19 août 2020 | International, Aérospatial, Naval, Terrestre, C4ISR, Sécurité

When the challenge of coronavirus becomes a catalyst to change

One way to understand how the United States' largest defense companies are responding to the coronavirus pandemic is to listen to what their leaders said on the most recent round of earnings calls.

Consider this anecdote from General Dynamics.

Phebe Novakovic, the company's chief executive, told analysts in late July that when COVID-19 struck, “our classified customers closed their sites to all but mission-essential employees. This impacted revenue and earnings and will continue to do so. Some of IT services' highest-margin programs have come to a hard stop because of COVID-19.”

Novakovic described the pandemic as a time of “significant uncertainty.”

That story was not unusual.

David Calhoun, Boeing's CEO, described this as “a historically dynamic and challenging time.” Greg Hayes, Raytheon Technologies' top executive, opened his second-quarter call by stating: “As everyone knows, these last several months have been incredibly challenging.” And Bill Brown, the CEO of L3Harris, said: “The pandemic has challenged us all to find new ways of working effectively.”

To be clear, defense contractors have lost roughly 20 percent of their value in the last six months, by tracking exchange-traded funds. That's the worst run for publicly traded companies in at least a decade.

So what to make of this?

James Taiclet, Lockheed Martin's new leader, said his philosophy is that there may be “an opportunity for us if there is a downturn, we're going to look at the silver linings that may be there.” He was talking about mergers and acquisitions.

But defense companies of all sizes should look for another opportunity: a reason to operate differently, not an excuse to get back to basics. Leaders should reexamine how to embrace new talent, how to effectively telework, and how to add new equipment or partnerships with unexpected sources.

Military leaders for years have said they value agility. Now they will get to watch firsthand who changes, who is prepared for the long term, who adapts and who merely talks about adapting. These “challenges” can give acquisition officials a reason to reward agility.

But back to the earnings calls. Officials hinted about what may happen next, before we — fingers crossed — enter a post-pandemic world. Lockheed's Kenneth Possenriede, the company's chief financial officer, said that while solicitations may be slower getting out the door, final deadlines have not changed.

Brown at L3Harris said: “We believe that the heightened threat environment will drive the trajectory of U.S military spending regardless of the election.”

Novakovic seconded that notion. “There's a general consensus that the threat has not dissipated,” she said. “In fact, arguably some of our potential adversaries have raised additional questions. ... We'll see going forward, but [I'm] not hearing a lot at the grassroots level on ... any pending defense cuts.”

The threat may not have changed. Nor may the business of defense. Yet.

But it's impossible to ignore that almost everything else has.

https://www.defensenews.com/opinion/2020/08/17/when-the-challenge-of-coronavirus-becomes-a-catalyst-to-change/

Sur le même sujet

19 janvier 2021 | International, Aérospatial

Aerovironment buys Arcturus UAV in $405M deal
By: Jen Judson WASHINGTON — Aerovironment, a leading supplier of unmanned aircraft systems to the U.S. military, has purchased Arcturus UAV for $405 million. Arcturus is currently competing for a $1 billion Army contract to replace the Shadow tactical unmanned aircraft system. Arcturus, which was founded in 2004 in California, specializes in Group 2 and 3 UAS, which run the gamut between drones over 20 pounds and under roughly 1,300 pounds. Army units are evaluating Arcturus' Jump 20 UAS. The drone is competing against Martin UAV and Northrop Grumman's V-Bat, Textron's Aerosonde HQ, and L3Harris Technologies′ FVR-90. The Jump is a multimission, medium-endurance, vertical-takeoff-and-landing system that can become airborne independent of a runway. Arcturus also makes the T-20, a multimission, medium-endurance, catapult-launched system. The Army is moving toward a final request for proposals with its Future Tactical UAS program that will replace the Shadow UAS, so the sale of Arcturus to a much larger UAV company is timely. Aerovironment did not have a path to Group 3 UAS, and bringing Arcturus into the fold fills that gap. According to those following the industry, Aerovironment has products that, when integrated into Arcturus' capabilities, could make for attractive future systems. Being acquired by a larger company like Aerovironment would also help the company become a more serious contender in the Army competition by building up its manufacturing capability to radidly produce UAS in large quantities, which the Army would require if the Jump is selected. The total purchase price of the sale is a combined $355 million in cash and $50 million in Aerovironment stock, according to a Jan. 13 news release. Arcturus previously supplied UAS to U.S. Special Operations Command's $1.4 billion MEUAS III and IV programs, the release noted. “We are excited about the opportunities for value creation through our acquisition of Arcturus UAV, which will enable us to accelerate our growth strategy and expand our reach into the more valuable Group 2 and 3 UAS segments,” Wahid Nawabi, AeroVironment president and CEO, said in the statement. “Group 2 and 3 UAS and services, collectively, potentially represent more than one billion dollars in annual contract value, according to an independent forecast,” he added. “Combining our highly complementary products and technologies will enhance our portfolio, deliver top and bottom-line growth, and enable us to provide customers with a complete set of Group 1 through 3 UAS, tactical missile systems, high-altitude pseudo-satellites and unmanned ground vehicle solutions.” With Aerovironment, “we will have greater scale, expanded resources, cutting-edge technology and superior capabilities to meet the growing global demand for our products and solutions,” D'Milo Hallerberg, Arcturus UAV president and CEO, said in the statement. “We are confident that with AeroVironment, we can accelerate our growth as part of a larger, more diverse company and look forward to working closely with the team to complete this exciting transaction.” The transaction is expected to be complete by the final quarter of fiscal 2021, and Arcturus will operate as a wholly owned subsidiary of Aerovironment. https://www.defensenews.com/land/2021/01/15/aerovironment-buys-arcturus-uav-405m-deal/
18 septembre 2018 | International, C4ISR

BAE Maturing microelectronics for next-generation radar, electronic warfare, and communications systems
BAE Systems has signed a cooperative agreement with the Air Force Research Laboratory (AFRL) for Phase 1 of a technical effort to transition gallium nitride (GaN) semiconductor technology developed by the U.S. Air Force to our Advanced Microwave Products (AMP) Center. We've signed a cooperative agreement with the Air Force Research Laboratory (AFRL) for Phase 1 of a technical effort to transition gallium nitride (GaN) semiconductor technology developed by the U.S. Air Force to our Advanced Microwave Products (AMP) Center. As part of the effort, we'll transfer and further enhance the technology, and scale it to 6-inch wafers to slash per-chip costs and improve the accessibility of this defense-critical technology. GaN technology provides broad frequency bandwidth, high efficiency, and high transmit power in a small footprint, making it ideal for next-generation radar, electronic warfare, and communications systems. Under the agreement, we will work with AFRL to establish a 140-nanometer GaN monolithic microwave integrated circuit (MMIC) process that will be qualified for production by 2020, with products available to Department of Defense (DoD) suppliers through an open foundry service. “Millimeter-wave GaN technologies today are produced in research and development laboratories in low volumes at high associated costs or in captive foundries that are not broadly accessible to defense suppliers,” said Scott Sweetland, Advanced Microwave Products director at BAE Systems. “This effort will leverage AFRL's high-performance technology and BAE Systems' 6-inch manufacturing capability to advance the state of the art in GaN MMIC performance, reliability, and affordability while providing broader access to this critical technology.” The work on this project will primarily take place in our 70,000-square-foot Microelectronics Center (MEC) in Nashua, New Hampshire, where we research, develop, and produce compound semiconductor materials, devices, circuits, and modules for a wide range of microwave and millimeter-wave applications. The MEC has been an accredited DoD Category 1A Trusted Supplier since 2008, and fabricates integrated circuits in production quantities for critical DoD programs. As part of the project, the AMP Center team will work closely with the company's FAST LabsTM research organization and MMIC design experts from ENGIN-IC. https://www.baesystems.com/en/article/maturing-microelectronics-for-next-generation-radar-electronic-warfare-and-communications-systems
28 mai 2020 | International, Aérospatial, Naval, Terrestre, C4ISR, Sécurité

‘Prepare to be abandoned’: China seizes on Mike Pompeo’s ‘disconnection’ comment
China's state media has issued a fresh warning for Australia, after a TV appearance by the US Secretary of State sparked a diplomatic storm. China's state media says Australia should “be well prepared to be abandoned at any time” by the United States, after a TV appearance by the Secretary of State sparked a diplomatic storm. The Chinese government-owned Global Times newspaper urged Australia to side with China, drawing on recent remarks from Mike Pompeo that the US could “simply disconnect” from us at any time. “Obviously, what is on the mind of Pompeo and his likes is only US self-interests, and Washington is not going to foot the bill for the lost Australian jobs,” the article says. “Australia is already in a passive position in the face of wavering US policy. Canberra is forced to pick a side between Beijing and the Washington even when it is loath to jeopardise its relationship with China.” On Sunday, Mr Pompeo spoke to Sky News Australia about a proposal by the Victorian state government to work with China's Belt and Road Initiative (BRI). “I don't know the nature of those projects precisely, but to the extent they have an adverse impact on our ability to protect telecommunications from our private citizens, or security networks for our defence and intelligence communities, we will simply disconnect, we will simply separate,” Mr Pompeo said. “We're going to preserve trust in networks for important information. We hope our friends and partners and allies across the world, especially our Five Eyes partners like Australia, will do the same.” The remarks raised eyebrows in Canberra, and prompted the US embassy in Australia to issue a statement making clear the US had “absolute confidence in the Australian government's ability to protect the security of its telecommunications networks and those of its Five Eyes partners”. Based on Mr Pompeo's comments, the Global Times report said “Australia should realise that the US views it only as a lackey”. “The possibility that the US will not come to Australia's rescue when needed is nothing new,” it said. “While the US maintains its global hegemony by running roughshod over the interests of its allies, it does not offer any rewards.” The report concluded by accusing Prime Minister Scott Morrison of “not taking the interests of people in each state seriously”, after the PM said the federal government had never supported Victoria's involvement in the trillion-dollar project. “Boosting employment and economic opportunities is one of the essential tasks for every government, especially local governments. As the US tries to block Victoria's BRI deal, what alternatives does the US offer?” It's just the latest in a series of targeted messages from the Chinese government. Yesterday, the same newspaper warned Australia to “distance” itself from the US amid growing tensions between the two countries, saying it would be “extremely dangerous” for Canberra to get involved in a “new cold war”. “If the Trump administration plunges the world into a ‘new Cold War', forcing China to take countermeasures against the US and its allies, it would be extremely dangerous for Canberra to become a player in a diplomatic club led by the US, given Australia's high dependence on the Chinese economy,” the article said. “Once Australia is regarded as a supporter of the US in a ‘new Cold War', China-Australia economic ties will inevitably suffer a fatal blow. “Australia's economic deterrent force is much smaller than the US', so China to some extent will enjoy more room to fight back against Australia with countermeasures if Canberra supports Washington ... it means Australia may feel more pain than the US.” The debate over trade has intensified as the economic fallout from the COVID-19 pandemic becomes more pronounced. The US, which is closing in on 100,000 COVID-19 deaths, is trying to pin the blame squarely on the Chinese Communist Party, while Beijing says the Trump administration is trying to keep it from becoming a global power. Meanwhile, there have been reports China is considering targeting more Australian exports, with Chinese authorities reportedly drawing up a list of potential goods including dairy, wine, seafood and fruit, which could be subject to tariffs if relations continue to sour. https://www.news.com.au/finance/economy/prepare-to-be-abandoned-china-seizes-on-mike-pompeos-disconnection-comment/news-story/36eebb8c45e9486fe0437124b2936449

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