Nouvelles

"I think a three month slow-down in program activity is an optimistic projection based on the level of damage the economy is currently sustaining." By PAUL MCLEARYon April 21, 2020 at 3:33 PM WASHINGTON: Defense industry and Pentagon leaders are struggling to assess what impact the COVID-19 pandemic will have on building and maintaining the global US arsenal, but early assessments agree there'll be some disruption and delay as the global economy teeters. How much, how long, and where those disruptions will occur are something of an open question. With massive supply chains across the globe that run from small mom and pop manufacturing shops to massive global conglomerates, there's no one formula to assess what will happen to the industrial base in the weeks and months to come. On Monday, Pentagon acquisition chief Ellen Lord said she expects the largest programs to see three-month delays, but some analysts say that assessment could be too rosy. “I think a three month slow-down in program activity is an optimistic projection based on the level of damage the economy is currently sustaining,” said Andrew Hunter, former chief of staff to two heads of Pentagon acquisition. Hunter is now at the Center for Strategic and International Studies. The designation of the defense industry as critical infrastructure has ensured that shipyards, factories, and shops have generally remained open, as workers stagger shifts and companies provide liberal leave and teleworking where possible. That has placed the defense industry in a good position relative to other parts of the economy. But the supply chain those companies rely on “is tightly interlinked with the commercial economy, especially the aviation and automotive sectors, and this will transmit a degree of economic disruption into defense in the coming months,” Hunter said. Lord singled out the aerospace sector, along with shipyards and space launch as areas most at risk of slowdown and disruption. So far, though, the Navy and its largest shipbuilder say they're mostly working through the issues, and are staying away from putting a specific length of time on any delays. “We do not have a list of programs that are delayed, but as Ms. Lord and [Navy acquisition head James] Guerts have both said, while it's too soon to identify specific delays, generally we are expecting and planning for program disruptions,” Navy spokesman Capt. Danny Hernandez told me in an email. Geurts has moved to accelerate funding for some work and parts supplies so industry can eventually ramp up once the entire workforce is back on the job. Speaking to reporters last week, Geurts said over the “next three four weeks we'll get a better view of the exact delay and disruption and then how we might mitigate that, or quite frankly, where do we have opportunities where we can accelerate things” due to some excess capacity in the supply base because it's not being consumed by commercial aviation or shipbuilding. At the country's largest shipbuilder, Huntington Ingalls, company executives told me recently they're not seeing significant reductions in the number of parts they're receiving. “We are working with a few critical suppliers that are having challenges, but I think for the most part are going to be able to get through that,” said Lucas Hicks, vice president of new construction aircraft carrier programs. “We have reached out to all the suppliers and are working with them to try to help them.” There will be some pain, though how much is up for debate. Analyst Byron Callan of Capital Alpha Partners said in a note Monday that a three-month impact might not force companies to drastically change their expectations for the whole year. Any slippages this spring “could conceivably be made up in subsequent months, but that may be a challenge. Contractors could sustain prior guidance and just call out COVID-19 as a risk for the full year, or drop guidance altogether. No one has a perfect crystal ball.” Hawk Carlisle, president of the National Defense Industrial Association, said on a Monday conference call organized by the Jewish Institute for National Security of America that the slowdown in the global economy “is going to cause things to cost more, whether it's service agreements or products and manufacturing capability.” He's looking to the next congressional stimulus package for an acknowledgment “that these programs are going to exceed budget,” he added, “because of this two to three months of delays, partial workforce, paying the workforce, inability to perform on contract.” But Hunter thinks, so far, the Pentagon has handled the situation as well as can be expected: “To the department's credit, they have been aggressively looking for issues in the supply chain, which means that Ms. Lord's estimate becomes a lot more likely if they succeed in staying ahead of these problems.” https://breakingdefense.com/2020/04/pentagon-industry-struggle-to-chart-impacts-of-covid-on-arsenal

By DEAN CHENG on April 21, 2020 at 10:55 AM Wars and pandemics, great destroyers of the status quo, often generate enormous societal change. An outbreak of hoof-and-mouth disease in the early 20th century, for example, gave the internal combustion engine a permanent lead over steam-powered automobiles. The First World War saw more improvements in aeronautical engineering and airplane manufacturing than the previous decade. The unprecedented global shut down that has seen perhaps half of humanity locked down has generated enormous demands for Internet access, especially broadband. The sudden confinement of so much of the world's work force has led to a massive increased demand for broadband, and not simply for entertainment. Telework, telemedicine and a major increase in videoconferencing are all major parts of the new work environment. Verizon, for example, has seen a 20 percent increase in Web traffic, a 12 percent increase in video services. Many experts have predicted demand for broadband will greatly increase in coming years, especially for 5G networks capable of handling massive data flows at speed. The need would rapidly grow, as smart cities and autonomous vehicles became a reality. But the shift to telecommuting has likely accelerated that demand, shifting it to an immediate need. That demand for increased connectivity is not likely to completely recede even after COVID-19 is overcome, any more than public horse troughs returned after the hoof-and-mouth outbreak ended. Instead, if living in dense urban conurbations is seen as posing a growing health risk, a subsequent population shift toward suburbs and rural areas will only further heighten demand for extensive nationwide 5G access. The ability to provide secure informational pipelines capable of handling massive data traffic has now become essential for the functioning of the broader economy, well beyond rapid downloading of movies and video-games. The benefits offered by 5G, whether in terms of faster upload and download times, or more stable connections, will provide immediate economic benefits in the post-COVID world. This will only sharpen the ongoing tensions between the United States and the People's Republic of China over the role of Huawei in building those 5G networks. Even before the outbreak of COVID-19, Washington and Beijing were battling over the security risks posed by Huawei systems. The United States excluded Huawei from its backbone communications infrastructure and is restricting sales of Huawei cell phones and tablets, but it was actively lobbying other nations to do the same. China, in turn, has striven to reassure other nations that not only is Huawei secure, but that it is a bargain. For the Chinese leadership, building the global 5G network is a matter of government policy because it would ensure that China will enjoy sustained economic benefits servicing and upgrading those networks for decades to come. Given the Chinese leadership's focus on establishing “information dominance,” it would also generate enormous strategic benefits. As demand for bandwidth has surged the global pandemic has led to an explosion of hacking and other cyber crime activities, as criminal and state actors exploit the panic and demand for information. Reports estimate that thousands of phishing sites and scams are being created every day. This has included ransomware attacks on hospitals, as well as efforts to hack the World Health Organization and pharmaceutical companies engaged in COVID-19 vaccine research. Among the identified hackers are Chinese (Vicious Panda, Mustang Panda), as well as South Korean, Vietnamese and other groups. One of the newest threats to arise comes courtesy of the massive demand for telecommuting and teleconferencing software. One of the key apps to fill the gap has been Zoom, software for video conferencing, audio conferencing, web conferencing, and messaging. It works on mobile and desktop devices, and in conference rooms. Unfortunately, Zoom has also been found to have major security gaps, including apparently uniwitting transfers of some encryption keys to China-based servers. This created the potential for Chinese elements to access the conferences, as well as data on participants' cell phones, tablets or computers. COVID: Crisis or Opportunity? The Chinese leadership has sought to exploit the COVID crisis to burnish its reputation in key countries where it can play a role in building 5G networks. It is no accident that one of the earliest recipients of Chinese medical attention was Italy — Italy is the only G-7 country to have signed onto the Chinese “Belt and Road Initiative” (BRI). As important, Huawei is establishing 5G testbeds in a number of Italian cities. For the Chinese, the ability to project the image of a good partner, providing aid to Italy when its EU partners and the United States did not, would undoubtedly generate good will and greater openness to Chinese participation in the 5G build-out. This same approach marked such efforts as China's arrangement for the world's largest aircraft, a Russian AN-225, to carry tons of medical supplies to Poland, as well as Chinese provision of medical teams and aid to German towns hard hit by the virus. There would seem to be two implicit messages conveyed by the Chinese. The first is that China is a good partner, providing aid and assistance to when countries need it. The other is that China is a reliable partner, especially in terms of supply chains, whether for personal protective equipment (PPE) or high technology items. To support these benign messages, Beijing has also sought to quash any attempt to link COVID-19 to China, and in particular to reject any suggestion that the Chinese government bears any responsibility for its spread. Chinese officials have said that COVID-19 may have come from the United States (with Chinese social media discussing American participants in the World Military Games in China last October). The official Xinhua timeline for the coronavirus pandemic emphasizes its cooperation with the WHO, while making little mention of Dr. Li Wenliang, the doctor who tried to warn higher authorities of the outbreak of a new disease, caught it himself and died. This narrative is belied by the reality that China has neither been transparent about the coronavirus outbreak within its borders, nor been a good or reliable partner in dealing with the disease. China's suppression of information about the disease, including the muzzling of Dr. Li, have become much more widely known. China's delayed quarantine, admitted by the mayor of Wuhan, almost certainly contributed to the global spread of the pandemic. Even more damaging to the Chinese narrative, however, has been the dishonesty of its claims. In the case of Italy, for example, much of what Chinese media presented as aid was actually equipment that Italy purchased from China. Many other European countries, including Spain, the Netherlands and Turkey have found that a range of Chinese medical items, including everything from masks to testing kits, did not work or was defective. In other cases, exports of badly needed medical equipment from China have been delayed due to bureaucratic red tape. More worrisome, some reports indicate that Beijing has suddenly imposed export restrictions on COVID-19 related medical equipment. That is, even equipment that has been paid for may not be exported, raising fundamental questions about the reliability of the Chinese portion of supply chains. At the same time, Chinese efforts to deflect responsibility for the COVID-19 outbreak have also created growing negative images of the PRC. Chinese officials, for example, have not only accused the United States as being the source of the virus, but also Italy. It is clear that while Chinese doctrine on political warfare calls for coordinated, integrated messaging, that remains an aspirational goal. Implications for the Future It is very clear that the Chinese leadership hopes to exploit COVID-19 and its aftermath to help shape a world where China's reputation, soft power and technological access and capabilities are all enhanced. In particular, building on Huawei's ability to sell quality 5G equipment at a substantial discount, China hopes to take advantage of the burgeoning demand for broadband to ensure that Huawei will be integrated into the global informational ecosystem. But China's actual behavior should serve as a warning to economic and strategic decision-makers. It is not at all clear that China is either a good or reliable partner, especially in terms of supply chains. If Chinese PPE provided to foreign customers often fails to work, it may not be the result of a deliberate decision to export ineffective equipment; indeed, this is unlikely given China's political goal of improving its reputation and standing. It does mean that, even in the case of relatively low-technology systems such as masks and chemical tests, China's quality is abysmal. What might this suggest about Chinese-built telecommunications systems? In fact, the 2019 report from the Huawei Cyber Security Evaluation Centre (HCSEC) Oversight Board about the security of Huawei's equipment already emplaced in the UK was scathing. Not only were there a variety of security vulnerabilities, but even previously identified problems had not been addressed by Huawei. There seems to be a pattern of both poor quality control and post-sales support in Chinese manufacturing, which could be catastrophic if allowed in strategic systems such as 5G communications networks. The potential Chinese willingness to impose export controls and restrictions in time of crisis only further raises questions about the resilience of Chinese-manufactured networks, should a political rather than a health crisis arise. COVID-19 further complicates this picture by retarding development and roll-out of alternative 5G networks. Apple has indicated its first 5G enabled iPhone may be delayed from a planned September unveiling. Dish Network has indicated that COVID-19 will delay the construction of its 5G network, but the nationwide lockdown has affected all telecom companies' construction efforts. Samsung, the company best situated to challenge Huawei's ability to construct an integrated 5G network, from mobile telephones and tablets to base stations to servers and routers, also fears that COVID-19 may retard its efforts. The impact of the global shutdown on financial institutions is also likely to affect funding for this massive infrastructure project. But this situation may provide Western nations with a golden opportunity. If COVID-19 is likely to affect everything from auctions for spectrum to infrastructure financing, Western nations should take the opportunity to reconsider their willingness to allow the PRC to construct such a vital part of their national information and strategic backbones. Given the competing demands all leaders are likely to face as the world emerges from COVID-19, deferring key decisions on 5G (and the attendant costs of construction) may make financial, as well as political sense. It would also give Huawei's competitors, including not only Samsung but Ericsson, Nokia and others, a chance to catch up. If nothing else, having more competition would provide national and corporate decision-makers more options, and therefore more leverage in any negotiation with Huawei. Indeed, Huawei's own executives seem to recognize that COVID-19 may have altered the landscape. In a letter to the British parliament, the head of Huawei UK warned: “Disrupting our involvement in the 5G rollout would do Britain a disservice.” Like its behavior regarding COVID-19, Chinese statements such as this may well reveal far more than was intended. https://breakingdefense.com/2020/04/china-covid-19-and-5g-golden-opportunity-for-the-west

Tucson, Ariz., April 20, 2020 /PRNewswire/ -- The U.S. Air Force announced plans to continue with Raytheon Missiles & Defense, a business of Raytheon Technologies (NYSE: RTX), on the development of the Long-Range Standoff (LRSO) cruise missile, a strategic weapon that will replace the service's legacy Air-Launched Cruise Missile. Raytheon Missiles & Defense, a business of the newly formed Raytheon Technologies, was formed on a foundation of advanced innovation and excellence in engineering. "LRSO will be a critical contributor to the air-launched portion of America's nuclear triad," said Wes Kremer, president of Raytheon Missiles & Defense. "Providing a modernized capability to the U.S. Air Force will strengthen our nation's deterrence posture." In 2017, the U.S. Air Force awarded Raytheon and Lockheed Martin contracts for the Technology Maturation and Risk Reduction (TMRR) phase of the program. The Raytheon Missiles & Defense LRSO team recently passed its preliminary design review and is on track to complete the TMRR phase of the defense acquisition process by January 2022. Contract negotiations for the engineering and manufacturing development phase, with a strong focus on schedule realism, affordability, and cost-capability trades, will start in fiscal year 2021. The contract award is anticipated in fiscal year 2022. To view the U.S. Air Force's announcement, click here. About Raytheon Technologies Raytheon Technologies Corporation is an aerospace and defense company that provides advanced systems and services for commercial, military and government customers worldwide. With 195,000 employees and four industry-leading businesses ― Collins Aerospace Systems, Pratt & Whitney, Raytheon Intelligence & Space and Raytheon Missiles & Defense ― the company delivers solutions that push the boundaries in avionics, cybersecurity, directed energy, electric propulsion, hypersonics, and quantum physics. The company, formed in 2020 through the combination of Raytheon Company and the United Technologies Corporation aerospace businesses, is headquartered in Waltham, Massachusetts. Media Contact Tara Wood C: 520.247.5630 Tara_woods@rtx.com View source version on Raytheon Company: http://raytheon.mediaroom.com/2020-04-20-US-Air-Force-selects-Raytheon-Missiles-Defense-to-develop-Long-Range-Standoff-weapon

While the pandemic's halted field exercises, tabletop wargames can continue long-distance. The catch? Getting classified bandwidth so you can discuss specific military capabilities. By SYDNEY J. FREEDBERG JR.on April 21, 2020 at 7:31 AM WASHINGTON: With Pentagon travel restrictions now extended through June 30th, the Army's in-house futurists can't hold their usual face-to-face brainstorming sessions. So rather than delay their work for months, they're moving seminars and wargames online – but there's a tradeoff. The long-distance collaboration tools available so far aren't secure enough for classified data, which means some scenarios are off-limits. The COVID-19 coronavirus has halted some – but far from all – military training and experimentation. Army Futures Command in particular has had to cancel some high-priority field exercises to try out new tactics and technologies, but a lot of its work is thinking about the future, which you can do long-distance, one of its deputy commanders said in a video town hall last week. “We did have to cancel the Joint Warfighting Assessment [JWA] in Europe,” Lt. Gen. Eric Wesley said, “[but] a lot of the work we do in terms of developing concepts...is moving ahead without significant impact.” Wesley runs one of Army Futures Command's three major subunits, the internal thinktank now known as the Futures & Concepts Center (formerly ARCIC), which brainstorms, wargames, and writes about how conflict will change. Tabletop exercises (TTXs, in Army jargon) can move online. That will include the Futures & Concept Center's annual “capstone exercise” on the Army's concept for future warfare, Multi-Domain Operations, he said. It also included another MDO exercise that had been set to take place in May at the Army War College. Four-Star Orders The May wargame was particularly important because it was the kick-off for a study ordered by the four-star chief of Army Futures Command himself, Gen. John “Mike” Murray, one of Wesley's staff officers told me when I followed up. “We wanted to be able to return to Gen. Murray sooner versus later with initial findings,” Col. Chris Rogers told me, “then continue to experiment throughout the summer and the [fall].” The topic that Murray was so intent on? “It was focused specifically on addressing concerns that Gen. Murray had with calibrated force posture,” Rogers said. In layman's terms, that means what soldiers need to be where, with what equipment, at what time, to handle specific threats. In practice, “calibrated force posture” is a 3-D chess game with a few hundred thousand pieces. You have to figure out what kind of forces need to be forward-deployed on allied territory before a crisis starts, what they should do to deter potential adversaries, what warning you might have of an impending attack, what reinforcements you can send in time, how the adversary can stop those reinforcements, how you can stop the adversary from stopping you, and so on ad infinitum. To start tackling these questions, the plan had been to bring officers and civil servants together from all the Army's “schoolhouses” – the armor and infantry center at Fort Benning, the artillery center at Fort Still, the aviation center at Fort Rucker, and so on – for two weeks at the War College. The scenarios to be examined, focused on a particularly challenging region for military deployments: the vast expanses of the Pacific. Now, this wasn't going to be a wargame in the classic sense, with somber men pushing wooden blocks on big maps or icons battling each other on a big screen. No one can write the rules for a detailed simulation yet because the Army's still brainstorming solutions. Instead, such events are more like highly structured seminars, with teams splitting off to analyze particular aspects of the scenario and reporting back on possible plans, at which point they may get challenged with “well, what if the enemy does this?” But precisely because this wasn't a detailed simulation, the Army didn't need specialized software to run it long-distance – just standard online collaboration tools. (In this case, those tools were provided by DTIC, the Defense Technical Information Center). Rogers described the process as a “guided, threaded discussion.” As he explained it, it sounded a lot like an online discussion board, with moderators posting topics and participants posting replies and replies to replies back and forth. That's actually one of the longest-established applications of the Internet, dating back to the Bulletin Board Systems (BBS) that predate the World Wide Web. Modern equivalents are much more sophisticated: You can post graphics like maps and operational diagrams, for instance, which are definitely useful for a military planner. But the systems available to Rogers & co. in May still had definite limits. Limiting Factor The biggest issue? “It's an unclassified network, so there are certain things that we lose,” Rogers told me, like the ranges of specific current and future weapons. The compromise the wargamers made is they'll restrict this first exercise to what's called the “competition phase.” That means everything that happens before – or hopefully instead of — the outbreak of a shooting war — the “conflict phase.” Not simulating actual battles might sound like a major handicap for military planners. But the Army has slowly and painfully come to realize that, while it's really, really good at planning combat operations (what it calls “kinetics”), it really needs to practice the strategic, political and propaganda maneuvering that goes on outside of combat (“non-kinetics”), because you can win every battle and still lose the war. Indeed, from Russia seizing Crimea without a shot to China quietly annexing large portions of the South China Sea, America's adversaries have proven highly capable of accomplishing military objectives without firing a shot. Now, military power still matters in the competition phase: Over all the shadow-boxing there looms the threat of force. But because the competition phase is about deterring war, not waging it, what matters is not the actual capabilities of your weapons, but what the enemy thinks your weapons can do. That, in turn, means you can brainstorm the competition phase in an unclassified discussion, using publicly available information, without ever getting into the classified details of what your weapons could really do when and if the shooting starts. “That's why we felt very comfortable with [changing] from a classified event to an unclassified event, [for] the first iteration,” Rogers told me. Likewise, instead of using classified scenarios depicting potential future crises, he said, they used real crises from recent history, where there's plenty of unclassified information, and then discussed different ways the US could have approached them. At some point, of course, the discussion will have to move on from the competition phase to conflict – from how you calibrate the posture of your forces to how those forces, once postured in the right place, would actually fight. Rogers & co. help to get into those classified details in the next major wargame, scheduled for August. August is after the Pentagon's travel ban expires – at least, in its current form. But given how unpredictable the pandemic has been so far, another extension is entirely possible, Rogers acknowledges, so he and his team are studying alternatives to a face-to-face event. As Lt. Gen. Wesley put it in his town hall: “The real issue is, how long does this last?” https://breakingdefense.com/2020/04/covid-19-army-futures-command-takes-wargames-online/

April 17, 2020 - Babcock Team 31 is pleased to announce the second round of supply chain contract awards across the UK and Europe to support the Royal Navy's Type 31 general purpose frigate programme. Rolls-Royce is now a major supplier to the programme with its brand MTU, delivering the Main Engines and Diesel Generators for the Frigates, which will be manufactured in Germany. Renk, will provide the main reduction gearboxes, and MAN Energy Solutions will supply the propellers and propeller shaft lines. In addition, Blunox are contracted to supply the exhaust environmental equipment that significantly reduces emissions from the Main Engines and Diesel Generators. Combined with the subcontract placed with Darchem Engineering Ltd, will supply the intake and exhaust systems for the main engines and generators, rounding out the key propulsion system subcontracts. We are also pleased to announce award of the Chilled Water Plant subcontract with Novenco AS, providing critical system capability for the HVAC system. The Type 31 Programme will deliver prosperity into shipbuilding and the extended supply chain. The scale of this investment, principally in design, engineering, project management, procurement and advanced manufacturing skills, has an enduring positive impact on the UK. Sean Donaldson, Managing Director for Energy & Marine, said: “Team 31 have committed to a programme of investments to deliver prosperity in line with the National Shipbuilding Strategy. We are delighted to welcome these key suppliers to the supply chain for the Type 31 frigate programme, and we continue to engage with additional suppliers to support this exciting programme for Babcock and the Royal Navy.” View source version on Babcock: https://www.babcockinternational.com/news/babcock-announces-type-31-supply-chain-contract-awards/

San Diego, April 16, 2020 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a leading National Security Solutions provider, announced today that its Kratos Unmanned Systems Division (KUSD) has been selected, and will participate in the Indefinite-Delivery Indefinite Quantity - Multiple Award Contract (IDIQ-MAC) to support the U.S. Naval Sea Systems Command Unmanned Surface Vehicle (USV) Family of Systems (FoS). The USV FoS includes platforms and systems that comprise the U.S. Navy's future unmanned surface fleet. With a contract ceiling for all orders under this IDIQ-MAC of $982.1 million, the government intends to support, maintain and modernize USV systems and subsystems to meet current and future operational requirements for Unmanned Maritime Systems under Program Executive Office Unmanned and Small Combatants. Under the contract KUSD is eligible to compete for individual tasks and/or delivery orders. The USV FoS IDIQ-MAC base contracting vehicle has an initial ordering period of 60 months after date of contract award. If options are exercised the base contracting vehicle will extend to an ordering period of 120 months. Steve Fendley, President of Kratos Unmanned Systems Division, said, “Kratos Unmanned is excited to extend its unparalleled experience in fielding unmanned systems for air, land, and sea applications further into the unmanned surface vessel domain. KUSD has a unique combination of expertise in the design, engineering, integration, and manufacturing of affordable unmanned system components, which will bring innovative, responsive, and best-value solutions to FoS customers.” Kratos Unmanned Systems Division is a leading provider of high performance unmanned aerial drone and target systems for threat representative target missions to exercise weapon, radar, and other systems; and tactical aerial drone systems for strike/ISR and force multiplication missions. About Kratos Defense & Security Solutions Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) develops and fields transformative, affordable technology, platforms and systems for United States National Security related customers, allies and commercial enterprises. Kratos is changing the way breakthrough technology for these industries are rapidly brought to market through proven commercial and venture capital backed approaches, including proactive research and streamlined development processes. Kratos specializes in unmanned systems, satellite communications, cyber security/warfare, microwave electronics, missile defense, hypersonic systems, training, combat systems and next generation turbo jet and turbo fan engine development. For more information go to www.KratosDefense.com. Notice Regarding Forward-Looking Statements Certain statements in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of the management of Kratos and are subject to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and Kratos undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Although Kratos believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Kratos in general, see the risk disclosures in the Annual Report on Form 10-K of Kratos for the year ended December 29, 2019, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the SEC by Kratos. Press Contact: Yolanda White 858-812-7302 Direct Investor Information: 877-934-4687 investor@kratosdefense.com View source version on GlobeNewswire: http://www.globenewswire.com/news-release/2020/04/16/2017266/0/en/Kratos-Wins-Place-on-U-S-Navy-Unmanned-Surface-Vehicle-Family-of-Systems-in-982-1-Million-IDIQ-Multiple-Award-Contract.html

Guy Norris As the airframers go, so goes the aircraft engine industry. After spending most of the past decade accelerating production to keep pace with unprecedented airliner delivery rates the engine makers have spent the past month in reverse thrust. But as production lines slow, and in some cases come to a full stop, the grim guessing game about the industry's post-COVID-19 pandemic future can begin. For every engine company, anchored midway between their own supply chains and Airbus, Boeing and Embraer in particular, all scenarios paint a bleak picture and the potential impact of the virus-triggered crisis is alarming on at least three key levels. Near term, all must weather the storm and rapidly shrink capacity by 40% or even more to match the new realities of the slower airframe production rates now expected for the next couple of years. Second, having long since focused the core of their business models on the aftermarket, they must adjust to significantly lower revenues from a near term reduction in demand for maintenance, repair and overhaul (MRO) services. Third, with nearly all their resources dedicated to survival, reduced revenues and spending trimmed, development of new engines and propulsion technology is expected to slow significantly—at least in the near term. However, all the manufacturers know that in the mid-to-longer term the environmental pressures on performance will return and so will the relentless demand for lower emissions and greater innovation. Already committed programs will therefore continue, albeit potentially stretched over longer test and development schedules. From a volume perspective, GE Aviation and Safran's CFM joint venture is expected to see the greatest change. Having delivered 1,736 LEAP-1s and 391 CFM56-5/7s in 2019, output from the combined French and U.S. operations will decline significantly in 2020 in lockstep with urgent reductions in production at Airbus and Boeing. CFM, which was previously on track towards a planned annual production rate of more than 2,000 LEAP-1s by the end of 2020, cannot comment on numbers while its parent companies remain in a dark period prior to earnings calls at the end of April, but is expected to slash this target by around half. GE Aviation, which was already expecting a leaner 2020 before the COVID-19 pandemic because of delays to the GE9X-powered Boeing 777-9 and slow-downs to the GE90-115/GEnx-1 powered 777-200LR/300ER and 787 programs, is eyeing the even more troubling impact of the crisis on its aftermarket business. Although around a quarter of GE Aviation's revenues come from its military and other businesses, just 30% comes from commercial engine sales. A much larger portion of its revenue—approximately 45%—comes from MRO services. While some programs, like the CFM56 for the P-8 maritime patrol aircraft as well as military fighter engine efforts, will continue much as before, the company has already taken drastic action to stem losses by furloughing half of its engine manufacturing workers for four weeks. This move, taken in early April, followed an announcement in late March that it was reducing its workforce by 10% (around 2,500 employees), in direct response to the collapse of its MRO workload which the company estimates will be down by around 50% through mid-year at least. However, given the exodus of around two-thirds of the world's airline fleets into storage (almost 17,000 aircraft), the short to medium outlook for engine MRO would be described as dire at best. Compounding the issue for many of the OEMs is that the higher value aftermarket engines powering the widebody fleet, particularly the older generation Airbus and Boeing models, now look increasingly unlikely to ever return to service—at least in their existing guise. For Rolls-Royce, this problem is particularly acute as the UK engine maker focused increasingly on the widebody market over the past decade, widening its exposure to reliance on the support revenue from aftermarket work on older fleets of 747 and 777s as well as older A330s. With full-time premature retirement a possibility, including the previously unthinkable sunsetting of relatively young Trent 900-powered A380s as well as the rapid decline of the RB211-535 powered 757 and Trent 500-powered A340-600 fleets, the company can no longer bank on the expected rebound in deferred maintenance coming out of the crisis. Rolls has also rushed to mitigate losses by enacting measures aimed at saving at least £750 million ($937 million) in cash this year. These include a 10% salary cut for the global workforce and canceling dividend payments. Further moves are expected as the company adjusts to rate reductions announced by Airbus involving the Trent-powered A330no and A350-900/1000, as well as yet-to-be announced rate cuts for the Trent 1000-powered 787 which will shortly be revealed in detail by Boeing. Pratt & Whitney, now part of Raytheon Technologies, is similarly impacted across the board with production of the PW1000G geared turbofan reduced for the A220/A320neo families and commercial revenues hit by falling aftermarket revenues for the PW2000/PW4000 and V2500. Measures such as 10% pay cuts through year-end, as well as furloughs, are being introduced while research and development spending is being frozen. Deliveries of military engines, in particular the F135 for the F-35 fighter and PW4000 for the KC-45A tanker remain unaffected. The early retirements of the PW4000, as well as some CF6-powered fleets, is also significantly impacting revenues for German engine maker MTU. https://aviationweek.com/air-transport/aircraft-propulsion/daily-memo-powering-down

Sean Broderick What will it take to get parked aircraft back into service? Air Transport and Safety Editor Sean Broderick responds: Airlines are consulting with aircraft and engine original equipment manufacturers (OEM) for specific guidance, because most maintenance manuals do not cover how to idle aircraft/engines for a short period of time (30-90 days). Typical maintenance manuals' procedures for parking aircraft are focused on long-term storage, which most airlines aren't doing, because they plan to reactivate their fleets as soon as possible, with the exception of aircraft they might retire. Once these procedures are in hand, it's about having technical manpower that is able to follow a task card and operate aircraft systems. Some supplier opportunities exist—engine covers are hard to find, for instance, so operators are turning to foam inserts and other options—but that is more about keeping aircraft out of service longer versus bringing them back out. Another note: Some operators are keeping aircraft on “active maintenance” programs until they understand what their fleet needs will be post-pandemic. Basically, this treats an airframe as if it's flying even though it is not. Regular maintenance intervals such as daily and weekly checks are performed, but there may be some manpower issues, especially with operators that do not have sufficient tech ops talent in-house. https://aviationweek.com/mro/what-will-it-take-get-parked-aircraft-back-service

OTTAWA — COVID-19 is presenting another challenge to Canada's long-running and tumultuous effort to buy new fighter jets. The federal government last summer launched a long-awaited competition to replace the Royal Canadian Air Force's aging CF-18s with 88 new fighter jets at an estimated cost of $19 billion. The move followed a decade of controversy and mismanagement by various governments. The three companies still in the running are supposed to submit their bids at the end of June and, despite the pandemic, the federal procurement department insisted in an email to The Canadian Press that it still expects them to meet that deadline. The three companies vying for the lucrative contract are Lockheed Martin and Boeing from the U.S. and Sweden's Saab. Lockheed Martin builds the F-35 while Boeing is pitching its Super Hornet and Saab is offering its Gripen jet. Yet while representatives for the three companies say they are likewise plugging away at their respective proposals, a senior Boeing executive left the door open to asking the government for an extension as COVID-19 forces the company to adjust how it does business. "It's challenging, there's no question about it," Jim Barnes, the Boeing executive responsible for trying to sell the company's Super Hornet jet to Canada, said in an interview on Tuesday. "We want to make sure we put the most competitive offer on the table for the government of Canada to evaluate and we feel like we can put a very compelling offer. If we feel like we don't have time to finalize that competitive offer ... we would certainly ask for an extension." The government has already approved one extension to the competition since it was launched last July. Companies were supposed to submit their final bids at the end of March, but were given three more months after Saab asked for more time. Boeing continues to work closely with the U.S. government and navy on its bid and hopes to meet the current deadline, but Barnes said the pandemic has slowed things down as many staff work from home on a complex project with significant security considerations. "Then you have to take into consideration the health of your subject-matter experts in those areas where there are just a few people that can really work up those responses," he said. "Those kinds of things we're dealing with. I'm not sure if the other teams are dealing with that, but we are monitoring that and if we feel like we can't meet the deadline, we'll certainly consider an extension request as an option." Representatives for Lockheed Martin and Saab were more confident in being able to meet the current deadline. "Lockheed Martin remains prepared to provide a comprehensive proposal for Canada's future fighter capability project competition," Lockheed Martin Canada chief executive Lorraine Ben said in a statement. "We have not requested an extension of delivery for the FFCP preliminary proposal and we are excited to share more about the F-35's ability to strengthen and modernize defence, enhance ally partnerships and contribute to economic growth in Canada." Saab Canada president Simon Carroll expressed similar sentiments, saying in an interview that while there some challenges in preparing a bid during a pandemic, "we're certainly working towards that and are planning at this point in time to submit in accordance with that deadline." Yet there are also questions about the government's ability to move ahead on the project even if the companies do get their bids in on time, given the majority of federal employees are working at home. "Those submissions are going to have a combination of sensitive and classified information, and handling all that with a workforce, the majority of which is working from home, is going to be more difficult," said defence analyst David Perry of the Canadian Global Affairs Institute. "I think as a basic bottom line, it is completely illogical to think that the impacts of COVID-19 won't be running through the entire suite of defence procurements because you can't work as efficiently with a huge chunk of your workforce at home." This report by The Canadian Press was first published April 21, 2020. https://www.richmond-news.com/covid-19-latest-hurdle-in-canada-s-long-road-to-buying-new-fighter-jets-1.24121637