Archive: January 27, 2023

Warren to FTC: Block L3Harris-Aerojet deal, undo Northrop-Orbital ATK

WASHINGTON ― Sen. Elizabeth Warren, an outspoken critic of corporate consolidation, wrote Friday to the Federal Trade Commission to urge it to oppose L3Harris Technologies’ $4.7 billion bid to buy Aerojet Rocketdyne.

“This deal between Aerojet and L3Harris would reduce competition in the shrinking defense industry to a new low, and I encourage the FTC to oppose this dangerous transaction,” Warren, D-Mass., wrote in a letter to FTC Chair Lina Khan as well as Commissioners Kelly Slaughter and Alvaro Bedoya, who are Democrats.

Warren also urged the agency, which screens for potential antitrust violations, to unwind Northrop Grumman’s 2018 purchase of Orbital ATK, one of just two suppliers of solid rocket motors along with Aerojet Rocketdyne. Such a move would “make the industry more competitive, Warren said.

If allowing the Orbital ATK deal spurred other companies to consolidate, “the remedy is not to approve yet another acquisition that would reduce competition,” Warren said.

The FTC, in allowing Northrop Grumman’s $7.8 billion acquisition of Orbital ATK, sought to address anticompetition concerns by requiring behavioral remedies. Since 2019, the FTC has been probing “a potential issue” with Northrop’s compliance with those remedies, according to the company’s filings.

Warren in her letter called on the FTC to discuss any findings and legal action under consideration.

The FTC last year sued to block defense giant Lockheed Martin’s effort to buy Aerojet due to concerns it would hurt competition in the defense industry.

Pentagon worried about mergers, especially among hypersonic weapons suppliers

Warren, who vocally opposed that deal before it was scuttled, noted the FTC’s opposition then was because the new entity would have had the incentive to raise costs for rival firms. The L3Harris-Aerojet combination, she said, “would present similar threats to competition and national security.”

She noted Lockheed, Raytheon, and Boeing are all dependent on products only Aerojet is able to produce. If L3Harris were to own Aerojet, it would be in a position to force other companies to buy its other products, she said.

“This lack of competition in solid rocket motors represents a national-security threat,” she said.

The letter pointed to broader consolidation within the defense industrial base, “from a competitive market with over 50 firms to an oligopoly of five massive rivals,” and quoted a 2022 Pentagon industrial base study’s concern that insufficient competition will lead to shortfalls in capacity.

Warren cast the evolution of L-3 Communications into L3Harris Technologies, which involved the combination of more than 30 companies over 20 years, as “evidence of anticompetitive intent, and its acquisition of the last remaining independent U.S. supplier of missile propulsion systems must be viewed in that context.”

“L3Harris’s acquisition of Aerojet defines anticompetitive enhanced market power and would adversely affect customers, including reduced product quality, reduced product variety, reduced service, and diminished innovation,” Warren wrote. “In this case, the ‘customer’ is the American people and the Department of Defense.”

Italy taps local defense companies to work on next-gen warplane

ROME — Italy has signed a deal with its leading defense firms for the development of the Global Combat Air Programme (GCAP) aimed at producing a new sixth-generation fighter with the U.K. and Japan by 2035.

The contract signed by the Italian ministry of defense with four firms – Leonardo, Elettronica, Avio Aero and MBDA Italia – envisages support for the program’s “concept and assessment phase and related demonstration activities,” the companies said in a joint statement.

Without giving the value of the deal, the firms said they would team with universities, research centers, small firms and start-ups, under the guidance of the ministry.

The GCAP program is an evolution of the UK-led Tempest program which Japan signed up to as a partner in December, while the role of former Tempest partner Sweden is now uncertain.

“With the launch of this new phase of the GCAP program, we are developing a plan for technology and industry that will move Italy’s technology sector from the Typhoon era, the last major European combat air development programe, into a new era of combat air underpinned by sixth-generation capabilities,” said Enzo Benigni, chairman and CEO of Elettronica.

Italy’s defense budget in 2022 contained €220 million ($239 million) for the Tempest program, and planners predicted Rome would spend €3.8 billion on it between now and the mid-2030s.

The statement from the companies said: “In support of the GCAP program, Italy has already earmarked 6 billion Euros for investment in research and development.”

Last month, Italian defense minister Guido Crosetto said Italy would insist on an equal share of the program with the U.K. and Japan.

Crosetto told an Italian parliamentary commission on Wednesday he was pushing for Italy to be able to exclude defense spending from European Union budget deficit rules to allow budgets to rise in order to cover the costs of supporting Ukraine’s war effort.

Italy has so far contributed equipment worth one billion euros and is about to dispatch a Samp-T air defense battery, one of five it operates.

Crosetto, a former head of Italy’s defense industry association, also proposed three-year defense budgets for Italy, up from the annual budgets now produced, in order to give greater funding stability to programs.

Elbit to open service center for DIRCM on NATO transport aircraft

JERUSALEM — Elbit Systems this week announced it has signed a five-year contract with NATO’s Support and Procurement Agency to establish a service center for the Direct Infrared Counter Measures mounted on transport aircraft.

The company said the contract provides for support and logistics to the DIRCM system, which has been installed on NATO’s Multinational Multi-Role Tanker Transport aircraft fleet. The system protects aircraft against ground-to-air missiles.

NATO is the second customer to be equipped with these maintenance capabilities, a company spokesperson said. Elbit declined to provide a value for the contract or say name the other customer for this type of service contract.

Israeli defense companies frequently opt not to identify their customers due to security and other reasons.

According to the company, the service center at NSPA’s facility in Luxembourg will be “equipped to provide comprehensive support to the NATO MRTT fleet equipped with the DIRCM system.”

”The center will provide repair, spare parts and maintenance services to ensure that all systems are operating at optimal levels,” the company said.

Elbit signed its first contract with NSPA in May 2017 for the protection of the first two MRTTs of NATO.

This is the 10th system that will be delivered to this customer. Seven of the systems have already been “integrated, certified and operational on NATO MRTTs,” the company said. “The laser-based fully autonomous system provides comprehensive protection against advanced heat-seeking ground-to-air missiles.”

A company source also noted Elbit expects “this contract will lead additional customers in NATO to [be] equipped with our DIRCM SPS and the Maintenance Centre in Luxembourg will support this future growth of additional systems.”

Overmatch secrecy needed as China, Russia surveil US Navy, experts say

WASHINGTON — The thick fog of secrecy encircling the U.S. Navy’s Project Overmatch is still needed to keep rival nations including China and Russia off-balance, unable to discern from afar how the service is readying for future large-scale conflicts, according to a pair of experts.

Speaking at a Defense News event Jan. 26, Bryan Clark, a senior fellow and director of the Center for Defense Concepts and Technology at the Hudson Institute, and Bill Drexel, an associate fellow of technology and national security at the Center for a New American Security, said the clandestine approach that has shrouded the project since its inception in late 2020 is purposeful, however frustrating it may be to outside observers.

“A large part of it is this idea that decision advantage does depend on what you think you’re going to be combining together, how you manage the communication network,” Clark said. “And getting too much into the details of that would provide information that China could use to try to take that network apart.”

Project Overmatch is the Navy’s contribution to Joint All-Domain Command and Control, or JADC2, the Pentagon’s multibillion-dollar push to connect disparate databases and forces across land, air, sea, space and cyber. By doing so, defense officials say, the U.S. will be able to better address foreign aggression.

China is attempting to counteract JADC2 with what has been dubbed Multi-Domain Precision Warfare, or MDPW, an effort to interlink command and control, intelligence, surveillance and reconnaissance and more to quickly coordinate firepower and exploit weakness.

US Navy sharing Project Overmatch insights with international allies

“It’s a stated high-priority target of both the Chinese and Russian military doctrine. So, I’m pretty glad that it’s secret,” Drexel said Thursday. “I suspect the kind of stitching everything together, particularly, is what the Chinese, the Russians, would love to know.”

The Navy plans to deploy a carrier strike group with products of Project Overmatch, namely advanced networking capabilities, later this year.

Rear Adm. Doug Small, who leads both Naval Information Warfare Systems Command and is spearheading Project Overmatch, in a November interview described the milestone as the “starting gun.” Additional deployments on additional strike groups are expected to follow.

“When you think of this systems warfare approach, they see our command, control and communications architecture as being our linchpin and our greatest vulnerability,” Clark said. “Revealing too much about Project Overmatch might give clues that an adversary could use.”

The Navy sought $195 million for Project Overmatch in fiscal 2023, a 167% increase over the $73 million it received in 2022.

US Space Command’s Shaw sees need for rapid, responsive launch

Chantilly, Va. — A senior U.S. Space Command official sees an increasing need for a rapid launch capability as threats from adversaries like China and Russia put on-orbit assets at risk.

Lt. Gen. John Shaw, deputy commander of SPACECOM, told C4ISRNET this week there’s a growing need for on-demand launch capabilities that can be leveraged to replace or augment satellites, a concept referred to as tactically responsive space.

“When we look across our mission set and how we think we will need to be doing operations in the future, one hindrance to all that is that it takes a long time to put something on orbit,” Shaw said in a Jan. 24 interview. “We want to be more responsive. We can’t wait years to respond.”

The Space Force has been crafting an acquisition strategy for tactically responsive space and is planning a demonstration later this year. For that mission, dubbed “Victus Nox,” the service is working with Millennium Space Systems to produce and deliver a satellite in just eight months and Firefly Aerospace to launch it with just 24 hours of notice.

The mission follows a 2021 demonstration in which Northrop Grumman’s air-launched Pegasus XL rocket carried a Space Force satellite to orbit with a 21-day call-up period.

Shaw said he’s encouraged by the growth in the commercial launch and small satellite industries and their potential to support a faster development and launch cadence. He pointed to rocket reusability and the ability to produce small spacecraft more quickly as encouraging signs.

“We have reusable launchers that are cheaper. We’re finding ways as a nation to make satellites faster and smaller,” he said. “All of these changes in our space industry are spiraling us toward a more responsive capability. We’ve just got to keep pushing.”

Shaw noted that questions remain about whether industry can perform on its promises and said the Space Force should work closely with companies to makes sure their business cases can close.

Cost and contract realism is a concern for the Space Force as well, according to Frank Calvelli, the Space Force’s top acquisition official. During a Jan. 24 National Security Space Association Conference in Chantilly, Virginia, Calvelli said he plans to implement best practices from the intelligence community, which has had success in working with companies to make sure their projections are executable.

Pentagon’s AI chief says data labeling is key to win race with China

WASHINGTON — To best China in the increasingly competitive artificial intelligence game, the U.S. must dramatically boost its efforts to collect, label and sort mountains of data that will ultimately be used in machine-training regimens, the Pentagon’s AI czar said.

“Machine learning will not save you billets. ML will cost you billets. Why? You have to label that data,” Chief Digital and AI Officer Craig Martell said Jan. 26 at the Strategy and Warfare Center Symposium in Colorado. “If we’re going to beat China, and we have to beat China in AI, we have to find a way to label at scale. Because if we don’t label at scale, we’re not going to win.”

Systems or equipment with pattern-recognition capabilities or autonomy require significant amounts of previous exposure — clean, plentiful information upon which they were taught — to actually get the job done.

The digital lifeblood can fuel navigation and target recognition, as is expected aboard the Army’s Optionally Manned Fighting Vehicle, or OMFV, as well as maintenance predictions and improved logistics. But generating the curriculum takes resources: time, data and manpower.

US Army intel office plots AI development with Project Linchpin

Martell’s post, the CDAO, was established in December 2021 with the aim of expediting and expanding integration of AI and data analytics across the Defense Department. The office hit its first full strides months later, in June, after subsuming what were the Joint AI Center, the Defense Digital Service, Advana and the chief data officer’s role.

“They saw that those four, together, actually create what I call this hierarchy of needs for data and AI,” Martell said Thursday. “Fundamentally, at the bottom, we have to get the data right. On top of that, we have to get great analytics.”

The Pentagon has for years pursued AI as a means to more quickly make more-informed decisions and to facilitate exploration where no soldier or sailor or person, generally, would dare go.

China and Russia, premier national security threats, have as well, according to U.S. officials.

“China’s not beating us because they have access to better algorithms,” said Martell, who previously worked at Lyft and LinkedIn. “They’re just going to sit in these big rooms: ‘Tank, not tank, tank, missile, not missile,’ just actually labeling data, 10 to 12 hours a day, six days a week, getting paid nothing, because they live in an autocratic state.”

More than 685 AI projects, including several tied to major weapons systems, were underway at the Defense Department as of early 2021, according to a Government Accountability Office report.

Earlier this month, the Air Force tapped Howard University for a five-year, $90 million deal in which the school will spearhead research on tactical autonomy, including manned-unmanned teaming.

Whispers about cluster munitions for Ukraine are aimed at Berlin

WASHINGTON — Following a protracted debate over battle tank donations for Ukraine that tested the unity of Kyiv’s allies, cluster munitions appear in position to fire up the next controversy.

That’s at least the plan of one European government, which wants the story out there without appearing in it. An unnamed official from said country told reporters Wednesday a request was sent to Berlin this week to re-export an unnamed number of an unnamed type of 155mm artillery cluster munitions to the war-torn country.

Yes, that’s a lot of unnamed moving parts. And officials from the purported requesting country declined to bring clarity to the matter by revealing which type of munitions they seek to give to Ukraine or how many.

It’s also news to the German defense ministry, at least, where a spokesperson told Defense News on Thursday no such request had reached the docket there.

What is known, however, is Ukrainian officials have said they want the weapons to defend against Russian infantry waves storming their positions.

Cluster munitions are banned under a UN treaty for their indiscriminate targeting and the possibility of their unexploded submunitions hurting civilians long after their use.

Russia, which is not a signatory to the treaty, used cluster munitions in attacks against the previously occupied city of Kherson in November, after losing the city to Ukrainian forces again, according to Human Rights Watch. The rounds killed and maimed Ukrainian civilians, the group said.

“Residents of Kherson survived eight months of Russian occupation, and are finally free from fear of torture, only to be subjected to new indiscriminate attacks, apparently including cluster munitions,” Belkis Wille, the group’s associate crisis and conflict director, wrote in a December 2022 article.

Germany is a signatory to the treaty that bans cluster munitions. The United States is not, but military scientists here have come up with novel ways to avoid using them since the treaty entered into force, including by way of purely kinetic, versus explosive, projectiles.

Thomas Wiegold, a military expert and journalist based in Berlin, told Defense News the Bundeswehr has long eliminated its arsenal of cluster munitions, which means the likely focus is on a series of Rheinmetall-made rounds Germany may have exported to allies before the 2010 ban took effect.

News agency AFP first ran a story about the purported push for cluster munitions late Wednesday, citing the European official as arguing the West should be more “forward-leaning” in supporting Ukraine.

“Russians have been using all sorts of weapons that are 100 times more terrible than cluster munitions,” the official said.

The official told reporters earlier any request for Germany to authorize the re-export of old, German-made cluster munitions was expected to be controversial and would result in Berlin facing similar international pressure as it did over Leopard 2 tanks.

Northrop eyes low-rate production contract for B-21 this year

WASHINGTON — Northrop Grumman expects the Air Force to award the first production contract for the B-21 Raider stealth bombers later this year.

In an earnings call with analysts Thursday, Chief Financial Officer Dave Keffer said the expected contract will be for the first of five low-rate initial production lots. The LRIP phase is scheduled to run through roughly the end of the decade, he said.

But Keffer said Northrop Grumman and the Air Force are wary of macroeconomic risks — particularly inflation, labor problems and lingering supply chain issues — and are looking for ways to make the program more efficient and manage those concerns as it moves out of the engineering and manufacturing development phase.

Northrop Grumman chief executive Kathy Warden said Wednesday the B-21 is still on track for its first flight later this year, following its “historic” rollout in December.

Warden said “unprecendented” inflation, supply chain disruptions and labor issues have raised the bomber’s cost estimates on its LRIP phase. But cost projections are still coming in below the government’s estimates, she said, and the government continues to support buying at least 100 of the advanced stealth bombers.

Northrop Grumman said in its financial filings it doesn’t see a financial loss on any of these LRIP options as “probable” — but couldn’t rule out a loss of up to $1.2 billion on one or more lots as “reasonably possible.”

Warden said a potential loss would spread out over all five lots, which would help Northrop absorb the blow.

“Inflation clearly is the primary driver there, as we think about what’s changed recently in our estimates, and we are working to mitigate those impacts,” Warden said. “We have some time as we move forward and get into production to continue to do that.”

She said the government is talking with defense firms like Northrop about ways to encourage them to invest in future capabilities, while helping industry weather the risks that come with inflation.

That could lead to less reliance on fixed-price development contracts in the future, she said. The defense industry is now “pushing back” on long-term fixed-price contracts, she said, and asking for the government to reconsider some contracts to take inflation into account.

Many government customers “now understand that shifting too much risk to industry doesn’t support that investment, nor does it deliver the capability they need in a timely fashion,” Warden said. “I expect we’re going to see less fixed-price development going forward.”

Suppliers to Northrop Grumman are also asking the company to take into account how inflation has increased their costs, Warden said. Northrop in turn passes those costs on to the government.

“Really that’s just common sense,” Warden said. “I believe that will become the norm.”

Japan launches intel satellite to watch N. Korea, disasters

TOKYO — Japan successfully launched a rocket Thursday carrying a government intelligence-gathering satellite on a mission to watch movements at military sites in North Korea and improve natural disaster response.

The H2A rocket, launched by Mitsubishi Heavy Industries, successfully lifted off from the Tanegashima Space Center in southwestern Japan, carrying the IGS-Radar 7 reconnaissance satellite as part of Tokyo’s effort to build up its military capability, citing growing threats.

The satellite later successfully entered its planned orbit, Mitsubishi Heavy said.

The Intelligence Gathering Satellite can capture images on the ground 24 hours a day and even in severe weather conditions. Japan launched the IGS program after a North Korean missile flyover of Japan in 1988 and aims to set up a network of 10 satellites to spot and provide early warning for possible missile launches. The satellites can be also used for disaster monitoring and response.

“The government will maximize the use of IGS-Radar 7 and other reconnaissance satellites to do the utmost for Japan’s national security and crisis management,” Prime Minister Fumio Kishida said in a statement Thursday as he praised the successful launch.

Kishida’s government in December adopted a new national security strategy, including possessing long-range cruise missiles as a “counterstrike” capability that breaks from the country’s exclusively self-defense-only postwar principle, citing rapid weapons advancement in China and North Korea.

Possible counterstrikes that aim to preempt enemy attacks would require significant advancement in intelligence gathering and cybersecurity capability, as well as significant assistance from Japan’s ally, the United States, experts say.

The Mitsubishi Heavy-operated, liquid-fuel H2A rocket has recorded 40 consecutive successes since a failure in 2003.

Mitsubishi Heavy and the Japan Aerospace Exploration Agency are co-developing their new flagship H3 rocket as the successor to the H2A, which is set to retire in 2024. The first launch of H3 is set for February.

Canada moves to rebuild search-and-rescue helicopter fleet

VICTORIA, British Columbia — The Canadian military will rely on parts from the former U.S. presidential helicopter fleet as well as additional airframes from contractor Leonardo as it rebuilds its search-and-rescue helicopter capability.

Canada is moving forward with a modernization program for its CH-149 Cormorant helicopters to allow them to keep flying until at least 2042.

The Royal Canadian Air Force is slated to receive the first modernized Cormorant helicopters in 2026, Department of National Defence spokesman Dan Le Bouthillier said.

The Canadian government announced Dec. 22 two contracts for what it is calling the Cormorant Mid-Life Upgrade, or CMLU. Leonardo U.K. of Yeovil, United Kingdom won a $1.16 billion Canadian (US $870 million) contract to provide the modernized helicopters, while CAE of Montreal was awarded a $78 million Canadian contract for simulation systems for the aircraft.

The project will see the CH-149 Cormorant fleet upgraded to the most advanced version of the helicopter, the AW101 612, Le Bouthillier said. That is the same model Norway has recently procured to conduct its rotary wing search-and-rescue missions.

Canada will grow its fleet from 13 to 16 helicopters. It will acquire two basic airframes from Leonardo while the RCAF will provide a third. New parts, as well as parts from Canada’s inventory of VH-71 and CH-149 components, will be used to complete the helicopters. Those parts include transmissions, landing gears and other systems.

“The CMLU upgrades include maximum use of existing components and parts from current CH-149 inventory, which includes VH-71 parts,” Le Bouthillier said.

In 2011, Canada paid $164 million Canadian to the U.S. government for nine VH-71 Presidential helicopters, which provided several hundred thousand spare parts.

The VH-71 and the CH-149 are similar variants of the AgustaWestland EH-101 helicopter. Thanks largely to requirements creep, the cost to develop and buy the presidential helicopters soared from $6.1 billion in 2005 to $11.2 billion three years later. A few months after taking office in January 2009, President Barack Obama pulled the plug on the effort, and the production run ended at nine.

Canada’s Cormorant Mid-Life Upgrade will involve modernizing navigation, communication, flight management, flight recorder, and safety systems. The program also includes improved sensor capability and in-cabin wireless communications.

As part of the Cormorant modernization program, CAE will provide the RCAF with a flight simulator to be situated in Canada. Previously, Cormorant crews have had to travel to the United Kingdom to train on simulators there.