Deputy SecDef Clips LCS
Crazy Like a Fox
- So what has Christine Fox, a former director of the Pentagon’s cost assessment office, been up to since she was recently appointed as acting deputy defense secretary? Writing a memo to cancel a significant part of the LCS buy, it turns out. We’ll see whether this is reflected in the FY15 president budget, which may be delayed to late February or March, since they have to reflect the sequester relief emerging from Congress. Passback guidance from the Office of Management and Budget is only reaching DoD this month, instead of November in the baseline federal budget schedule.
- The Army’s Ground Combat Vehicle is another big program long known to be on the ropes that looks increasingly likely to be slashed. This won’t surprise the contractors currently involved in the program’s Engineering and Manufacturing Development (EMD) phase.
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US Congress & White House
- Contradictory news reports in past months should be settled today with an announcement from Congressman Buck McKeon [R-CA] that he won’t seek reelection, thus putting the House Armed Services Committee chairmanship up for grabs.
- The White House released Presidential Policy Directive 27 to update the US’ Conventional Arms Transfer Policy with an increased focus on human rights considerations. This replaces Presidential Decision Directive/ NSC-34 issued in 1995 by the Clinton administration.
CEO Turnover
- Thomas Kennedy [PDF] will replace William Swanson as Raytheon’s CEO, effective March 31st. Kennedy is a former USAF captain who’s been at the company for more than 30 years and is currently COO. Swanson was CEO since 2003 and will remain as Chairman. With the announcements of changes at the helm of Lockheed Martin (twice!), Boeing BDS, and the US subsidiaries of Airbus and BAE Systems, there has been quite a bit of churn among the primes in recent months.
Factors Crippling Indian Innovation
- The MoD-funded IDSA think tank published a paper [PDF] on defense innovation in India, which it concludes is “by and large underdeveloped” despite the creation of many public and private entities meant to make India more self-sufficient in that area. The lack of human capital and R&D investment appears to be one of the main bottlenecks, mirroring barriers to innovation seen in other developing economies such as most of Latin America.
Textron’s Outlook on Commercial-Defense Synergies
- Ellen Lord, CEO of Textron Systems, talked at an Atlantic Council event yesterday about defense as seen from a conglomerate also involved in the commercial sector. She would like to see more fixed costs competitions coming from DoD rather than cost-plus schemes, as well as flexibility in requirements to allow more creativity on the contractor side. Textron is investing in simulation and training, based on the assumption that pilots will have less flying hours. Lord wants to make sure offsets are done in a way that helps grow the company, as opposed to just fulfill a contractual obligation. Full video below:
