Euronaval Brings Local Shipbuilding to the Forefront

• Herve Guillou, the new boss at French shipbuilder DCNS, is eager to get a share of Canada’s huge forthcoming naval programs, and is willing to build ships in Canada with local partners as well as transfer technologies to sweeten the deal. National Post.

• Dutch shipbuilder Damen is flaunting [Defense News] its recently-acquired French credentials at the Euronaval tradeshow in Paris. Damen’s big business challenge will be profitably overseeing all those shipyards, and welding them into a coherent strategy.

UK MOD Consolidates Military Air Traffic with Billion Pound Contract

• The UK awarded a £1.5 billion contract ($2.4B) to Aquila, a joint venture set between Thales and NATS to update and sustain military air traffic management. They’re merging what used to be about 70 contracts into a single program called Marshall, whose geographical scope extends all the way down to the Falkland Islands.

You Can Track Your F-35s, At ALIS’ Maintenance Hub

Keeping track of…

For the last 50 years, newer fighters have been sold as requiring less maintenance than their predecessors, due to technical advances. As people like Chuck Spinney and the Congressional Research Service have documented, the reverse has been true.

That decades-long defense death spiral has finally reached a point where it’s prompting musings about the collapse of American TacAir, and European countries with their small and dwindling defense budgets are also strongly affected. If the F-35 Lightning II Joint Strike Fighter was to have any hope of becoming a commercial and operational success, it needed to change that operating cost dynamic. To do that, Lockheed Martin, BAE, and the international JSF team have turned to embedded HUMS (Health & Usage Monitoring System) diagnostics. Even that probably won’t be enough, absent integration with the Autonomic Logistics Information System (ALIS) – which an IEEE paper has described as “perhaps the most advanced and comprehensive set of diagnostic, prognostic, and health management capabilities yet to be applied to an aviation platform.”

Spain Announces Procurement Revival But Reportedly Faces Poor Jet Readiness

• After years of belt-tightening by postponing procurement programs, Spain’s Defense State Secretary and former Boeing executive Pedro Argüelles announced a €10B investment plan that includes F-110 frigates and 8×8 infantry vehicles, writes La Semana [in Spanish]. Spain’s economy is starting to recover from a deep-seated post-bubble crisis, but that comes at the cost of painful adjustments [The Telegraph].

• A Spanish news website reports that according to anonymous sources within the Spanish Air Force, only 6 of its 39 Eurofighters are fully ready to fly. This will bring Schadenfreude to their German peers facing similar issues. El Confidencial Digital [in Spanish] | The Local.

Russian, US 2014 Armament Exports

• US Foreign Military Sales (FMS) reached $31.2B in FY14 (i.e. ending Sept. 30), and with additional exports handled through other mechanisms, total sales announced by the Defense Security Cooperation Agency (DSCA) reached $34.2B. That’s slightly above the previous year though back in FY12 Saudi Arabia alone accounted for close to $30B in foreign sales.

• Russia has sold $9.8B in military equipement for the first 10 months of the year, according to RIA Novosti quoting the deputy director of Russia’s Federal Service for Military-Technical Cooperation. At that pace they will probably end up behind last year’s $15.7B.

Elections in Brasil, Indonesia: Little Change Ahead For Defense?

• Indonesia’s new president Joko Widodo introduced [WSJ] what appears to be a business-friendly cabinet on balance, though political patronage remains [Sydney Morning Herald] part of the equation. Former army Chief of Staff Ryamizard Ryacudu is the new defense minister.

• Dilma Rousseff was reelected [BBC] as Brazil’s president with 51.6% of the vote, despite a lackluster first term. The business community seems to doubt she’ll be a better leader this time around on economic matters. If Brazil’s economy continues its slump, and in the absence of major external threats, more ambitious defense programs may be kept on the back-burner.

Poland Poised for Realistic but Low Profile Posture?

• Poland has adopted [Defence24] a new national security strategy, which explicitly recognizes “a risk of local and regional conflicts in direct vicinity of Poland.” The Economist profiles Ewa Kopacz, Poland’s prime minister since last month, as a pragmatic leader likely to play it safe rather than use a confrontational tone in her dealings with Russia.

• Reuters has shown pictures of charred tanks in Eastern Ukraine which several analysts thought had to be Russian.

• Slovakia will purchase 2 C-27J transport aircraft, reports the Slovak Spectator.

General Dynamics, Northrop Grumman: Flattish Revenue but Growing Order Book

• General Dynamics had basically flat Q3 2014 revenue, with total sales of $7.7B, masking a 13% drop in information systems balanced by growth of about 7% in aerospace, combat systems, and marine systems. Their total backlog reached $74.4B and has been robustly growing throughout the year, though most of that growth is unfunded.

• Like Lockheed Martin, Northrop Grumman’s Q3 sales dropped by 2% YoY to $5.9B. However their total backlog grew by 8% to $38.5B thanks to $9B in new awards (a 150% book-to-bill ratio) led by the E-2D Hawkeye.

• Raytheon’s Q3 sales declined more, with a 6.3% drop to $5.5B. That’s mitigated by $5.9B in bookings, a 1.07 book-to-bill ratio. That takes the backlog to $33.2B, one billion dollars more than a year ago.

• Boeing’s Q3 sales [PDF] grew by 7.7% to $23.8B, again thanks to commercial aircraft as Defense, Space and Security’s revenue slightly declined by $100M to $7.9B, with book-to-bill barely above 50%, and a $60B backlog for the division, or less than 15% of the company’s total backlog.

• For perspective, Apple’s free cash flow for the same quarter was $9.3B, more than what defense primes pull in *revenue*, an an order of magnitude more than their free cash flow.

• The US Air Force released a draft RFP [FBO] for the development and production of its Advanced Radar Threat System Variant 2 (ARTS-V2), a “pre-Milestone B Program to develop and field a high fidelity threat emitter for live aircrew training for anti-access/area denial environments.” They will hold an industry day on Nov. 19 at Hill AFB, UT.

• Intelsat was awarded a contract by the USAF to study the commercialization of its Satellite Control Network which could help lower costs.

Lockheed Sees Slight Revenue Decreases Continuing Into 2015

• Lockheed Martin reported Q3 2014 sales down 2% to $11.1B, a trend that they expect will continue through next year. That was reflected in all segments but Space Systems. At $76.5B, total backlog is $6.1B below where it was at the end of 2013, most of that decline being found in aeronautics. Yet they’ve delivered just 18 aircraft this quarter.

Who’s Willing to Step Up for Europe’s Defense?

• Finnish Defence Forces have started researching [Uutiset] how to replace an aging Hornet fighter fleet, for an estimated €6B. Greater air defense cooperation with Sweden could give the JAS-39E/F Gripen a “second time lucky” edge; the original JAS-39A/B Gripen lost to Boeing’s F/A-18C/D Hornet.

• Sweden has been investigating for several days sightings of “foreign underwater activity” which is a euphemism for “Russian submarine”. The Russians said maybe the Dutch confused Swedish surveillance, which the Dutch of course deny. BBC | FT.

• This reminder that we’re running our yearly readership survey is not so stealthy, but we’re blaming the Estonians for putting it there anyway. Thanks for your time and input.

• NATO would like [Navy Times] to see more US ships in the European theater, as Russia becomes more aggressive and active in the region. The USA would like to see Europe spend more and take its own defense seriously, as Russia becomes more aggressive and active in the region. That’s a tall order, when the French government can’t figure out the math [Le Monde, in French] to back up supposed savings necessary to stop its healthcare system from bleeding billions of euros every year.

• The modern Royal Navy as seen by the Daily Mirror: 22 surface combatants and assault ships, 33 admirals. You can’t fire admirals at the enemy. Well, you can, but the kinetics are really poor.