely with our employees, customers, suppliers, stakeholders and our community to keep them informed.

Huntington Ingalls Industries spokeswoman Beci Brenton:

At HII we are taking actions that are designed with the health and safety of our employees at the forefront of our decision making, and this extends across the enterprise. We are having multiple meetings 24/7 with leadership and diligently monitoring the ever changing situation, as well as following CDC's guidelines. This is rapidly evolving and some measures are division specific while others are universal. [HII has put a video statement from its CEO online addressing several issues.]

Lockheed Martin spokesman Trent Perrotto

As we monitor global developments we continue to use best practices to mitigate risks related to Coronavirus (COVID-19).

The health and well-being of our employees and partners is our top priority. Across Lockheed Martin, employees with potential exposure are instructed to work remotely and self-quarantine. We have provided guidance to employees and their managers to accommodate flexible work schedules and alternative arrangements where possible. We continue to follow travel guidance from the U.S. government and other countries where we do business, and are limiting all other international and domestic travel unless necessary for business. We also pre-screen visitors to company locations and limit guests to ensure visits are necessary for business. When the circumstances warrant, we deep clean work areas and common spaces in any facility with elevated exposure to COVID-19 and regularly share exposure-prevention protocols to reinforce healthy behaviors.

Additionally, we are mitigating any potential impacts to customers and implementing business continuity plans as required, including secure telework for our customer support teams. There are no specific impacts to our operations or supply chain at this time. We will continue to monitor and coordinate with customers should issues arise.

Northrop Grumman spokesman Tim Paynter:

We continue to closely monitor this rapidly evolving situation so we can quickly address concerns and impacts to our employees, operations and customers, and we are ready with contingency plans as the situation continues to develop.

The safety and well-being of our employees is our top priority and we are continuing to provide our employees as much information as possible.

We are taking additional steps to protect the well-being of our employees, including halting travel, limiting non-essential visitors to work environments, reducing density and increasing separation distance where possible, providing personal hand sanitizers and cleaning our workplaces on a daily basis and disinfecting as needed.

Oshkosh Defense spokeswoman Alexandra Hittle:

Oshkosh Defense is committed to preventing the spread of COVID-19 and is closely following the Center of Disease Control's (CDC) guidelines and recommendations. The safety and wellbeing of our team members and our customers is of the utmost importance, therefore we have taken critical steps to ensure we are taking care of our people while maintaining continuity of operations.

Raytheon spokesman John Patterson:

We are actively monitoring the COVID-19 pandemic and have taken a variety of immediate steps to ensure the safety and wellbeing of our employees. This includes domestic and international travel restrictions, restrictions on face to face meetings, and new work-from-home and social distancing protocols in all our facilities.

https://www.defensenews.com/coronavirus/2020/03/18/we-asked-defense-companies-how-theyre-impacted-by-the-coronavirus-heres-what-they-said

On the same subject

  • Rheinmetall and Ukrainian partner produce 155mm rounds in Ukraine - Army Technology

    February 19, 2024 | International, C4ISR

    Rheinmetall and Ukrainian partner produce 155mm rounds in Ukraine - Army Technology

    Rheinmetall establishes a joint venture with an unnamed Ukrainian industry partner to produce 155mm rounds in Ukraine.

  • CREAFORM OUVRE UN BUREAU EN ESPAGNE

    September 28, 2018 | International, C4ISR

    CREAFORM OUVRE UN BUREAU EN ESPAGNE

    Le fournisseur de services et leader en métrologie 3D renforce sa présence sur le marché européen Creaform, un leader mondial en services d'ingénierie et de solutions de mesure 3D portables, annonce aujourd'hui l'ouverture d'un nouveau bureau à Barcelone, en Espagne. Avec cette ouverture, Creaform continue son expansion sur le marché international et franchit ainsi une autre étape importante pour le renforcement de son offre de services et de technologie de métrologie en Europe. Le personnel sur place est installé depuis juillet, afin de répondre à la demande croissante pour les services et les systèmes de métrologie sur le marché espagnol, particulièrement dans les secteurs de l'automobile et de l'aérospatiale, des industries clés pour Creaform. L'Espagne est le 8e plus grand producteur automobile au monde et le 2e plus grand constructeur automobile en Europe. Quant à son industrie aérospatiale avancée, elle se place au 8e rang mondial et au 5e rang en Europe, en matière de chiffre d'affaires. « Avec le récent développement économique et industriel de l'Espagne, il y a un nombre croissant d'opportunités potentielles, ainsi qu'une plus forte demande en nouvelles technologies, telles que nos solutions de mesure 3D automatisées et portables. Nous avons remarqué une demande croissante particulièrement pour les solutions automatisées de contrôle de la qualité au sein des industries susmentionnées. Nous avons répondu à cette demande avec notre nouvelle MMT à numérisation 3D, CUBE-R », explique Marc-Antoine Schneider, responsable régional chez Creaform. « Pour nous, travailler localement avec une présence en ventes directe et un bureau de service était une approche logique. Creaform continuera de travailler avec des distributeurs établis afin de renforcer davantage sa présence dans la région ». L'ouverture du bureau espagnol résulte de la stratégie d'expansion de marché de Creaform. Lors des deux dernières années, Creaform a ouvert des bureaux au Brésil, en Italie, à Singapour et en Corée du Sud. À propos de Creaform Creaform conçoit, fabrique et met en marché des technologies de mesure 3D portables, en plus de se spécialiser en services d'ingénierie. L'entreprise offre des solutions novatrices, dont la numérisation 3D, la rétro-ingénierie, le contrôle de la qualité, le contrôle non destructif, le développement de produit et la simulation numérique (FEA/CFD). Ses solutions s'adressent à une vaste gamme de secteurs d'activité, notamment ceux de l'automobile, de l'aérospatiale, des produits de consommation, de l'industrie lourde, des soins de santé, de la fabrication, de l'industrie pétrolière et gazière, de la production d'énergie, ainsi que de la recherche et de l'éducation. Outre son siège social à Lévis, au Québec, où sont regroupées ses activités de production, Creaform exploite des centres d'innovation à Lévis et à Grenoble, en France, en plus de posséder des bureaux aux États-Unis, en France, en Allemagne, en Italie, au Brésil, en Chine, au Japon, en Inde, en Corée et à Singapour. Creaform est une unité d'affaires d'AMETEK Technologies d'ultraprécision, une division d'AMETEK inc., chef de file mondial de la fabrication d'instruments électroniques et d'appareils électromécaniques, qui réalise un chiffre d'affaires annuel d'environ 4,3 milliards de dollars US. https://www.creaform3d.com/en/pressroom/9602

  • Fewer airmen, fewer bombs and delayed F-15s: Goldfein outlines effects of continuing resolution

    November 8, 2019 | International, Aerospace

    Fewer airmen, fewer bombs and delayed F-15s: Goldfein outlines effects of continuing resolution

    By: Stephen Losey With Congress flailing in its attempt to pass a budget and the prospect of a lengthy continuing resolution growing, Air Force Chief of Staff Gen. Dave Goldfein on Wednesday outlined how bad that would be. A year-long CR, funding the Air Force at fiscal 2019 levels, would cost the service the $11.8 billion increase called for in President Trump's proposed fiscal 2020 budget, Goldfein said at a breakfast hosted by the Air Force Association in Washington. “It's truly damaging for all the services, and certainly the United States Air Force,” Goldfein said. Even if a CR only lasts for six months, the effects would be significant, he said. The Air Force would lose $1.1 billion that would go to Boeing's development and production of new F-15EX fighters, postponing their acquisition and driving up prices, according to a fact sheet Goldfein distributed. It would also force the Air Force to keep flying F-15Cs for longer than it expected, resulting in further cost increases due to the extensive maintenance needed to keep the aging fighters, plagued by structural health issues, in the air. A six-month CR would also hit the Air Force's effort to re-arm. It would reduce munitions procurement by 1,000 tailkits to convert unguided bombs into guided Joint Direct Attack Munitions, as well as cut 99 Sidewinder air-to-air missiles and 665 Small Diameter Bomb II munitions. And that CR would cost the Air Force $188 million intended for improvements to almost one-third of its F-35 fleet. But a year-long CR would be even worse, Goldfein said, hitting airmen directly and limiting the planned 3.1 percent pay raise for troops. It would also scuttle the Air Force's plans to grow its total force end strength by 4,400, he said, which would hurt its efforts to grow vital — and undermanned — career fields such as operations, maintenance, space, cyber, and intelligence, surveillance and reconnaissance. Efforts to fix the pilot shortfall would take a hit, cutting $123 million from undergraduate flight training, Goldfein said. This would mean contractor instructor pilots would be reduced, a new maintenance training center's opening would be delayed, and trainer fleet maintenance would be delayed. A CR for all of fiscal 2020 would also delay the procurement of the GPS IIIF space vehicle to replace a satellite that has now been orbiting for twice as long as it was designed, which would place the Air Force in a contract breach. It would withhold $466 million in facility sustainment, restoration and modernization funds, as well as Defense Department emergency funding, slowing the efforts to recover from natural disasters at Tyndall and Offutt Air Force bases. In all, a six-month CR would delay the start of 26 new programs, 7 production increases, and eight military construction projects. A year-long resolution would prevent 88 new starts, 14 production increases and 41 military construction projects. F-22 sensor upgrades would also be delayed if a budget is not passed, the Air Force said. But as rocky as the 2020 budget process may be, Goldfein sees even darker days to come. “If you look at the projections of funding in the years ahead, many believe that [2021] may very well be the last really good year of funding," Goldfein said. “It may not be true. But it may go flat after that, or it may start coming down. And so, how do you achieve irreversible momentum if you have one good year left of reasonable resources before a potential downturn?” https://www.airforcetimes.com/news/your-air-force/2019/11/06/fewer-airmen-fewer-bombs-and-delayed-f-15s-goldfein-outlines-effects-of-continuing-resolution/

All news