Defense Industrialist

Against more challenging adversaries, temper enthusiasm for returns to scale.

Ever since I was a midshipman—way back under a Navy Secretary named Lehman—pundits, analysts, and strategists have been wondering whether the US Navy’s supercarriers are too big. And so again in 2015. The new Ford-class ships are a few billion more expensive than their Nimitz predecessors, and Senate Armed Services Committee Chairman John McCain is worked up about that price. The Navy and Newport News Shipbuilding argue that the cost is merited, as the newer ships promise more sorties per hour than those in the fleet today. Even so, Sam LaGrone of USNI News reports that the “Navy is Conducting an Alternative Carrier Study”. He quotes Navy Secretary  Stackley, in testimony before McCain’s panel, telling of how the service wants to know

Read More

What accounts for two multi-industrial companies’ differing views of the attractiveness of similar subsidiaries?

I do not own shares in Sikorsky. None of my friends own shares in Sikorsky. That’s because, since 1929, United Technologies Corporation has in effect owned all the shares in Sikorsky. Indeed, the other four of the world’s five largest helicopter manufacturers are also owned by larger and somewhat diversified companies: Bell by Textron, Eurocopter by Airbus, AgustaWestland by Finmeccanica, and Vertol by Boeing. If I wanted to participate in owning a rotocraft-making enterprise, I could buy into UTC, TXT, EAD, FNC, or BA. I won’t (see below), and as we all know, UTC is now rethinking its participation in that line of business too. A sale or spin-off would then break that uniform pattern of ownership. So what determines the efficient owner of a helicopter maker—or any other company that’s half commercial manufacturer and half defense contractor?

Read More

Thornberry’s aim for agility may mean more agency, with faster-better-cheaper results.

David Ignatius thinks that the "federal government could use more agencies like DARPA”. Earlier this month in the Washington Post, he wrote that the Defense Advanced Research Projects Agency "behaves more like a Silicon Valley start-up than a bureaucracy.” Alex Haber and Jeff Jeffress similarly find the Special Operations Forces Acquisition, Technology, & Logistics Center “fundamentally different." Writing in The Hill the same week, they argued that at the SOF AT&L, the "cultural and business principles are innovative and, more importantly, exportable.” Ignatius lamented that “too often in conversations with U.S. officials, you hear explanations about why government can’t do things.” So what’s to stop all of OSD AT&L from thinking different, like DARPA and SOF AT&L? At the moment, probably plenty, but if Congressman Mac Thornberry has his way, the Congress will have another go at making program managers’ jobs and thinking easier.

Read More

Boeing and Saab’s ground-launched glide bomb is quite possibly a brilliantly cost-effective supplement to close air support.

The defense trade press has devoted a flurry of coverage over the past two days to Boeing and Saab’s announcement that it recently tested a ground-launched version of the GBU-39B Small Diameter Bomb (SDB). The 250-pound unitary is a clean replacement of the cluster munitions on the end of the M26 rocket in the M270 Multiple Launch Rocket System. With quite a few countries that own MLRSs now signatories to the Cluster Munitions Convention, many of those M26s must be scrapped—unless their warheads can be replaced with something that doesn’t potentially litter battlefields with duds. That’s the marketing pitch, though the biggest potential customer, the United States, is just fine with its future, smarter cluster bombs. What’s really interesting about this ground-launched bomb is how a treaty limitation spurred an military innovation that has nothing to do with the original political intention. For while we all argue over the A-10C, this ground-launched SDB might prove a very cost-effective supplement to close air support.

Read More

Northrop, Lockheed, or Boeing may be about to debut a radical new manufacturing technology.

The Senate Armed Services Air-Land Subcommittee will be holding a hearing next week on structure and modernization in the US Air Force. One of the issues sure to arise is the Air Force’s procurement plan for its long-planned Long-Range Strike Bomber (LRS-B). William LaPlante, assistant secretary for acquisition, last week told the House Armed Services Subcommittee on Seapower and Projection Forces that the service will "most likely" use a cost-plus approach, rather than a fixed-price agreement, when it awards a contract for the LRS-B sometime this summer. That’s intriguing; as Aaron Mehta observed last month, “the US Air Force's single biggest research program is also its most mysterious.” But for several years, we’ve repeatedly heard two things: former Defense Secretary Robert Gates had set a price-cap of $550 million per aircraft, and the design of the aircraft would not require a great technological leap forward. Thus Congresswoman Jackie Speier of California thinks the cost-plus contracting strategy means that the Air Force isn’t serious about either promise. Is that a fair assessment?

Read More

Some thoughts at the 2015 EASO seminar in Brunei.

I’m in Brunei today for the 7th annual East Asia Security Outlook (EASO) seminar, held for the Ministry of Defense by the Sultan Haji Hassanal Bolkiah Institute of Defense and Security Studies. To close the day, I was asked to deliver a talk applying our work at the Atlantic Council to the context—what do disruptive military technologies mean for small states? Or specifically, for a sultanate of half a million people on the edge of the South China Sea? How does a small state manage the threat of new technologies when they’re a threat, assimilate their potential when they might contribute to its security, and develop new ones when that’s right for the strategic situation?

Read More

Sharply different histories of two armaments industries have led to a confluence of political and commercial opportunity.

 

No doubt, as Derek Chollet wrote Tuesday on Defense One, "Ukraine’s Military Needs More Than Just Arms”. Training and organizational reform will be essential for recovering its fighting efficiency. But as we should remind Washington and Paris and Berlin, to fight Kiev does need arms. Perhaps, as the interview in Tuesday's Wall Street Journal with Saab’s Håkan Buskhe put it, Kiev is one of those new “Cost-Conscious Weapons Buyers”. Even if Washington did start selling, American arms might not be the affordable choice, and the route to delivery might not be speedy. So when Washington isn't selling (just like Paris and Berlin), it’s all the easier for Kiev to look to a new source of supply. Hence it’s no surprise that Kiev was shopping at IDEX, and on second look, it’s no surprise that Abu Dhabi increasingly has arms to sell.

Read More

The Pentagon is seeking a way through its “very challenging fiscal environment”

Last week, the attention of the defense sector turned to San Diego for AFCEA WEST. Co-hosted by the US Naval Institute and the Armed Forces Communications and Electronics Association (AFCEA), the conference convened leaders across the armed services and private industry to address the salient theme of “lower budgets and higher demands.” The three-day event featured expert panels and keynote addresses with remarks from many central figures in this conversation, such as Deputy Defense Secretary Robert Work, Former PACOM Commander Admiral Tim Keating, and Ellen Lord, the president and CEO of Textron Systems. Over the course of the conference, dialogue ranged through the Navy’s outlook on the Asia-Pacific “rebalance,” the campaign against ISIL, the military’s participation in humanitarian assistanc and disaster relief, and spotlights on big-ticket defense systems, such as directed energy weapons and unmanned systems.

Read More

Every morning’s news from Ukraine reminds us of the continued relevance of heavy armor on modern battlefields. Russian T-72s aren’t the most modern tanks, but they’re effective enough against an underprepared enemy. What’s more alarming is what’s under development to the east—Uralvagonzavod’s T-14 Armata project. In response, Poland’s Ministry of Defense is aiming to replace its own T-72s and derivatives with a new, domestically developed tank as well. Yesterday, I was in Warsaw to discuss that project at a seminar hosted for the Polish MoD by the British and Swedish Embassies. What follows is the substance of my remarks.

Read More

The UAE’s demand for rescue V-22s is a marketing triumph that recalls a procurement failure.

 

The United Arab Emirates were in, bombing northern Iraq and western Syria with their widely praised Air Force, and allowing Major Mariam al Mansouri to strike a small blow for Arab women’s rights along the way. But then the Emirates were out, after the savages known as ISIS captured, and later murdered, a downed Jordanian pilot. What happened next is remarkable. The Emirati government demanded that American V-22 tilt-rotors be moved closer to the battlefields to stand by for rescue missions. That demand is now being answered: V-22s are going to Kurdistan, and UAEAF F-16s are in Jordan to join Operation Moaz the Martyr. But the V-22 is not the US Air Force’s primary rescue aircraft, and that stark difference says a lot about the power of a basic marketing message in armaments sales, and the ongoing failure of the Pentagon’s approach to procurement.

Read More