Boeing Flags Goals, Concerns For Defense Division

May 26, 2011
By Guy Norris

LOS ANGELES — The head of Boeing’s defense and space unit says robust growth in the company’s international business will help spearhead additional revenues in 2011, but warns that budget reductions and industrial base health issues are among longer-term concerns.

Speaking at the company’s investors conference, Dennis Muilenburg, president and CEO of Boeing Defense, Space and Security, says defense revenues are forecast to be as high as $33 billion against $31.9 billion in 2010. Although describing the business as “a tough defense environment right now,” he says the company is poised for a strong year on the back of major developments such as winning the KC-46A tanker contract, signing the P-8A low-rate initial production contract, and F/A-18E/F and EA-18G multiyear procurement deals.

The fastest-growing areas in the portfolio include “proprietary work, cybersecurity and rapidly expanding international business,” he notes. The international sector “was 5%, is 17% now and will grow to 25% over the next few years.”

Despite an overall reduction of around $18 billion in the fiscal 2011 U.S. defense budget, Boeing will see a $1.2 billion increase. “If you include NASA, that’s a $3 billion increase,” Muilenburg adds. However, over the next five years, the company anticipates seeing an overall defense budget reduction of $78 billion in fiscal 2012-16. International customer growth, particularly in the Middle East and Asia, is expected to help defer this. “This environment is not a surprise to us, we’ve anticipated it,” Muilenberg asserts.

Aside from the ongoing U.S. defense drawdown and looming concern over America’s ballooning national debt, Muilenburg cites escalating energy costs, the shrinkage of the force structure and industrial base health issues as longer-term risks for the company’s defense arm. Nearer-term concerns are focused on the Ground-Based Midcourse Defense (GMD) missile program, currently being rebid, as well as the troubled Brigade Combat Team Modernization Increment 1 effort. The dwindling backlog for the C-17 military transport aircraft remains a near-term concern, though he adds “we think there are added opportunities beyond 2013.”

In terms of troubled programs that have dogged the company in recent years, such as the Australian Wedgetail and international tanker, Muilenburg says “we can clearly see the finish line.” The 737-based Wedgetail is entering service with the Royal Australian Air Force and two of the four delayed KC-767 tankers have now been delivered to Italy, he adds.

Regarding the recent loss in India for the F/A-18E/F, Muilenburg says “we still haven’t had the debrief.” However, he says, “we see India as a long-term business investment and as a long-term partner,” adding that pending C-17 and rotorcraft deals will strengthen this. In Japan, he adds that the destruction of training aircraft in the recent tsunami has accelerated procurement plans, and Boeing is confident of gaining business in the region in the near term.

Source: aviationweek.com

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L-3 Awarded Contract for C-17 Training System Program

NEW YORK, May 18, 2011 (BUSINESS WIRE) — L-3 Communications (NYSE: LLL) announced today that its Link Simulation & Training (L-3 Link) unit has been awarded a contract to operate the U.S. Air Force’s C-17 Training System (TS) program. In addition to an initial one-year award, the program includes four one-year options and an additional option for two more years of training support. The contract, which was originally awarded in November 2010, has a maximum potential value that is expected to be $976 million.

L-3 Link will operate the Air Force’s C-17 TS program as the prime contractor, combining the former stand-alone C-17 Aircrew Training System (ATS) and Maintenance Training System (MTS) programs under a single contract. The C-17 TS is the Air Force’s largest airlift transport training system.

« L-3 Link and our teammate, AAI Corporation, will provide a low-risk transition in support of both C-17 aircrew and maintenance training, » said Leonard Genna, president of L-3 Link. « Our goal throughout the life of the C-17 Training System will be to reduce overall contract costs, identify program improvement opportunities, provide innovative solutions and maximize the synergies between all areas of C-17 training operations. »

In support of the C-17 TS, L-3 Link will oversee the program management, training device modifications, courseware development, instruction and concurrency management between the training system and aircraft platform. AAI Corporation, which has operated the C-17 MTS since 1997, is responsible for maintenance training device production and modification in addition to all C-17 TS contractor logistics support. AAI will manage the C-17 maintenance training operation, while the U.S. Air Force’s Air Education and Training Command will continue to provide maintenance instruction. The C-17 TS operates 10 installations throughout the United States, including the newest C-17 installation at Royal Australian Air Force Base Amberley.

AAI Corporation and its indirect wholly owned subsidiaries, Aerosonde Pty Ltd and ESL Defence Limited design, produce and support industry-leading aerospace and defense products and services, including unmanned aircraft and ground control technologies; high-fidelity training and simulation systems; automated aerospace test and maintenance equipment; armament systems; and logistical, engineering, supply chain and operational support services. AAI is an operating unit of Textron Systems, a Textron Inc. (NYSE:TXT) company. More information is available at www.aaicorp.com.

L-3 Link Simulation & Training is a world leader in providing total training solutions for operators and maintainers across a wide range of military platforms and Air Traffic Control systems. L-3 Link’s innovative solutions provide a full spectrum of state-of-the-art training technologies, including high-fidelity immersive simulations, as well as distributed academic and interactive courseware. The company has delivered military training systems to customer locations throughout North America, Europe, Asia and the Pacific Rim. L-3 Link is headquartered in Arlington, Texas, with key bases of operation in Binghamton, N.Y.; Orlando, Fla.; Oklahoma City, Okla.; Broken Arrow, Okla.; and Phoenix, Ariz. For more information, please visit the company’s website at www.link.com.

Headquartered in New York City, L-3 Communications employs approximately 63,000 people worldwide and is a prime contractor in C3ISR (Command, Control, Communications, Intelligence, Surveillance and Reconnaissance) systems, aircraft modernization and maintenance, and government services. L-3 is also a leading provider of a broad range of electronic systems used on military and commercial platforms. The company reported 2010 sales of $15.7 billion.

To learn more about L-3, please visit the company’s website at www.L-3com.com. L-3 uses its website as a channel of distribution of material company information. Financial and other material information regarding L-3 is routinely posted on the company’s website and is readily accessible.

India’s consolation prize to US

Josy Joseph, May 18, 2011, 03.22am IST

NEW DELHI: The government is moving swiftly to mollify the American establishment that is deeply upset over rejection of both their fighter aircraft from the $10 billion MMRCA (medium multirole combat aircraft) contract for the Indian Air Force. Among the steps being taken is a decision to significantly increase the order for C-17 Globemaster-III strategic airlift aircraft from Boeing from the present projection of 10. TOI had first reported about the C-17 deal on May 13.

Besides, the Army is moving quickly to conclude a $1 billion purchase of ultra light howitzer guns in a couple of months. An Army quality assurance team is in the US for final leg of assessments.

Source: The Times of India

Pratt’s F117 Tied to Boeing C-17 Program’s Fate

NEWTOWN, Conn. — With production of Boeing’s 757 ending in 2005, the [only remaining] application for Pratt & Whitney’s PW2000/F117 is the Boeing C-17 Globemaster tactical transport.

Boeing’s best customer for the C-17 is the USAF, which has capped procurement at 223 aircraft in the face of a very restricted budget. As a response to this move, Boeing has reduced the C-17’s build rates in an effort to stretch out production while looking for new orders.

Boeing has been aggressively marketing the C-17 to foreign air forces that can afford it, but the $220 million unit cost is limiting the potential market. A contract was signed between Boeing and the Indian Air Force for a purchase of 10 C-17s, with a possible six options. This represents the largest export order for the aircraft to date. Other potential prospects include Malaysia, Oman, Singapore, South Africa and Saudi Arabia.

In an effort to broaden the C-17’s market appeal, Boeing proposed a new version called the C-17FE. It is essentially a 1.2-meter-narrower version of the existing aircraft with enhanced use of composites to lighten the structure.

Boeing’s intent is to offer the new aircraft for the Joint Future Theater Lift program of the U.S. Air Force and U.S. Army. It is assumed the thrust requirement will be similar, and the F117 engine would carry over to the new variant.

The JFTL program is not expected to field an aircraft until the 2020-2025 timeframe.

Source: Forecast International

Pentagon Contract Announcement: Boeing

Boeing Co., Long Beach, Calif., is being awarded a $258,335,790 fixed-price-award-fee, cost-plus-award-fee contract modification for basic C-17 Globemaster III sustainment partnership.

Work will be performed at Long Beach, Calif.

The Aircraft Sustainment Directorate, Robins Air Force Base, Ga., is the contracting activity (FA8614-04-C-2004-P00543).

RAF’s new C-17 makes its first delivery to Helmand

An Equipment and Logistics news article

17 Mar 11

The RAF’s newest C-17 aircraft has completed its first operational mission to Afghanistan, delivering essential supplies to the front line.

The aircraft, which was unveiled by the Prime Minister in January this year, delivered over 25 tonnes of Hellfire missiles, rifle ammunition, aircraft spares and air conditioning units to Camp Bastion. RAF movements staff then rapidly dispatched the important cargo to British forces across Afghanistan’s Helmand province.

This latest multi-million pound aircraft brings the number of aircraft in the RAF’s C-17 fleet to seven.

The C-17’s huge capacity means it can carry loads of up to 70 tonnes – for example, three Warrior armoured vehicles or three Apache helicopters. The C-17 has the ability to deliver heavy and outsized loads into remote airfields with short and narrow runways at night using night-vision goggles – an indispensable critical capability. Its range of over 4,500 miles (7,200km) provides the RAF with global reach to support operations anywhere in the world.

The seven aircraft are operated by 99 Squadron at RAF Brize Norton in Oxfordshire.

Officer Commanding 99 Squadron, Wing Commander David Manning, said:

« It is immensely rewarding for air and ground crew of 99 Squadron to know that these crucial supplies are reaching our personnel on the front line – from ammunition for the front line soldier to take the fight to the Taliban, to aircraft spares for technicians keeping helicopters flying.

« This C-17 is already enhancing our support to the Afghanistan’s operational freight and passenger airbridge, while continuing to provide 24-hour aeromedical standby for our troops. The seventh C-17 is a welcome addition to a fleet which is in constant demand. »

Air Chief Marshal Sir Stephen Dalton, Chief of the Air Staff, said:

« The RAF’s C-17 aircraft are an incredibly capable and flexible workhorse in the RAF fleet. They form part of the critical airbridge link to Afghanistan and deliver a valuable capability to our deployed forces on the front line.

« The RAF’s seventh aircraft brings added flexibility and increased capability to our extremely hardworking air transport fleet. I am immensely proud of the outstanding contribution that all our aircraft and people are making to continued progress in Afghanistan. »

Defence set to ‘sensibly’ spend up on jet, vessel

BY DAVID ELLERY, DEFENCE REPORTER

18 Mar, 2011 04:00 AM

A Defence decision to commit its $450 million budget surplus to a fifth giant cargo jet and a near new landing ship is hard to fault, experts have said.

Defence Minister Stephen Smith confirmed yesterday his Department was to spend up to $300 million on a fifth C-17 Globemaster.

 »And today, London time, we will formally enter a bid for the purchase of a large, heavy, amphibious lift vessel, a Bay class from the United Kingdom, » he said.

The ship, believed to be the Largs Bay, is expected to sell in the lower end of the $100 million to $200 million range, with a decision on the successful bidder to be announced in mid-April.

It cost between $200 million and $300 million to build and was commissioned in December 2006.

Australian Strategic Policy Institute budget and maintenance program director Mark Thomson said both acquisitions were consistent with the Defence White Paper objectives and were prudent.

 »They take advantage of an embarrassment of riches [the Defence underspend] and the [favourable] exchange rate, » he said.

 »It is a sensible use of funds that haven’t been spent. »

Neil James, the executive director of the Australia Defence Association, agreed.

He recently described the Globemaster acquisition proposal as  »an excellent example » of the opposite of wasteful spending.

 »The decision to obtain more C-17s is based on practical experience of the aircraft’s utility. »

In addition to playing a key part in resupplying Australian troops in the field, the C-17s have been at the forefront of the Defence Force’s response to the Queensland floods, Cyclone Yasi, the Christchurch earthquake and the Japanese catastrophe.

 »[These acquisitions] display sensible flexibility as opposed to panic spending, » Mr Thomson said.

 »The Brits have had to make some painful cuts and we’ve been able to take advantage of them. »

The Largs Bay is a 16,000t landing ship that would serve two purposes.

In the short-term, the ship would plug the capability gap left by the controversial deterioration of Australia’s sea lift fleet.

HMAS Manoora has had to be decommissioned two years ahead of schedule because of the prohibitive cost of necessary repairs and the Kanimbla is out of commission because of repairs and maintenance until next year.

HMAS Tobruk, the smallest of the sea lift vessels, was not able to respond to Cyclone Yasi because of maintenance issues and, while currently ready for sea, needs major maintenance before the end of the year.

Source: Canberra Times

Elbit Systems of America Awarded Contract from the Boeing Company to Develop New Head up Displays for the U.S. Air Force C-17

FORTH WORTH, Texas, March 9, 2011 /PRNewswire via COMTEX/ —

Elbit Systems of America, LLC, a wholly owned subsidiary of Elbit Systems Ltd. has been awarded a contract from The Boeing Company for the development of the C-17 Replacement Head Up Display (« RHUD ») for the United States Air Force. The contract also contains options for Recurring Production, Depot Support and Repairs.

The C-17 provides rapid strategic delivery of troops and cargo to main operating bases as well as tactical airlift and airdrop operations within a theatre of operations. The collective efforts of Boeing and Elbit Systems of America will provide the United States Air Force with a new C-17 RHUD that will enhance the ability of the aircraft to fulfill the United States’ worldwide air mobility requirements.

With the C-17 HUD operator in mind, Elbit Systems of America has incorporated growth provisions that will provide the foundation for sensor fusion and other enhancements, to increase approach stability and pilot’s situational awareness in critical phases of flight during reduced visibility conditions. The RHUD enhancements also increase ease of maintenance, enhanced reliability and mitigation of obsolescence. The RHUD Projector Unit features an advanced optical design with a wide field of view. The design incorporates a Digital Image Source (DIS), optimizing image quality and performance across many interrelating properties. The HUD Computer Unit (CU) design includes cutting edge processing and graphic capabilities built using Elbit Systems’ history of expertise developing display electronics. The HUD CU contains a service-port to access and acquire Built-in-Test results directly from the Shop Replacement Unit level, reducing unnecessary removals. It is located in the equipment rack providing easy maintenance and access to system health parameters.

Elbit Systems of America, President and CEO, Raanan Horowitz added: « We at Elbit Systems of America are proud to have been selected to incorporate our leading HUD technology into the world’s most advanced airlift aircraft. The selection by Boeing is a testimony to our world class capabilities and dedication to supporting those who contribute daily to the safety and security of the United States. »

About Elbit Systems of America, LLC

Elbit Systems of America is a leading provider of high performance products and system solutions focusing on the commercial aviation, defense, homeland security, and medical instrumentation markets. With facilities throughout the United States, Elbit Systems of America is dedicated to supporting those who contribute daily to the safety and security of the United States. Elbit Systems of America, LLC is wholly owned by Elbit Systems Ltd. (NASDAQ and TASE: ESLT), a global electronics company engaged in a wide range of programs for innovative defense and commercial applications.

About Elbit Systems

Elbit Systems Ltd. is an international defense electronics company engaged in a wide range of programs throughout the world. The Company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance (« C4ISR »), unmanned aircraft systems (« UAS »), advanced electro-optics, electro-optic space systems, EW suites, airborne warning systems, ELINT systems, data links and military communications systems and radios. The Company also focuses on the upgrading of existing military platforms, developing new technologies for defense, homeland security and commercial aviation applications and providing a range of support services. For additional information, visit: http://www.elbitsystems.com.

DSCA notified Congress today of a possible Foreign Military Sale to Australia of a C-17 GLOBEMASTER III aircraft

WASHINGTON, March 9, 2011 – The Defense Security Cooperation Agency notified Congress today of a possible Foreign Military Sale to Australia of a C-17 GLOBEMASTER III aircraft and associated equipment, parts, training and logistical support for an estimated cost of $300 million.

The Government of Australia has requested a possible sale of one C-17 GLOBEMASTER III aircraft, up to four Pratt & Whitney F117-PW-100 engines, one AN/AAQ-24V(13) Large Aircraft Infrared Countermeasures (LAIRCM) System, spare and repair parts, supply and test equipment, personnel training and training equipment, publications and technical documentation, United States Government and contractor engineering, logistics, and technical support services, and other related elements of logistics support. The estimated cost is $300 million.

Australia is one of our most important allies in the Western Pacific. The strategic location of this political and economic power contributes significantly to ensuring peace and economic stability in the region. Australia’s efforts in operations Iraqi and Enduring Freedom, peacekeeping, and humanitarian operations have made a significant impact on regional, political, and economic stability and have served U.S. national security interests. This proposed sale is consistent with those objectives and facilitates burden sharing with our allies.

Australia currently has a heavy airlift capability comprised of four C-17As. This additional C-17 will further improve Australia’s capability to rapidly deploy in support of global coalition operations and will also greatly enhance its ability to lead regional humanitarian/peacekeeping operations such as its current response to the Queensland flooding, cyclone aftermath and the New Zealand Earthquake.

Australia has the ability to absorb and employ the additional C-17. The C-17 fleet is based at Royal Australian Air Force (RAAF) Base Amberley. RAAF Base Amberley is the primary base for airlift and tanker aircraft and is currently undergoing the infrastructure upgrades required to support the C-17 and other large aircraft Australia already received or is under contract to purchase.

The proposed sale of this equipment and support will not alter the basic military balance in the region.

The prime contractor will be the Boeing Company in Long Beach, California. There are no known offset agreements proposed in connection with this potential sale.
Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to Australia.

There will be no adverse impact on U.S. defense readiness as a result of this proposed sale. This notice of a potential sale is required by law and does not mean the sale has been concluded.

Northrop Grumman to Provide Flight-Line Security Systems for Royal Australian Air Force C-17 Aircraft

CANBERRA, Australian Capital Territory — The Australian Defence Materiel Organisation has awarded Northrop Grumman Corporation a contract to provide integrated airfield and asset protection solutions for the Royal Australian Air Force C-17 aircraft.

Northrop Grumman will deliver its Expeditionary Tactical Automated Security System (ExTASS) for the protection of the Australian C-17s while at home air stations and during expeditionary operations.

ExTASS is an implementation of the Tactical Automated Security System (TASS), deployed at more than 100 sites worldwide by the U.S. Air Force, U.S. Army and U.S. Marine Corps. Like TASS, ExTASS is an open architecture, command-and-control platform for the integration of a variety of sensors designed for force-protection missions. The system provides for real-time detection and assessment of intrusions, thus allowing immediate coordination of appropriate response. The ExTASS will be configured in a mobile trailer for quick deployment.

« This contract demonstrates the continued cooperation between the U.S. and Australia in the worldwide fight against terrorism, » said Michael Danick, programs director with the integrated command, control, communications and intelligence systems business of Northrop Grumman Information Systems sector. « We are proud to expand on our critical infrastructure and force protection capabilities to support the Australian Department of Defence. »

Northrop Grumman is a leading provider of protection systems such as ExTASS. The company is one of the prime contractors supporting the U.S. Army Counter-Rocket, Artillery and Mortar (C-RAM) program office in other related efforts such as the delivery of the C-RAM sense-and-warn capability to protect U.S. and Australian forces in Afghanistan.

Northrop Grumman has well-established relationships with Australia and other countries in the region, where it has been supporting a variety of both defence and civil programs for more than 20 years. Northrop Grumman is a key subcontractor for the Wedgetail AEW&C, F-35 Joint Strike Fighter and the FA/18 Super Hornet programs.

Northrop Grumman Corporation is a leading global security company whose 120,000 employees provide innovative systems, products, and solutions in aerospace, electronics, information systems, shipbuilding and technical services to government and commercial customers worldwide.