February 17, 2012 § Leave a comment
Officials gathered in Sterling Heights on Thursday to celebrate the official opening of the Michigan Defense Center at Velocity, an economic development center in Macomb County. The Defense Center, an agency of the Michigan Economic Development Corp., connects defense industry buyers and contractors with Michigan businesses. State businesses have won more than $41 billion in defense business in the last decade, with 63% of that going to Macomb County firms.
TRW beats profit estimates, shares jump
TRW Automotive Holdings, the world’s biggest vehicle-safety equipment supplier, rose the most in 2 1/2 years after topping analysts’ profit estimates, boosted by increased auto production in North America and demand for its products.
The shares climbed 14% to $47.43 for the biggest daily gain since Aug. 4, 2009. TRW has risen 45% this year after sliding 38% in 2011.
Fourth-quarter net income doubled to $425 million, or $3.27 a share, from $204 million, or $1.56, a year earlier, Livonia-based TRW said Thursday. Excluding some items, profit was $1.84 a share, compared with the $1.55 average of seven analysts’ estimates in a Bloomberg News survey.
DTE’s net income up 12.9% for 2011
DTE Energy said Thursday its net income in 2011 rose 12.9% to $711 million, or $4.18 a share, up from $630 million, or $3.74 a share, in 2010. Operating revenues at the Detroit-based energy company, owner of the Detroit Edison electric utility, increased 4% last year to $8.9 billion from $8.6 billion.
For the fourth quarter of 2011, DTE’s net income dipped 1.3% to $150 million, or 88 cents a share, from $152 million, or 90 cents a share, in the year-ago period. Operating revenue in the fourth quarter was $2.2 billion, unchanged from the fourth quarter of 2010.
NASDAQ to delist ECD common stock
Trading of Energy Conversion Devices’ common stock on the NASDAQ Stock Market will be suspended at the opening of business on Feb. 24, the Auburn Hills-based company said Thursday.
The maker of solar laminates filed for Chapter 11 bankruptcy protection Tuesday and plans to sell its assets. ECD said its common stock may trade on the OTC Bulletin Board or the Pink OTC Markets after it is delisted by NASDAQ but that will only occur if a market maker applies to quote the company’s common stock.
Greece plan may leave it with too much debt
Current plans to save Greece from financial collapse would leave the country with debt far above the maximum level set by its international creditors, a European diplomat said Thursday.
When they tentatively agreed on more help for Greece in October, the leaders of the 17 euro countries said the country’s debt load had come down to 120% of its economic output by 2020 — the maximum they said was manageable without external support. The new level is now expected to be closer to 129%, the diplomat said.
Jobless benefits seekers at a low mark
The number of people seeking unemployment benefits fell to the lowest point in almost four years last week, the latest signal that the job market is steadily improving. Weekly applications for unemployment benefits dropped 13,000 to a seasonally adjusted 348,000, the Labor Department said Thursday.
February 17, 2012
February 15, 2012 § Leave a comment
Italy’s defense ministry has decided to buy 40 fewer F-35s, according to reports Wednesday, part of overall defense spending reductions that were probably inevitable given Europe’s economic nightmare. Italy will also cut some 30,000 troops and 10,000 defense civilians, according to Bloomberg.
The mind begins to race ahead: The Italians are scaling back their buy. The Brits are delaying another firm commitment. The Aussies are grumbling, grumbling grumbling. The F-35’s own hometown Pentagon is pushing 179 airplanes outside the future years defense plan. Can this Fellowship hold? Quantity is the key to maintaining any semblance of “affordability” for these jets — which already cost $23,557 per hour to fly, according to GAO — and each partner that scales back threatens the unit cost that much more.
If nothing else changes, the answer is probably yes, the Fellowship can hold. If Congress saves the Pentagon from “sequestration” and DoD can carry on unmolested for the next few years, it’s hard to imagine it imposing another big delay in the program — so long as it improves. If Europe avoids an economic apocalypse in which, say, Greece leaves the Euro zone or more pauper nations require costly bailouts, the Continent’s members of Club F-35 probably also can keep their overall commitments to the jet.
But our “interesting times” so far in the 21st Century never seem to repay optimism. There’s as much reason to expect Congress would come up with some kind of super-double-sequestration as a way to prod itself to do away with regular sequestration, and then fail to avoid both of them and zero out the entire budget. And another round of Euro-dithering amidst the next country’s debt crisis could break up the euro zone, taking Europe out of the defense game for 20 years. The fate of the F-35 program could be the least of our worries.
One thing Italy’s decision might definitely do in the near-term is put additional pressure on the F-35B. Italy is the only other customer for the B besides the U.S. Marine Corps, and although Secretary Panetta just gave the airplane his blessing, it’s viewed as the weakest pup of this litter. The Italian navy, like the U.S. Marine Corps, is absolutely depending on the B to keep its ability to fly fast jets at sea. When one, or both, decides to give up that aspiration, that’s how we’ll know things have gotten really, really serious.
By Philip Ewing
February 15th, 2012
February 9, 2012 § 1 Comment
Just days before the expected Feb. 13 release of President Obama’s fiscal 2013 budget, the Defense Department’s top weapons buyer sought to reassure nervous contractors that the White House will protect vital industries even as it implements major cuts in procurement and personnel spending.
Frank Kendall, acting undersecretary of Defense for acquisitions, technology and logistics, told a Monday forum at the Center for Strategic and International Studies his highest priorities include beefing up the federal acquisition workforce, strengthening the military industrial base, preserving technical superiority, and buying into only affordable and dependable programs.
He also suggested that the Pentagon might intervene to help key contractors that are struggling in the current economy. “When people see that there’s a supplier who is in trouble, or they’re in trouble themselves, they need to come let us know,” he said, according to an account in National Journal . “When they look out and see their business base eroding, or see that they’re not going to be viable for whatever reason, we need to know that. Then we can do assessments that look at whether we need to maintain competition there, whether it is a nice capability that we need to continue to support — how we might intervene.”
Fred Downey, vice president of national security at the Aerospace Industries Association, told Government Executive that “ongoing reductions in defense spending coupled with the threat of sequestration cuts are causing a great deal of concern among smaller companies in the supply chain. Many of these companies have unique capabilities that could be lost if their workflow is interrupted by cancellations and delays.” He added, “Kendall’s comments could lead to positive action to sustain critical small suppliers. We look forward to more discussion about how the Pentagon would go about executing such support.”
Alan Chvotkin, executive vice president and counsel of the Professional Services Council, which represents contractors, said the comments were “reassuring in that they demonstrate renewed attention at high levels. But a bailout, for lack of a better word, should not be counted on as a strategy by companies as the Pentagon takes steps to make sure the supply chain is not disrupted.”
Both the budget cuts now being prepared by Obama defense strategists and the additional reductions that could be mandated next year under the 2011 Budget Control Act have fueled concern about long-term dwindling of the nation’s defense-related industrial infrastructure.
House Armed Services Committee Chairman Howard “Buck” McKeon, R-Calif., sounded the alarm in January after the Pentagon released its latest strategic guidance. A fact sheet his committee released warned that “industry cannot be turned on and off like a light switch [and] requires a steady, enduring partnership that allows for innovation, expertise and growth.”
It said the Pentagon’s planned cuts would result in delays or a shutdown of production lines that would cost highly skilled manufacturing jobs.
Two defense analysts who spoke to reporters Wednesday at the Center for Strategic and Budgetary Assessments expressed similar worries. “The industrial base is not like Wal-Mart, where you can count on things being on the shelves when you walk in,” said Andrew Krepinevich, CSBA’s president. “The industrial base is a strategic asset, a weapon” that imposes enormous planning problems on potential enemies, he added, noting the British allowed their air and maritime industrial base to decline in the 1930s and again in the 1990s. “These companies trade on Wall Street, and eventually the money will go somewhere else.”
Todd Harrison, a senior fellow in budget studies at CSBA, said the number of prime defense contractors has shrunk from about 30 in the 1990s to five or so today, creating a near-monopoly in the industry. He predicted that severe cuts would prompt some companies to “get out of the defense business or consolidate, and you may see a reduction in capacity, in the number of factories.”
Kendall stressed the importance of leadership to create a cost-conscious acquisition workforce. But both defense analysts said they were skeptical that the Pentagon will succeed in its goals of achieving $60 billion over 10 years in savings through “efficiencies” in areas such as operations and maintenance. “It’s long been tried, but they don’t end up getting anywhere near what they’d hope for,” Krepinevich said.
The Pentagon’s initiative to insource more contractor work and build up the acquisition workforce, Harrison said, was a priority of former Defense Secretary Robert Gates, and might well become unworkable because of coming budget cuts. “We’re likely to see significant reductions in the DoD civilian workforce,” he said. “It’s hard to bring contractor expertise in-house when contractors have higher paying jobs.”
By Charles S. Clark
February 8, 2012
February 6, 2012 § Leave a comment
India plans to spend about $100 billion over the next 10 years to upgrade its largely Soviet-era military equipment, as Asia’s third largest economy looks to match its military power with its economic clout.
In what has been described as one of the world’s most dangerous regions, with three nuclear-armed countries bordering each other, India’s fears of the rising might of China and threats from Pakistan — along with a underdeveloped aerospace industry — have made it the world’s leading weapons importer. That makes it a lucrative market for firms such as Boeing and Dassault.
The following are some of the major modernization programs that have been announced or are planned by India’s government, taken from various Indian and international media reports.
INDIAN AIR FORCE:
Combat planes: India is jointly developing a stealth fighter with Russia, to be based on United Aircraft Corp’s Sukhoi T-50 platform. According to media reports, it will start taking delivery of about 250 such planes by 2015.
In addition, state-owned Hindustan Aeronautics Ltd is developing its own stealth aircraft, called the Advanced Medium Combat Aircraft, planned to be in service by 2025. Meanwhile, its Light Combat Aircraft (LCA) is undergoing final testing and is expected to be introduced into the Air Force soon.
Helicopters: In 2009, India invited bids for 22 combat helicopters and 15 heavy lift helicopters. Russia’s Mil Moscow Helicopter plant and U.S. Boeing submitted bids for the combat helicopters.
It was reported in Indian media late last year that Boeing’s AH-64 Apache was the front runner to win the deal for about $1.4 billion.
The country also ordered 12 AW101 helicopters, made by a unit of Finmeccanica, to be used for VIP transportation.
Cargo aircraft: In early 2008, India ordered six Lockheed Martin C-130s to be used for special operations. It also selected Boeing’s C-17 as its heavy lift transport aircraft to replace the Russian IL-76.
Ships: The Indian navy is undergoing a 15-year modernization plan. While the erstwhile Russian aircraft carrier, Gorshkov, is slated for introduction later this year, India is also building another aircraft carrier with completion due in 2013 and has plans to build another by 2017.
Up to 11 new destroyers, and 10 frigates are to be introduced, starting 2012, to replace its ageing fleet. It has also started construction on six scorpene class diesel-electric submarines and plans to have six nuclear-powered submarines in service within the next few decades.
Aircraft: The navy plans to equip its carriers with about 40 Russian Mikoyan MiG-29 combat jets, and is also developing a naval version of the LCA. It also has 12 Boeing P-8 anti submarine and reconnaissance aircraft on order.
It also plans to introduce 60 anti submarine warfare and about 50 light helicopters, apart from 120 domestically-built light helicopters.
The army plans to introduce about 250 locally built main battle tanks and about 1,650 Russian T-90 tanks by 2020. It also plans to develop and introduce 155 mm artillery guns within the next three years.
A modernization program for its soldiers, dubbed “Future Infantry Soldier As a System” is supposed to be completed by 2020. The army is also expanding along India’s eastern border with China, with plans to raise 15,000 additional troops and a new artillery division.
In addition, India is developing Agni V and VI intercontinental ballistic missiles, capable of carrying nuclear warheads for distances over 6,000 km (3,700 miles).
The army chose Eurocopter’s AS 500 for a $550 million 197 helicopter contract in 2007. This was later scrapped due to allegations of unfair field trails from a U.S. competitor.
The army plans to obtain 114 combat helicopters from Hindustan Aeronautics and has a joint requirement for about 400 light helicopters along with the air force.
By Arup Roychoudhury
February 3, 2012
December 15, 2011 § Leave a comment
Defense Secretary Leon E. Panetta paid solemn tribute on Thursday to an “independent, free and sovereign Iraq” and declared the official end to the Iraq war, formally wrapping up the U.S. military’s mission in the country after almost nine years.
“After a lot of blood spilled by Iraqis and Americans, the mission of an Iraq that could govern and secure itself has become real,” Panetta said at a ceremony held under tight security at Baghdad’s international airport. “To be sure, the cost was high — in blood and treasure for the United States, and for the Iraqi people. Those lives were not lost in vain.”
The 1:15 p.m. ceremony (5:15 a.m. in Washington) effectively ended the war two weeks earlier than was necessary under the terms of the security agreement signed by the U.S. and Iraqi governments in 2008, which stipulated that the troops must be gone by Dec. 31.
But commanders decided there was no need to keep troops in Iraq through the Christmas holidays given that talks on maintaining a U.S. presence beyond the deadline had failed. The date of the final ceremony had been kept secret for weeks, so as not to give insurgents or militias an opportunity to stage attacks.
Dignitaries and a small crowd of military personnel in fatigues gathered at a terminal in the Baghdad airport, which until now had been operated by the U.S. military. In the future, it will be overseen by the State Department, which is assuming responsibility for a massive, $6 billion civilian effort to sustain American influence in Iraq beyond the troops’ departure.
The white flag of United States Force-Iraq was carefully folded and put away, and Panetta took the podium.
“No words, no ceremony can provide full tribute to the sacrifices which have brought this day to pass,” the defense secretary said. “I’m reminded of what President Lincoln said in Gettysburg, about a different war, in a different time. His words echo through the years as we pay tribute to the fallen in this war: ‘The world will little note, nor long remember, what we say here, but it can never forget what they did here.’ ”
In his speech, Panetta singled out U.S. Ambassador James Jeffrey and Army Gen. Lloyd Austin, the commander of U.S. forces in Iraq, for overseeing the rapid withdrawal of 50,000 troops in recent months and the closure of dozens of bases.
But he paid special tribute to the more than 1 million U.S. troops who have served war duty in Iraq since 2003, including about 4,487 who were killed and some 30,000 who were wounded.
“You have done everything your nation has asked you to do and more,” he said. “You came to this ‘Land Between the Rivers’ again and again and again.You did not know whether you’d return to your loved ones.
“You will leave with great pride, lasting pride, secure in knowing that your sacrifice has helped the Iraqi people begin a new chapter in history free from tyranny and full of hope for prosperity and peace.”
Panetta also paid homage to military families who, “through deployment after deployment after deployment … withstood the strain, the sacrifice and the heartbreak of watching their loved ones go off to war.”
“Together with the Iraqi people,” he added, “the United States welcomes the next stage in U.S.-Iraqi relations.”
And with that, the U.S. military’s mission was declared over, eight years, eight months and 25 days after it began.
Panetta arrived in Baghdad after a two-day stop to visit troops in Afghanistan. He was making his first visit to Iraq since becoming defense secretary in July, although he also visited the country during his tenure as CIA director and prior to that as a member of the Iraq Study Group, an advisory panel of foreign policy veterans that sought to change the Bush administration’s approach to the war.
In recent days, during visits to Djibouti and Afghanistan, Panetta refrained from declaring victory in Iraq or “mission accomplished,” as the Bush administration did prematurely in 2003. Instead, he has acknowledged divisions and regrets among U.S. lawmakers and the American people in general, while trying to frame Iraq’s future in a guarded sense of optimism.
“In many ways I think we can all take some satisfaction — regardless of whether you are for or against how we got into Iraq, the fact is we can take some satisfaction in the fact that we are now heading them in the right direction,” Panetta told an audience of U.S. diplomats Wednesday at the U.S. Embassy in Kabul.
In the end, Panetta described the purpose of the war as an attempt to turn Iraq into a stable, self-governing democracy after decades of dictatorship under Saddam Hussein. During his trip to Afghanistan, he did not name Hussein directly and made no mention of the failed search for weapons of mass destruction, which the Bush administration had cited as justification for the 2003 invasion.
“It’s a mission whose goal was to establish an Iraq that could govern and secure itself,” Panetta said Wednesday. “And we have done that. We are giving Iraq an opportunity to be able to govern itself and to secure itself into the future, and to enjoy, hopefully, the benefits of a democracy.”
“It won’t be easy. There will be challenges. They’ll face the challenges of terrorism. They’ll face the challenges of those that would want to divide that country. They’ll face the challenges, the test of democracy,” he said. “They have the opportunity to be able to do that. And because of the blood that was spilled by Americans, because of the blood that was spilled by Iraqis, they now have that chance.”
Many Iraqis still find it hard to believe that the U.S. troops are actually leaving, after a war in which more than 100,000 Iraqi lives were lost and more than $800 billion was spent by U.S. taxpayers on the military effort and reconstruction. At the war’s peak in 2007, there were 170,000 U.S soldiers in Iraq, although that number had dwindled to 50,000 over the past year
The withdrawal will have little immediate impact on the lives of most Iraqis. U.S. troops pulled out of the cities in 2009 and halted combat operations a year later. For more than a year, they have been training the Iraqi security forces on military bases, largely out of public sight, although Special Forces have continued to conduct counterterrorism operations.
Many Iraqis were unaware that the departure was imminent, although in recent days, the domestic press has been speculating that it might take place sooner than anticipated.
On Wednesday, thousands of people in the mostly Sunni town of Fallujah, where Marines fought the biggest battle of the war in 2004, took to the streets to celebrate. They burned American and Israeli flags, and carried a banner declaring Fallujah to be “the city of resistance.”
Some residents, nevertheless, expressed misgivings, even as they said they were glad to see the Americans go. Bashar al-Nadeq, 32, said he could not help but be happy because he spent two years in the Camp Bucca prison camp after a cousin to whom he owed money told the U.S. military that he was a terrorist.
But he fears simmering sectarian tensions could erupt in violence once again, and he does not plan to celebrate.
“What’s the point of lighting a candle at the beginning of a tunnel when you know you will be walking in darkness?” he said at his car wash, near the center of the battle-scarred town. “I am happy they are going, but I know my happiness won’t last for long.”
By Liz Sly and Craig Whitlock
December 15, 2011
December 1, 2011 § Leave a comment
An AvWeek headline this week posed a question that once had an easy, one-word answer: No.
The question was, per David A. Fulghum and Bill Sweetman: “Are there alternatives to the F-35 program?” But in post-super committee America, where the Air Force daydreams about growing its fleet with a service-life extension program for the Wright Flyer , things aren’t as clear cut as they used to be.
Back in the old days we used to say, c’mon, there’s just too much riding on this to seriously contemplate it going away. It’s the largest defense program in history. It’s the future of fast-jet flying for three U.S. military services and a host of international clients. It’s got an economic footprint across the country. All the right people in Washington have a stake in pressing forward, even as its schedule slides and its costs creep up.
Problem is, Washington does strange things. Difficult as it was to believe the capital would trap itself in a “Guns of August” crisis of process, that is what has happened: Congressional deadlock lit a slow fuse set to burn until early 2013, when a budgetary detonation could obliterate nearly $1 trillion in planned DoD spending growth over the next 10 years. The Pentagon, having shut its eyes and plugged its ears in hopes that would banish this monster, made no plans for what to do in exactly the scenario that has materialized.
The White House doesn’t want this bomb to go off, but under the bizarre logic of the moment, it has vowed to stop Congress from blowing out the fuse, in hopes that its continued burn will motivate lawmakers to get the kind of deal they couldn’t to begin with — which set the whole thing in motion in the first place. Plus there’s a nice little sideshow this week in which the Democratic president is in a showdown with the Democratically controlled Senate over detainee provisions in the defense bill.
So in other words, things that may have once made sense now don’t. All the reasons the F-35 was guaranteed to survive may no longer apply. Secretary Panetta himself dangled the program over the hotel balcony in his warning to Senate lawmakers about what might go away under sequestration. There are no brakes on this thing. At one point, we were supposed to get a thoughtful, soup-to-nuts strategic review that would show the way toward a new defense posture for Austerity America, but nope, nothin’ yet. Maybe this lack of any clear way forward is why people keep using the word “decline.”
Strictly speaking, the answer to Fulghum and Sweetman’s question probably still is “no,” in the sense that DoD can’t just whip up another advanced fifth-generation fighter for U.S. and international militaries. There is a school of thought that it doesn’t need to — that upgraded versions of today’s F-16s and F/A-18s can do just fine for the medium term. The international clients would be screwed, especially the British and Italian navies, but the way Europe’s economy is headed these days, buying new fighter jets might be least of their worries.
If the F-35 went away, Lockheed Martin would be devastated, but it would probably survive — it makes a lot of other stuff — though tens of thousands of people would be out of work in Texas, California and many other places around the country. Many of the jets in the arsenal today might end up as static displays, guarding the gates of Air Force bases. Others would go to the boneyard. For the record, the Smithsonian’s National Air and Space Museum already has an early F-35 in its collection.
With or without the F-35, it’s difficult to imagine how the services would cope post-sequestration, because it’s hard to sift through all of this fall’s warnings and melodrama and determine what was real and what was tosh. One thing is clear, though: Although canceling the F-35 might save DoD money, it would not eliminate the Pentagon’s need for a brand-new airplane. At some point, even the newest-model Vipers and Super Hornets will wear out, and even the austerity military of tomorrow will conclude that it can’t just keep upgrading airplanes first designed in the 1970s.
Maybe by the time that happens, America will be flush again and it can afford to try to salvage the “Joint Strike Fighter” concept, or maybe it will start from scratch with a brand-new airplane. (If, aerospace industry advocates would jump in here, there are any companies around that could do the job.) Or maybe, knowing us Americans, the Pentagon and Congress of that era will repeat the exact same mistakes they made in our era and foul up another attempt at a new joint program.
Is it worth the risk to save money now? Or should DoD try to protect the F-35 no matter what, given its long-term importance? What do you think?
By Philip Ewing
Wednesday, November 30th, 2011
November 29, 2011 § Leave a comment
Kratos Partners With AlienVault to Enhance Cyber Security and Situational Awareness in Satellite Communications
Kratos Defense & Security Solutions, Inc., a leading National Security Solutions provider, announced today that its RT Logic subsidiary has entered into an exclusive partnership with AlienVault to design, develop and deliver new cyber security solutions for the Satellite Communications (SATCOM) industry. The goal is to help defense, government and commercial satellite operators significantly improve their cyber situational awareness, threat management, incident response and to more readily comply with DIACAP, SEC and other government regulations.
Under the terms of the agreement, the two companies will integrate their respective technologies to develop products and solutions targeting the SATCOM sector. The disparate nature of many SATCOM systems and devices presents unique security challenges for mission and network specialists. The two companies will combine their expertise to address these challenges and to ease the burden of compliance requirements that are proliferating in an increasingly hostile cyber environment. RT Logic will exclusively market those solutions within the SATCOM industry.
“RT Logic’s commercial-based signal processing systems combined with AlienVault’s Unified SIEM address a critical hole in the SATCOM sector associated with threat management and compliance issues,” said John Monahan, President of RT Logic. “This partnership reinforces Kratos’ commitment to providing our defense, government and commercial customers with the systems and solutions they need to meet their situational awareness and risk mitigation requirements.”
“We are excited about the opportunity to partner with RT Logic to offer joint customers a solution that enhances their security posture,” said Dominique Karg, AlienVault’s CTO. “AlienVault and RT Logic are both leaders in our respective markets and together we will work to develop solutions that will act as the strategic points of control to add security and optimize services as customers scale their overall IT infrastructure. AlienVault’s collaboration with RT Logic will help us expand the capabilities of our solutions and deliver enhanced value for the satellite industry.”
RT Logic, a subsidiary of Kratos, is a world leader in the design, engineering, manufacturing and deployment of systems and subsystems supporting ground-to-space and ground-to-air communication links. RT Logic’s primary customers include leading defense contractors, the U.S. military and its allies. RT Logic products have supported over 80 percent of the nation’s space missions from factory test, to launch, to on-orbit operation.
Kratos is a leading provider of IT infrastructure management and situational awareness solutions that assure the availability, reliability and security of mission-critical information technology (IT), network and communications infrastructure.
AlienVault is the developer of advanced cyber security products including the AlienVault Unified SIEM Solution, a complete Security Integration and Event Management (SIEM) platform that unifies management of critical security systems and processes across the network, including Vulnerability Scanning for Asset Management as well as Wireless, Network and Host IDS for attack detection. AlienVault products are used by customers including the U.S. Army, NASA, AT&T, Telefonica, Citi Bank and many other security-conscious organizations across all sectors.
November 29, 2011