As part of the current coalition government’s defence reform efforts, the UK Ministry of Defence has begun issuing a bare-bones 10-year equipment plan of expected budgets, and graphics of planned expenditures by category. A fuller plan is submitted to Britain’s National Audit Office for review. The plan itself is a step forward, and so are some of its underlying practices. Even if the document as a whole falls short of being a useful contribution to public debate.
Summaries of some key changes, and information, can be found below.
Alan Krueger, Chairman of the Council of Economic Advisers (to the White House), on the reason why US GDP contracted by 0.1% in Q4 2012:
“Federal defense purchases declined at an annual rate of 22.2 percent in the fourth quarter of 2012, the largest quarterly decline in 40 years. A likely explanation for the sharp decline in Federal defense spending is uncertainty concerning the automatic spending cuts that were scheduled to take effect in January.”
Emphasis on “likely” is ours: you would think advisers to the executive branch of the federal government would know for sure why it is spending less in response to a budget situation that it co-authored with Congress.
Senator Hagel’s confirmation hearing with the Senate’s Armed Services Committee is unfolding today, 9:30am-noon ET. In his opening statement, new Ranking Member Jim Inhofe (R-OK) confirmed that he thought Hagel was “the wrong person” for what Inhofe characterized as a record of appeasement of the United States’ enemies. C-Span video.
Non-profit Transparency International asserts [PDF] that a vast majority of countries exert little, if any, political oversight of defense policy or scrutiny of defense procurement. Only Australia and Germany are ranked as at “very low risk” of defense-related corruption, followed by 7 low-risk countries including the US and the UK. Unsurprisingly Saudi Arabia is the worst-ranking country among major arms importers.
The Peter G. Peterson Foundation thinks the recent legislation passed in the US to avoid the fiscal cliff “does not come close to solving longer-run structural deficits, nor does it yield significant improvements to our 10-year budget outlook.” Even sequestration – which looks more likely each day – would only buy a few more years. Only taming healthcare costs can put the federal debt back to a sustainable course.
US Undersecretary of Defense Ash Carter recently acknowledged in an interview with Defense News that the Pentagon and the services had been quietly working on sequestration planning for a while (despite their repeated claims to the contrary) in order to avoid a self-fulfilling prophecy. In the end it looks like pretending to be playing ostrich did not make a difference, but this explains why they do have some amount of guidance ready, like this memo and budget presentation [PDFs] from the Navy’s Chief of Naval Operations (via Navy Times).
After some bad experiences with its up-armored Mercedes “Gelendevagen” in Afghanistan, Norway decided that they needed patrol vehicles with better protection. In 2006, therefore, they placed an order for 25 blast-resistant Iveco MLV/LMV vehicles, which are called Lynx by the Italians and Panther by the UK.
Deliveries began in 2006, and the vehicle’s performance in Afghanistan has led to additional orders over the years. A 2013 buy brings Norway’s order total to 170.
BAE will cut 300 jobs across 5 US states, two thirds of which at their Electronic Systems site in Nashua, NH, where 50 people were already laid off last year.
US AFRICOM is pondering establishing a base to operate UAVs out of a northwest African country such as Niger or Burkina Faso, according to the NYT.
DARPA is interested in cheap, disposable electronic microsystems that could be used to create large networks of sensors that would biodegrade after they have accomplished their purpose. A Proposers’ Day will take place on Feb. 14 in Arlington, VA. They call it Vanishing, Programmable Resources (VAPR) and must be commended for acknowledging they are literally working on vaporware.
India’s indigenous Arjun tank project began in 1974, and originally aimed to replace the Russian T-54 and T-72 tanks which made up the bulk of that country’s armored firepower. As has often been the case in India, its DRDO government weapons development agency sought an entirely made in India solution, even though this would require major advances on a number of fronts for Indian industry. As has often been the case in India, the result was a long and checkered history filled with development delays, performance issues, mid-project specifications changes by India’s military, and the eventual purchase of both foreign substitutions within the project (now 58% of the tank’s cost) and foreign competitors from outside it (the T-90S).
The 62.5 tonne Arjun tank wasn’t fielded with the Indian Army until May 2009. In contrast, Pakistan’s much more time-limited, scope-limited, and budget conscious approach in developing and successfully fielding its T-80UD “Al-Khalid” tank is often cited by Arjun’s detractors.
The Russian T-90S will form the mainstay of India’s future force, despite that tank’s performance issues in hot weather. That won’t change, but after beating the T-90 in a number of trials, the Arjun now has a clear future in India…
In a strong-commodity, weak-dollar/Euro world, Russia has the finances it need to replenish its badly depleted military. What it doesn’t have yet is the industrial and engineering capacity, which was lost during the state’s budgetary collapse. The Russians have been paying close attention to global trends, as evidenced by their interest in amphibious assault ships. It’s certainly hard to ignore the big global shift toward blast-resistant vehicles, especially in a state already plagued by various insurgencies within and near its borders.
In 2010, media reports began to surface that Russia was negotiating with Italy’s Iveco, with the aim of buying and license manufacturing the firm’s LMV/MLV/Lince blast resistant vehicles. Russia has little experience in this area, but rather than go with a partnership involving South African players, they targeted the higher-cost end of the global MRAP (Mine Resistant, Ambush Protected wheeled vehicle) market. Iveco’s M65 Lince has received praise for its performance in Afghanistan, while receiving orders from Italy, Austria, Belgium, Britain, Croatia, the Czech Republic, Norway, Slovakia, and Spain. At over 350 ordered vehicles, Russia’s “Rys” fleet is already one of the firm’s largest contracts – with the potential to become Iveco’s largest customer by far.
Adm. Jonathan Greenert, The US Navy’s Chief of Naval Operations, is freezing civilian hiring – like the Air Force earlier announced – and cancelling a lot of maintenance work that was scheduled between April and September (i.e. the end of the current federal fiscal year). These cuts are meant to be reversible if an appropriations bill comes to pass and sequestration is further pushed back or somehow watered down. San Diego Union-Tribune | Virginian-Pilot.
The US Senate’s Armed Services Committee will investigate the Expeditionary Combat Support System’s failed software system that the Air Force had ordered from Computer Sciences, but eventually cancelled after spending about $1B.
Raytheon’s sales for 2012 were down by 1.5% to $24.4B. However, thanks to a 1.09 book-to-bill ratio, their backlog grew by 2.4% to $36.2B, 66% of which is funded. Network Centric Systems is the division which lost most revenue in relative terms, with a 10% Y/Y decrease.
In 2012 Lockheed Martin increased its yearly sales by 1.5% to $47.2B. Growth in aeronautics compensated lost ground in information system, confirming a pattern seen for the last two years and across contractors. Total backlog reached a record $82.3B (+$1.6B from a year earlier).
General Dynamics reported its Q4 and full 2012 results. Revenue for the quarter dropped Y/Y by 11.7% to $8.08B, leading to a $2.1B loss. Revenue for the whole year reached $31.5B, down 3.6% from 2011, at a $332M loss. Combat and Information systems lost about 10% in Y/Y sales, while Aerospace grew by 15%, putting this segment ahead of a slightly decreasing Marine division. In 2011 aerospace was similarly pulling ahead of the company’s other lines of business. Total backlog (i.e. including unfunded IDIQ contracts and options) is at $78.1B, 57% of which is funded. That’s a drop of 8.5% of the total backlog, though its funded part barely budged.
United Technologies grew its topline by 4% to $57.7B in 2012 thanks to its acquisitions of Goodrich and IAE. Their military aerospace activities have been holding rather well [PDF].
The GAO notes that the Pentagon’s Militarily Critical Technologies List (MCTL), which is meant to inform export decisions, is still left unattended. Move along, there’s nothing to see here.