Boeing posts bigger loss as defense business struggles to turn around

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  5 avril 2018 | International, Naval

  Netherlands ‘very welcome’ to join European sub program — with a caveat

  By: Sebastian Sprenger COLOGNE, Germany — The Netherlands would be welcome to join a German-Norwegian submarine acquisition program, even as the door is closing for final design work on the boats, the Norwegian defense ministry said. The statement comes as German defense industry officials have talked for weeks about what they believe is an impending move to reshuffle big-ticket shipbuilding programs by way of a new naval cooperation umbrella with the Dutch. In that telling, The Hague would join the purchase of 212CD-class submarines, built by Thyssen Krupp Marine Systems' undersea division, and gain a say in the fate of Germany's Mehrzweck-Kampfschiff 180 frigate program, from which the surface division of TKMS was excluded last month. While Berlin and The Hague have officially kept mum about details, several German industry officials and analysts surveyed for this article believe the prospect of a Dutch move is keeping the MKS-180 program's fate unpredictable. When asked about the Netherlands' interest in the German combat ship effort, Dutch defense ministry spokesman Peter Valstar only wrote in an email to Defense News that senior acquisition officials from both countries had met recently to discuss “various topics like possible cooperations on all kinds of defense projects.” As for submarines, “We're currently in the B-phase (research) of our so-called ‘Defence Material Process,‘” Valstar wrote. “The ‘need' (A-phase) of a submarine purchase is clear. The C-phase (further research) and D-phase (product and supplier) are still to come.” Norway has always considered the door open for additional submarine buyers since Oslo teamed with Berlin last year. The joint acquisition would see Norway buy four boats and Germany two. Buying and maintaining identical submarines would keep cost down for both countries, the argument goes. “Norway and Germany would like to see additional partners joining the cooperation, and it would be very welcome if the Netherlands should decide to join,” Norwegian defense ministry spokeswoman Ann Kristin Salbuvik wrote in an email to Defense News. “We are working together towards several potential nations, and we have a good dialogue with potential partners,” Salbuvik added when asked if the Dutch had formally expressed an interest. But the door is closing for would-be partners to have a say in the boats' configurations. “The design of the German-Norwegian submarines will soon be frozen in order for the supplier, TKMS, to be able to provide a binding offer in July 2018,” the spokeswoman wrote. “After this point in time, design changes will be costly, and will also have a negative impact on time and delivery schedules for the German-Norwegian submarine building program,” she added. “If additional partners join the cooperation, it will be beneficial for them to strive for as identical a design as possible.” It is unclear how far discussions for a Dutch-German naval armaments pact have bubbled up toward the defense ministries' leaders. But the issue is “very much a topic of conversation in political Berlin,” one source noted. If given the chance to tweak the MKS-180 configuration, the Dutch would push for a smaller ship design than is currently envisioned, one industry source predicted. With Damen Shipyards, the Dutch already have local industry in the running for the program, teaming with Germany's Blohm &Voss, which is now part of the German Lürssen group. https://www.defensenews.com/global/europe/2018/04/04/netherlands-very-welcome-to-join-european-sub-program-with-a-caveat/

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  12 novembre 2018 | International, Aérospatial, Naval, Terrestre

  Rust Costs the Pentagon $21 Billion Per Year

  By Aaron Boyd, The Defense Department isn't doing a good job determining how much to spend to prevent damage from nature's basic chemical reactions. Rust costs the Pentagon more money annually than many of its most expensive weapons systems—up to $21 billion per year, according to a Defense Department-commissioned audit released in March. The report indicates the corrosion of metals that make up modern weapons systems like fighter jets, ships, ballistic missiles and nuclear weapons can sometimes approach one-third of the total operations and maintenance costs of those systems. The problem is so large, in 2002, the department established the Office of Corrosion Policy and Oversight to ensure big-dollar weapons systems weren't taken offline by oxidation and to help branches determine how much money ought to be spent on rust prevention. But the data being reported by the military branches has been inconsistent and the office has yet to issue guidance on how funding levels should be categorized, according to a related audit released Thursday by the Government Accountability Office. For example, “In fiscal year 2017, the Army and Navy used direct costs, such as salary and training costs, to identify their funding levels, but the Army also included other associated costs. The Air Force used the prior year's funding level and adjusted it for inflation,” the report states. These different methods led to funding requests based on different criteria, making it difficult for Congress to determine what an appropriate funding level should look like. It has also led to vastly different funding requests. In 2017, the Army requested $2.4 million and the Air Force $3 million, while the Navy only requested $220,000. Similarly, all three branches either failed to accurately report the supporting data or, in the Air Force's case, did not provide any data at all some years. “The Army data GAO received did not reconcile with data presented in the Corrosion Office annual reports to Congress for five of eight fiscal years,” auditors wrote. “The Navy data did not reconcile for two of eight fiscal years, and there was no supporting documentation identifying how these figures were calculated. Air Force officials did not provide any figures or supporting documentation for four fiscal years, stating that these figures were not available.” Army officials told GAO they're not able to accurately report how much is spent preventing or combating corrosion because many of those duties are performed by personnel who do many other things, as well. This includes the Army's lead corrosion executive, who also serves as the aviation logistics and safety officer for the Army G-4 logistics organization. “The corrosion-related costs of conducting the corrosion executive role are not separated from this other function,” they told GAO. The Navy had a similar issue but took a different tack. The Navy merely requested $220,000 for the corrosion executive's salary, despite the fact that “this method does not capture other costs, such as personnel assigned to other offices that provide support to the corrosion executive.” The misreported numbers don't appear to be malfeasance, according to the GAO report, but a natural consequence of a lack of direction from the Corrosion Office on how to identify funding needs and properly report that data. GAO made three recommendations to the Defense Department: Issue guidance for identifying and reviewing funding levels for performing corrosion executive duties. Ensure that the Corrosion Office develops a process to maintain documentation of its reviews of corrosion planning. Ensure that corrosion executives establish guidance on reviewing the adequacy of corrosion planning. Defense officials agreed with all three recommendations. https://www.nextgov.com/cio-briefing/2018/11/rust-costs-pentagon-21-billion-year/152709/

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  4 février 2021 | International, Aérospatial, Naval, Terrestre, C4ISR, Sécurité

  To keep up with rivals, DoD nominee will weigh consolidation vs. innovation

  By: Joe Gould WASHINGTON ― President Joe Biden's nominee for deputy defense secretary, Kathleen Hicks, said she is “concerned” about consolidation in the defense industrial base, and that competition is needed to maintain an edge over China and Russia. Hicks, whose office would review deals that involve national security issues if she is confirmed by the Senate, told lawmakers Tuesday that she would work with them to ensure a healthy defense industrial base. The comments came amid market expectations that defense deal-making could take off in 2021. “Extreme consolidation does create challenges for innovation,” Hicks told the Senate Armed Services Committee. “We need to have a lot of different good ideas out there. That's our competitive advantage over authoritarian states like China, and Russia. And so if we move all competition out, obviously, that's a challenge for the taxpayer. But it's also a challenge in terms of the innovation piece.” As the space sector and technological developments drive growth in the aerospace and defense sector and the pandemic weakens commercial aviation firms, companies are “likely to pursue opportunities for consolidation,” the consulting firm Deloitte said in a recent report. Firms could seek new merger and acquisition opportunities, the report said, to “capture more value, drive cost-competitiveness, or acquire targeted niche capabilities and emerging technologies” such as “advanced air mobility, hypersonics, electric propulsion, and hydrogen-powered aircraft.” Recent years have seen a number of major deals, including the combination of Harris and L3 Technologies, United Technologies Corp. and Raytheon; BAE Systems and Collins Aerospace, and General Dynamics and CSRA. Lockheed Martin's $4.4 billion acquisition of Aerojet Rocketdyne, announced in December, has yet to clear regulators. The Federal Trade Commission and the Justice Department also review mergers and acquisition activity in the defense sector. At Tuesday's hearing, Connecticut Democratic Sen. Richard Blumenthal, whose state hosts General Dynamics Electric Boat, told Hicks a drop in the number of submarine suppliers from 17,000 to 5,000 over recent decades suggested broader problems for the defense industrial base, problems that he said were, “extremely alarming to me.” Blumenthal indicated Hicks had committed prior to the hearing to aid small suppliers struggling with the pandemic's economic fallout and to develop new small and medium suppliers. (This was one focus of DoD's acquisition and sustainment office under the previous administration.) “I'm hoping you will focus on the supply chain that is vitally important to suppliers like Electric Boat or Raytheon or any of our major sources of supply,” said Blumenthal, who has served as the top Democrat on SASC's Seapower Subcommittee. A broader theme for the hearing was how Hicks, whose job involves supervising the defense budget, would invest in forward-leaning technologies under a flat budget and divest from existing weapons platforms. Meanwhile, lawmakers grilled Hicks about whether she supported spending on nuclear modernization, shipbuilding and other programs with connections to lawmakers' home states. Acknowledging the political and budget tensions, Hicks said she wants to link future budgetary decisions with concepts for operations, to buy “capabilities that actually line up to theories of victory for how we are trying to pace challenges from China and Russia.” Other lawmakers told Hicks they wanted an easier paths for smaller, cutting edge firms from outside the Beltway to do business with the Pentagon and for them to scale production of their products, beyond the experimentation phase. “We've had testimony before this committee that many smaller companies, particularly in Silicon Valley, and in the technology field generally have given up on the Pentagon, it's too complicated is too lengthy is too expensive, even to fill out the forms,” said Sen. Angus King, I-Maine. For her part, Hicks said Tuesday she would “increase the speed and scale of innovation in our force,” and she would work to understand how alternative acquisitions methods are servings smaller non-traditional suppliers. She affirmed that those firms cannot survive on research and development funding alone. “I do think a sustain level of [research and development] investment is vital, but we actually have to field capabilities, and that's a place where DoD has really struggled,” she said, adding that exercises and experiments help demonstrate the value of new technologies. “When we can demonstrate value, then we're in a much better position to have a dialogue with Congress and with industry about where that where those capabilities can take us.” https://www.defensenews.com/congress/2021/02/02/to-keep-up-with-rivals-dod-nominee-will-weigh-consolidation-vs-innovation/