Defense Firms Hide Many Flaws Behind Solid Financial Metrics
- While discussing their annual Top-Performing Companies (TPC) study, AviationWeek and PWC echo concerns voiced here at DID last month:
“Another troubling sign is that half of the world’s 10 highest-ranked defense-oriented operating units saw defense-related revenues decline. Profit growth in the face of flat or declining revenue is all but unsustainable, and so the issue for prime contractors is where to find – or how to create – a new or improved engine for revenue growth.”
- The GAO reminds the rest of the federal government that regardless of its support for alternative jet fuels, “long-term commercial viability hinges on market factors.” The US Department of Defense, mostly through the Air Force and more recently the Navy, is keen to use alternative fuels to increase energy independence. But are they fully factoring in the likely impact on global food prices of mass fuel production from crops, and their second-order effects on global security? This debate seems to have faded away before it was truly settled.
- The US Coast Guard is organizing an industry day on June 5 in Washington, DC to discuss a broad range of requirements coming in FY15.
- The Idaho National Laboratory awarded contracts to Real Time Logic, L-3 Communications, Cubic, BAE and Rockwell Collins for the first phase of a program to make the Common Data Link (CDL) available for small UAS such as the Small Tactical Unmanned Aircraft System (STUAS).
Does Putin Mean It (This Time)?
- Does Vladimir Putin really mean to help cool down the increasingly chaotic situation in eastern Ukraine? Actions will matter more than words. In the meantime: Putin’s statement | Reuters | The Economist.
- KyivPost: Parubiy says anti-terrorist operation will continue as separatists in Luhansk, Donetsk reject Putin’s call to postpone referendum.
DoD All Hat, No Cattle On PBLs
- US defense acquisition chief Frank Kendall would like to use more Performance Based Logistics (PBL) contracts but significant bottlenecks stand in the way. The acquisition workforce doesn’t necessary know or want to deal with the extra complexity, and the government doesn’t like to commit itself to multi-year contracts. But the idea that new competitors are going to sprout out of the ether to provide parts for complex weapons systems is ludicrous, so that fear of commitment is not leading to actual increased competition.
JSF in Europe
- Members of Italy’s lower chamber defense committee voted to recommend cutting Italy’s JSF buy in half. This is not a binding nor unanimous vote, but it is coming from parliamentarians from Prime Minister Matteo Renzi’s Pd party. Defense minister Roberta Pinotti said two months ago the program would be “rethought, reviewed, and reduced” and she can’t just shrug off the political pressure to curtail it. Reuters | Il Secolo XIX [in Italian].
- Today’s video shows BAE Systems’ F-35 assembly line in Samlesbury, England, improved 2 years ago so that it operates similarly to automotive plants rather than traditional aerospace workshops: