Thursday, July 31, 2008

Balance at Heart of New Defense Strategy, Gates Says

Balance at Heart of New Defense Strategy, Gates Says

By Jim Garamone
American Forces Press Service

WASHINGTON, July 31, 2008 – Balance is the key word of the new National Defense Strategy, Defense Secretary Robert M. Gates said during a news conference today.
Gates and Navy Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, told reporters that the U.S. military must be prepared to perform the full range of missions.

The department must be ready to wage a full-out war and handle irregular warfare and humanitarian missions, Gates said.

“Now, the reality is that conventional and strategic force modernization programs are strongly supported in the services and in the Congress,” Gates said.

The main fiscal 2009 defense budget is a concrete example of that support. It contains $104 billion in procurement and about $80 billion in research and development funding, heavily slanted toward conventional modernization programs. Funding for the irregular wars in Afghanistan, Iraq and other areas in the world has come from supplemental budgets.

“The principal challenge, therefore, is how to ensure that the capabilities gained and counterinsurgency lessons learned from Iraq and Afghanistan, as well as the lessons we learned from other places where we have engaged in irregular warfare over the last two decades, are institutionalized within the defense establishment,” Gates said.

The secretary said he does not want the military to forget the lessons that troops have learned at such a painful price. “Looking to the future, we need to find a long-term place in the base budget for [these lessons],” he said.

Conventional modernization plans certainly are important, Gates said, noting they keep the military capable of defending the homeland, deterring conflict, and -- when deterrence fails -- winning the nation’s wars. But the most obvious threat the United States faces in the coming years, he said, comes from non-state actors using asymmetric tactics.

“I firmly believe that in the years ahead, our military is much more likely to engage in asymmetric conflict than conventional conflict against a rising state power,” he said. “We must be ready for both kinds of conflict and fund the capabilities to do both.”

In the past, irregular warfare has not had the support inside or outside the Pentagon that it requires, the secretary said.

“There is no doubt in my mind that the modernization programs will continue to have strong institutional and congressional support,” he said. “I just want to make sure that the capabilities we need for the conflicts we're in and most likely to face in the foreseeable future also are sustained long term.”

House Armed Services Committee: Skelton on Our Role as the Indispensable Nation

House Armed Services Committee

Ike Skelton, Chairman

For Immediate Release: July 24, 2008

Skelton on Our Role as the Indispensable Nation

Washington, DC – House Armed Services Committee Chairman Ike Skelton (D-MO) today delivered the fourth in a series of speeches in the U.S. House of Representatives concerning the need for a comprehensive strategy to advance U.S. interests:

“Tonight, I rise to continue my series of discussions about the future of American grand strategy. Last week, I suggested that we strive to remain and even bolster our role as the world’s indispensable nation, and that should guide our thinking as we consider the imperatives that define our national interest.

“‘Indispensable nation’ is a term with significant potential for misunderstanding, particularly in this time when our global credibility has ebbed. We must be careful how we explain our intent, and more importantly, we must ensure that our actions meet our words. Just as a person cannot demand respect – only earn it - so it is for nations, too. And so, we should define “indispensable” to mean that we inspire by our standards, not coerce with our demands. We should strive to be indispensable not because our wrath is feared, but because our strength is valued. The point is – and it is a fine one, but essential nonetheless – that our role as the world’s indispensable nation cannot come by internal proclamation, but rather by external validation.

“The engines of our claim to leadership in the future are the engines that made this country great in the first place: our robust economy that provides opportunity while connecting us with the rest of the world; in productive partnerships; and our unceasing pursuit of what is right, fair, and just, even when we fall short of those ideals. To the extent we’ve veered off course in those areas, whether because of crippling energy dependence, unprecedented levels of foreign debt, our departure from sound constitutional practices, or even when and how we marshal our forces for war, we must refocus internally to address those challenges and master them once again.

“If we redouble our efforts, we can recapture the international prestige that more than anything else translates our unmatched power into the ability to alter the course of world events. As part of this course correction, we must recall the essential truths about war and international relations that were stated so well by Clausewitz and Sun Tzu. I mentioned several of these to our current President in 2002, but we lost sight of these truths in Iraq.

“As we do that, there is no reason why we cannot gain the confidence to understand that the term ‘challenge,’ even in the international context, need not always have an adversarial meaning. In our daily life, we are challenged by those around us and we come out the better for it. We are challenged by our professors to be better students. We are challenged by our coaches to be better athletes. We are challenged by our clergy to be better people and we are challenged by our spouses to be better partners. All of these relationships help refine us, and in so doing, enrich our lives so that all benefit.

“We might regard many of our international challenges in much the same way. In the free market place of ideas, are those ideas that the United States exemplify clearly superior? Do we remain the guarantor of liberty and the natural ally against tyranny? Do we provide the best economic and social opportunities for all people with whom we interact? We need not see that as solely an external challenge – it’s also a challenge within ourselves and we should not miss the opportunity to refine the good things about America so that we remain the obvious – the indispensable – choice for a continued global leadership role.”

Wednesday, July 30, 2008

QinetiQ Annual General Meeting and Interim Management Statement

30 July 08

QinetiQ Annual General Meeting and Interim Management Statement

QinetiQ Group plc ('QinetiQ'), the international defence and security technology company, is today issuing the following Interim Management Statement which covers the period from 1 April 2008 to 29 July 2008. This coincides with its Annual General Meeting which is taking place at 2.00pm today in London. At the meeting the Chairman of QinetiQ, Sir John Chisholm, will make the following statement:

Trading and financial position
The year has commenced well and the trading outlook remains in line with that described in the Group's preliminary results announcement on 28 May 2008.

QinetiQ North America (QNA)
QNA has seen continued strong activity levels across its business and a recent reorganisation of the IT Services division across the Systems Engineering and Mission Solutions divisions positions us well to build on core strengths in these important markets. In the Technology Solutions Group Talon shipment levels remain strong and we have now delivered over 2,000 units to the US Department of Defense. The Mission Solutions division continues to increase the level of work it undertakes with NASA and recently won a $225m, nine year contract to support information management and communications activities at Kennedy Space Center. In addition it was awarded a $90m, three-year contract to provide ongoing launch support services across a variety of NASA sites.

Europe, Middle East and Australasia (EMEA)
The year has started satisfactorily and the outlook for the full year remains in line with the Board’s expectations. In the UK we continue to successfully provide MOD with value for money offerings such as the £24m, ten year award to provide through-life support to sustain the Harrier aircraft programme through the remainder of its service life.

Unmanned vehicles continue to be a key area of focus. This was evidenced in the period with EMEA being closely involved in the UK’s Mantis airborne Unmanned Autonomous System programme and the US Defense Advanced Research Projects Agency's (DARPA) Vulture air vehicle programme which will create a new category of ultra-long-endurance aircraft utilising expertise developed from our highly successful Zephyr programme.

EMEA’s expansion into international and adjacent markets continues to make good progress. The recently acquired Australian businesses have been integrated and are making a positive contribution to the Group. We have now recruited a new CEO, Mike Kalms, to lead this business going forward. Mike has extensive experience in the Australian defence industry.

The previously announced portfolio review of EMEA to identify any non-core activities is nearing completion. This may lead to further strategic partnering, IP licensing, new venture creation or exit from certain non-core activities.

The Ventures businesses comprising both the retained ventures and those in our venture fund with Coller Capital are making satisfactory operational progress. In June 2008 the official launch of the Tarsier system installed at London’s Heathrow airport received widespread national media and industry coverage for this important runway monitoring system.

Financial position
The balance sheet remains strong and there have been no significant changes in the financial position of the Group since that reported as at 31 March 2008.

The Board remains confident about the outlook for the Group in the coming year.

Monday, July 28, 2008



28 Jul 2008 | Ref. 217/2008

London, United Kingdom – BAE Systems has today announced a recommended offer to acquire Detica Group plc (Detica), a provider of information management capabilities to the National Security and Resilience (NS&R) sector. The offer to acquire the entire issued share capital of Detica for 440 pence per share in cash values the business at approximately £538 million including assumed net debt.

Detica employs approximately 1,500 people. It has an enviable trading record since its incorporation in 1977 and has established itself as the pre-eminent consulting provider servicing the counter-threat agenda. Detica has also been able to leverage successfully its expertise and core capabilities into commercial markets through a keen focus on the information-intensive areas of security, fraud containment, risk management, regulatory compliance and customer management.

The proposed acquisition of Detica is consistent with BAE Systems’ strategic objective to establish security businesses in its home markets. BAE Systems has identified NS&R as an evolving and growing sector benefiting from increasing priority government attention and expects the accessible NS&R sector in the UK to double to over £3bn by 2011. While BAE Systems has been developing plans for substantial organic investment to pursue growth NS&R opportunities, the proposed acquisition of Detica provides an economically attractive and accelerated implementation of its strategy to address these growth opportunities.

Ian King, Chief Operating Officer, UK and Rest of World, BAE Systems said; “This acquisition will combine Detica’s well established customer relationships and technical capabilities together with our system integration capabilities. This will result in a depth of financial and technical capability to address growth opportunities and better serve customers. In addition, our broad geographic footprint provides substantial opportunities to grow a national security and resilience business across our other home markets and our existing activities and structure will provide a platform for us to apply Detica’s capabilities into the US Homeland Security market.”

BAE Systems has great respect for what Detica’s Chief Executive, Tom Black and his team have achieved with Detica. Tom has confirmed he intends to stay with the business to continue to develop its strategy and lead it through its next phase of growth.

The business combination is expected to benefit from strong growth, consistent with the anticipated growth in the sector, and from cost synergies including benefits from more efficient internal investment. These benefits are expected to enable the acquisition to achieve a return in excess of our cost of capital in the third full-year following completion.

The offer is subject to sufficient acceptances being received from Detica’s shareholders and is conditional upon certain regulatory clearances. The proposed transaction is expected to complete later this year.

About BAE Systems
BAE Systems is the premier global defence and aerospace company delivering a full range of products and services for air, land and naval forces, as well as advanced electronics, information technology solutions and customer support services. With approximately 100,000 employees worldwide, BAE Systems' sales exceeded £15.7 billion in 2007.

About Detica
Detica is a business and technology consultancy specialising in helping clients collect, manage and exploit information to reveal actionable intelligence. Detica focuses primarily on helping clients use intelligence to identify and counter those who threaten the safety of the public, the security of the state or seek to commit serious and organised crime. Detica also uses its skills to assist clients with other information-intensive problems, such as achieving regulatory compliance and understanding customer behaviour.

By combining technological innovation with in-depth industry knowledge, Detica has developed a range of world-class solutions centred on its expertise in information exploitation, security and resilience, threat intelligence and customer insight. In these areas, Detica’s business and technical consultants offer a range of services from strategy formulation through people and process change to the development, delivery and support of software and hardware technology. Detica’s understanding of today’s information-intensive challenges has also led it to develop a range of specialist services and products based on its unique intellectual property.

Thursday, July 24, 2008

BAE SYSTEMS names Erwin Bieber President of Network Systems


24 Jul 2008 | Ref. 214/2008

Erwin W. Bieber
RESTON, Virginia — BAE Systems has named Erwin W. Bieber president of its Network Systems business. Bieber previously was vice president of engineering for BAE Systems’ Electronics & Integrated Solutions operating group.

Network Systems serves the U.S. intelligence, defense, and homeland security markets with products and capabilities in communications and tactical networks; advanced information technology; and command, control, computing, and intelligence systems. The business, with headquarters in Reston, employs 5,000 people at more than 10 major U.S. sites that include San Diego; Burlington, Massachusetts; and Wayne, New Jersey.

Bieber started his career with Sperry Strategic Systems. He later worked for the U.S. Navy as a systems engineer and then joined the Singer Co. in 1985, which became part of BAE Systems through the acquisition of GEC-Marconi. He progressed through a series of positions in engineering, business development, and program management. He holds a bachelor’s degree in electrical engineering from Pratt Institute.

Wednesday, July 23, 2008

Babcock International Group PLC: AGM Statement and Interim Management Statement

10 July 2008
Babcock International Group PLC

AGM Statement and Interim Management Statement

At today’s Annual General Meeting of Babcock International Group PLC (Babcock), the
leading engineering support services company, Gordon Campbell, Chairman will make the
following statement:

“2007/08 was another record year for Babcock, building on the excellent progress made over
recent years. Our Interim Management Statement released this morning, confirms that the
current financial year has started well. Trading conditions across the Group remain healthy
and our business continues to perform in line with our expectations.
As anticipated at the time of the Preliminary Results announcement on 13 May, a number of
significant contracts have been concluded. In total these contract awards are worth over
£800 million and the Group order book now stands at £3.8 billion and the bid pipeline remains

Our strategy remains the expansion of our business within the technically based support
services market. Utilising the significant technical expertise and depth of knowledge we have
in submarine support we have made our first move into the international submarine support
market with the award of the Canadian in-service support contract. This provides us with an
excellent position from which we will seek to expand further our international submarine
support business.

The Board believes that, in addition to recent contract wins, the markets in which we operate,
the strong relationships we have with our customers and the technical expertise within our
business all provide us with significant opportunities to achieve growth over the long term.
I have had the privilege of chairing Babcock for nearly eight years and well run companies
plan succession as well as operating their business. I have therefore decided to stand down
later this year and will be succeeded by Mike Turner, the retiring Chief Executive of BAE
Systems, as Non-Executive Chairman. Mike rejoins a company in rude health, one which has
increased its market capitalisation from £87 million following 9/11 to nearly £1.4 billion today.
This has been achieved by a commitment to its business, which requires patience and good
management as opposed to quick-fix financial engineering, and this is the basis for
sustainable growth.

I am certain that this management team under Mike and Peter will continue the progress. As
one of our larger investors said recently ”It is not often we make five times our money and still
have a business which is capable of making the FTSE 100.”
We remain confident that this will be another year of progress for Babcock.”

Interim Management Statement
Set out below is the first Interim Management Statement for the period since 30 March 2008,
as required by the UK Listing Authority’s Disclosure and Transparency Rules.

The current financial year has started well. Trading conditions across the Group remain
healthy and our business continues to perform in line with our expectations. We remain
confident that this will be another year of progress for Babcock.

Negotiations with the Ministry of Defence relating to the Terms of Business Agreement for
naval support continue to progress well and the key commercial principles have now been
agreed. We expect the final agreement to be signed in the second half of the financial year.
On 3 July the Ministry of Defence signed the manufacturing contracts for the future aircraft
carrier project (CVF). Babcock is a key member of the Aircraft Carrier Alliance and has been
awarded a £675 million contract through to 2016 to construct the bow sections and for the
final assembly and completion of the ships at its dockyard at Rosyth.

On 1 July Babcock announced that the Canadian Government had awarded it a contract to
provide in-service support to their four Victoria class submarines. The initial five year contract
is worth around C$250 million (£125 million) and the Canadian Government has options to
extend this up to a total of 15 years, with a total contract value to Babcock, expected to be in
the order of C$1.5 billion (£750 million). This contract represents Babcock’s first opportunity
to utilise its technical expertise and knowledge of submarine support to move into new
international markets.

Building on the operational success of the mobility weapons-mounted installation kit (MWMIK)
Jackal Patrol Vehicle built by Babcock under an Urgent Operational Requirement, the Ministry
of Defence have ordered a further 72 vehicles. The £20 million contract was awarded as the
100th vehicle from the original 130 vehicle contract was completed.

The division continues to trade steadily with all current contracts performing in line with

Although both parties have yet to commit to contract, agreement in principle has been
reached with the Ministry of Defence on the commercial terms of The Royal School of Military
Engineering (RSME) PPP contract and finalisation and signature of formal contractual
documentation and financial close is expected shortly. This contract will provide training and
training support, deliver improved living accommodation and new training facilities for RSME
and is expected to be worth around £1.3 billion to Babcock over a 30 year period.
The Hackney Building Schools for the Future (BSF) contract has experienced some delay but
continues to move towards financial close. This is now expected to complete before the end
of July.

The division continues to focus on the recovery in its financial performance with a steady
stream of framework orders continuing to come through.

Integration of the Alstec, INS and Strachan & Henshaw businesses to create BNS Nuclear
Services is progressing well. The division continues to make good progress with its current
contracts, and its scale and expertise place it in a strong position to respond to future
opportunities in the nuclear decommissioning, power generation and new build markets.

In the Transmission business our alliance contracts with National Grid and EDF continue to
perform in line with expectations and we remain confident of receiving an increase in volume
from EDF. The division has also secured a framework contract to support Scottish and
Southern Energy across their electricity transmission network. The Digital Switchover
programme continues to provide a steady flow of work for the Communications business and
some new opportunities in the mobile telecommunications market are starting to come

Engineering and Plant
In South Africa, our equipment and engineering businesses continue to benefit from the
Government’s focus on infrastructure improvements as well as the healthy natural resources
market. The Powerlines business continues to perform well and has seen further increases in
its orderbook. The rand exchange rate has remained relatively stable and within planning

Financial Position
The Group’s cash flow performance remains strong and gearing ratios are comfortably within
both internal and external benchmarks.

Other than disclosed above there has been no significant change in the financial position of
the Group since that reported with the preliminary results on 13 May 2008.

Shaun Liebenberg appointed to the Rheinmetall Defence Board


Shaun Liebenberg appointed to the Rheinmetall Defence Board

Effective July 1, 2008, Shaun Liebenberg, 46, has been appointed to the Management Board of Rheinmetall Defence where he will be responsible for International Business Development. Most recently Shaun Liebenberg was Group Chief Executive Officer at Pretoria-based Denel Pty Ltd, South Africa's biggest defence company. Previously he had held various management positions at IT, electronics and automotive industry companies in South Africa.

By appointing Shaun Liebenberg to the Defence Management Board, Rheinmetall has emphasized the importance of global markets to the envisaged corporate growth. In fiscal 2007, Rheinmetall Defence generated net sales of €1.8 billion, 65 percent thereof being contracted with international customers.

Rheinmetall Defence is Europe's leading supplier of systems and key components for land forces. With its armoured vehicles, weapons, munition, air defence systems and defence electronics, this Rheinmetall sector makes a sizable contribution to the modernization of the armed forces in light of the changed scenarios on international missions.

General Dynamics Reports Strong Earnings, Backlog Growth in Second Quarter 2008

General Dynamics Reports Strong Earnings, Backlog Growth in Second Quarter 2008

– EPS from continuing operations increases 26 percent
– Sales, earnings and operating margins increase company-wide
– Full-year EPS guidance increased

FALLS CHURCH, Va. – General Dynamics (NYSE: GD) today reported second-quarter 2008 earnings from continuing operations of $641 million, or $1.60 per share on a fully diluted basis, compared with 2007 second-quarter earnings from continuing operations of $518 million, or $1.27 per share fully diluted. Revenues grew to $7.3 billion in the quarter, a 10.8 percent increase over second-quarter 2007 revenues of $6.6 billion. Net earnings were equal to earnings from continuing operations of $641 million.


Net cash provided by operating activities in the quarter totaled $1 billion. Free cash flow from operations, defined as net cash provided by operating activities from continuing operations less capital expenditures, was $910 million for the period, or 142 percent of net earnings.

For the first half of 2008, net cash provided by operating activities was $1.5 billion, while free cash flow from operations was $1.3 billion.


Company-wide operating margins for the second quarter of 2008 increased 110 basis points over the second quarter of 2007, to 12.6 percent.


The company’s funded backlog grew by approximately $5.2 billion or 12.9 percent in the second quarter of 2008, on strong orders for new aircraft in the Aerospace group, as well as demand for tanks, combat vehicles, tactical communications systems and information technology services. Compared to first-quarter 2008, company-wide total backlog grew by 11.2 percent.


The company’s 2008 second-quarter financial results include a $35 million benefit from the favorable settlement of a tax-refund suit; this factor increased earnings by approximately 9 cents per share in the quarter.

Operational Highlights

Sales, earnings and operating margins increased in all four General Dynamics business groups in the second quarter. The Combat Systems group experienced increased sales in its armored vehicle and tank programs compared to the year-ago period and significant margin growth. New-aircraft volume in the Aerospace group, increased shipbuilding activity in Marine Systems and continued strong demand for tactical communications and computing systems in the Information Systems and Technology sector also contributed to the overall strong performance.

“General Dynamics’ performance continued to be strong in the second quarter of 2008,” said Nicholas D. Chabraja, chairman and chief executive officer. “Sales, earnings and operating margins increased in all four business segments compared to the year-ago period, cash generation was exceptionally strong and the robust backlog suggests continued healthy demand for the products and services of each business area.

“Growth in the Aerospace backlog is a reflection of continued demand for the entire existing product line and extremely strong demand for the new Gulfstream G650. We are very pleased to see this interest in the new plane and view that as an indicator of Gulfstream’s ability to anticipate and exceed its customers’ product expectations.

“On the basis of these results and a clearer sense of what the remainder of 2008 will bring, we expect full-year 2008 earnings from continuing operations to be in the range of $6.00 to $6.05 per share, fully diluted,” Chabraja said.

General Dynamics, headquartered in Falls Church, Virginia, employs approximately 84,600 people worldwide and reported $27.2 billion in revenue in 2007. The company is a market leader in business aviation; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and mission-critical information systems and technologies. More information about the company is available on the Internet at

VT Group AGM and Interim Management Statement

VT Group AGM and Interim Management Statement
23 July 2008

Defence and support services company VT Group issues the following Interim Management Statement, covering the Group’s performance for the period since March 31, 2008, ahead of today’s Annual General Meeting.
The Group continues to trade in line with the Board’s expectations. With a growing order book and strong financial position, it is well placed for the future.

Notable highlights include:
Record Order Book
The order book has increased since the end of March and is now approaching £5 billion (rising to more than £6 billion including order book attributable to BVT Surface Fleet Limited (BVT)). This increase follows contract signature for the UK Military Flying Training System (UKMFTS); the formation, with BAE Systems, of the shipbuilding and naval support Joint Venture ; and the subsequent placing of the manufacturing contract for the Royal Navy’s new aircraft carriers (CVF).

Major Developments
VT has increased its focus on the development of its engineering-based support services. Notable milestones since March have been:
Starting work on the FSTA (Future Strategic Tanker Aircraft) and UKMFTS (UK Military Flying Training System) programmes within both our Communications and Support Services divisions. The initial value of UKMFTS, which was contracted in early June, is around £600 million to Ascent, the Joint Venture between VT and Lockheed Martin. The total programme value is estimated to be worth up to £6 billion over 25 years.
In addition to UKMFTS, being named preferred bidder to renew and expand our work in initial flying training for all three Armed Forces, valued at up to £150 million over 10 years.
Being named selected bidder for long-term capability management for the New Dimension fleet of emergency vehicles and equipment modules that is deployed by the Fire and Rescue Services to attend major incidents. Contract value in excess of £100 million is anticipated over its 16-year term.
Extending our engineering vocational training contract for the British Army’s Royal Electrical and Mechanical Engineers by one year, with the option for a further year. This is valued at more than £20 million.
Progressing the integration of VT Flagship with the VT Education and Skills business to create the biggest education services and training organisation in the UK, with some 4,000 employees and turnover in excess of £250 million.

Financial Position
There has been no material change in the financial position of the Group since VT last reported.
The formation of BVT involves VT contributing the assets of its shipbuilding and naval support businesses in exchange for receiving 45 per cent of the equity in the joint venture. A comprehensive review of the fair value of the assets contributed by both partners is in progress to finalise the initial carrying value of our investment in BVT, as well as an exercise to harmonize the application of accounting policies of the contributed businesses.
In parallel with the formation of BVT, VT has acquired from BAE Systems the remaining 50 per cent shareholding in Flagship Training, in future to be known as VT Flagship . An initial consideration of £16.5 million was paid at completion of the transaction with a fixed deferred consideration element of £65 million. An existing loan of £7.3 million from BAE Systems to Flagship Training was repaid at completion.
VT Group Chairman Mike Jeffries commented: “I would like to thank all our colleagues for their hard work and commitment, which is demonstrated in these successes. BVT has started well, our business continues to make good progress and the Board remains confident for the full year.”

Boeing Reports Second-Quarter Financial Results, Reaffirms Guidance

Boeing Reports Second-Quarter Financial Results, Reaffirms Guidance

Chicago, July 23rd, 2008 --
* Second-quarter revenues steady at $17.0 billion

* Net income was $0.9 billion with EPS of $1.16 per share, including a previously disclosed charge of $0.22 per share

* First-half EPS grew 13 percent to $2.79 per share as revenue grew 2 percent to $33.0 billion

* Backlog at record $346 billion

* 2008 and 2009 financial guidance reaffirmed

Response to Luke Johnson Financial Times article, "Merchants of death display mixed virtues"


The article by Luke Johnson "Merchants of death display mixed values" (Financial Times newspaper, Wednesday July 23rd 2008) suggests that greater R&D spin-offs are possible if only funds devoted to defence were given to the civil sector. This aspiration seems to miss two points. Firstly that for four decades analysts have identified greater MOD R&D spending in military projects as being essential, but never achieved - thereby reducing the likelihood of civil spin-offs. Although US DOD research budgets are due to fall for the first time over the next four year period, the prodigious expenditures of the last decades will continue to ensure spin-offs.
Second, considering the the span of history it is often conflict or fear of conflict which drives technological advancement - for example drugs such as penicillin, internet, mobile communications and satellite navigation as a few conflict or fear of conflict driven inventions. No doubt the technological breakthroughs would have been made without threat of war, but when may well have been at a significantly later date.

Jeffrey Bradford
Managing Director, CMI

House Armed Services Committee: Hearing on the Comptroller General’s Progress Report on Iraq

Ike Skelton, Chairman

For Immediate Release: July 23, 2008

Opening Statement of Chairman Ike Skelton (D-MO)

Hearing on the Comptroller General’s Progress Report on Iraq

Washington, DC – House Armed Services Committee Chairman Ike Skelton (D-MO) delivered the following opening statement during today’s hearing on the Comptroller General’s Progress Report on Iraq:

“Today the Armed Services Committee meets to hear from Mr. Gene Dodaro, the Acting Comptroller General of the United States, about the work recently conducted by the Government Accountability Office assessing progress in Iraq and calling for a new strategy to govern our efforts there. Mr. Dodaro is accompanied by Mr. Joseph Christoff, who I understand is present to answer questions but will not be making any opening statement. Gentlemen, welcome, and thank you for being here.

“Before we begin, I should make an administrative announcement. This hearing will be followed by a classified briefing on work regarding the Joint Campaign Plan that was conducted by GAO. That briefing will happen in 2212 Rayburn, and best guess is that it will start about 12:30. It will be at the SECRET level, so 9(c) staff are welcome to attend.

“GAO has done some excellent work for this committee and the Congress on Iraq over the years, and I think all my colleagues would join with me in thanking you for that. The most recent report on Iraq continues the tradition of raising important questions that Congress, and the Administration, should be considering as we move forward.

“The recent GAO report comes to a simple conclusion, that we need to develop a new strategy in Iraq. The report makes the case by noting that the “New Way Forward” strategy announced by the President in January 2007 is coming to an end with the departure from Iraq of the Surge brigades, and that we should be working on what’s next. I posed the “what’s next” question to General Petraeus and Ambassador Crocker when they came before this committee in April. The answer is unclear.

“But the next question we should consider, and I hope Mr. Dodaro will weigh in, is if we should be undertaking a new strategy in Iraq right now. I and many others have long been in favor of changing our approach in Iraq. For the good of Iraq and the health of our military, we should be finding ways to take advantage of the Iraqi desire for real sovereignty and to hand over more responsibility for their security. This would provide a clear path towards the redeployment of the U.S. combat troops in Iraq. This is what the Iraqis clearly want, and it is what the American people clearly want. Any new strategy in Iraq should take into account the Iraqi desire for more sovereignty, as well as the health of the U.S. military and competing demands in Afghanistan.

“It is, however, worth asking if this is the right moment for a full, interagency effort to write a new strategy document. Iraq is undergoing a political transition. General Petraeus is conducting his analysis and evaluation following the redeployment of the surge brigades. The U.S. and Iraq are also deeply involved in negotiations on a status of forces agreement. And Iraqi leaders have endorsed goals for the redeployment of U.S. combat forces.

“Ideally, the Administration would have conducted a full, interagency effort to develop a new strategy well in advance of the end of the New Way Forward. Unfortunately, they did not. And we are left trying to muddle through the current changes. But, we have to answer, if pushing for a new strategy document that may well be obsolete by the time it’s done makes sense, or if we are better off waiting for a short period of time. I hope this hearing can help answer these questions.

“I now yield to my colleague, the Ranking Member, Duncan Hunter for any comments he cares to make.”

Tuesday, July 22, 2008



Bethesda, Maryland, July 22nd, 2008 --

Second quarter earnings per share up 18% to $2.15; Year-to-date earnings per share up 14% to $3.90
Second quarter net earnings up 13% to $882 million; Year-to-date net earnings up 10% to $1.6 billion
Second quarter net sales up 4% to $11.0 billion; Year-to-date net sales up 6% to $21.0 billion
Cash from operations of $1.5 billion for the quarter; $2.4 billion year-to-date
Increased outlook for 2008 net sales, earnings per share, cash from operations, and return on invested capital (ROIC).

Lockheed Martin Corporation (NYSE: LMT) today reported second quarter 2008 net earnings of $882 million ($2.15 per diluted share), compared to $778 million ($1.82 per diluted share) in 2007. Net sales were $11.0 billion, a 4% increase over second quarter 2007 sales of $10.7 billion. Cash from operations for the second quarter of 2008 was $1.5 billion, compared to $1.4 billion in 2007.

"In line with our expectations, the Corporation had a strong second quarter, strategically, operationally and financially,” said Bob Stevens, Chairman, President and CEO. “This performance reflects the dedication of our talented work force and leadership team's focus on consistent performance for our customers and stockholders.”

The increase in the Corporation’s projected 2008 net sales results from the acquisition of the Eagle Group during the second quarter.

The increase in the Corporation’s projected 2008 diluted earnings per share results primarily from:

higher projected segment operating profit due to improved performance from Aeronautics, Electronic Systems, and Information Systems & Global Services;
earnings of $0.14 per share recognized on an unusual item in the second quarter; and
a decrease in interest expense as a result of the scheduled redemption on August 15, 2008 of the Corporation’s $1 billion floating rate convertible debentures as announced on June 26, 2008.
It is the Corporation's practice not to incorporate adjustments to its outlook for proposed acquisitions, divestitures, joint ventures, or other unusual activities until such transactions have been consummated.

Balanced Cash Deployment Strategy

The Corporation continued to execute its balanced cash deployment strategy during the second quarter as follows:

repurchased 7.3 million shares at a cost of $770 million in the quarter and 18.6 million shares at a cost of $2.0 billion for the year-to-date period;
made capital expenditures of $170 million during the quarter and $274 million during the first six months of the year;
paid cash dividends of $168 million in the quarter and $340 million for the year-to-date period;
repaid $103 million of long-term debt in the quarter; and
invested $77 million in the quarter and $88 million during the first half of the year for acquisition and investment activities.
Segment Results

The Corporation operates in four principal business segments: Aeronautics; Electronic Systems; Information Systems & Global Services (IS&GS); and Space Systems.

Net sales for Aeronautics decreased by 8% for the quarter and 4% for the six months of 2008 from the comparable 2007 periods. In both periods, decreases in Combat Aircraft sales more than offset increases in Air Mobility and Other Aeronautics Programs. The decrease in Combat Aircraft for both the quarter and the six months was due primarily to lower volume on F-16 programs. The increase in Air Mobility for the quarter and first half of the year was due primarily to higher volume on C-130J programs, including deliveries and support activities. There were three C-130J deliveries in the second quarter of 2008 and six during the first six months of the year compared to three and five deliveries in the comparable periods of 2007. The increase in Other Aeronautics Programs for both periods was due mainly to higher volume in sustainment services activities.

Operating profit decreased by 3% for the quarter and increased by 2% for the six months of 2008 from the comparable 2007 periods. During the quarter, operating profit decreases in Combat Aircraft and Air Mobility offset an increase in Other Aeronautics Programs. In Combat Aircraft, the decline was due mainly to lower volume on F-16 programs. The decrease in operating profit at Air Mobility was attributable primarily to performance on C-5 programs offset partially by improved performance on C-130 programs. The increase in Other Aeronautics Programs was due mainly to higher volume and improved performance in sustainment services activities. During the first six months of the year, an increase in Other Aeronautics Programs was offset partially by declines in Air Mobility and Combat Aircraft. The increase in Other Aeronautics Programs was due mainly to higher volume in sustainment services activities. In Air Mobility operating profit decreased due to performance on C-5 programs which was partially offset by improved performance and the delivery of one additional C-130J in 2008.

Electronic Systems
Net sales for Electronic Systems increased by 6% for the quarter and 8% for the six months of 2008 from the comparable 2007 periods. During the quarter and the first half of the year, sales increased due mainly to higher volume in fire control and tactical missile programs at Missiles & Fire Control (M&FC) and undersea systems, surface systems, and radar systems activities at Maritime Systems & Sensors (MS2). These increases were offset partially in both periods by declines in platform integration activities at Platform, Training & Energy (PT&E).

Operating profit for Electronic Systems increased by 6% for the quarter and 10% for the six months of 2008 from the comparable 2007 periods. In both the quarter and six month periods, the increases in operating profit were attributable primarily to higher volume and improved performance in tactical missile and fire control programs at M&FC and radar systems at MS2. In both periods, these increases were offset partially by declines in operating profit at PT&E due mainly to performance in the second quarter on platform integration programs.

Information Systems & Global Services (IS&GS)
Net sales for IS&GS increased by 13% for the quarter and 15% for the six months of 2008 from the comparable 2007 periods. Sales increased in all three lines of business for both the quarter and six months. The increase in Global Services was due principally to global and mission services activities. The increase in Mission Solutions was driven primarily by mission and combat support solutions activities and global security solutions programs. The increase in Information Systems was due to higher volume on information technology programs.

Operating profit for IS&GS increased by 18% for the quarter and 17% for the six months of 2008 from the comparable 2007 periods. In both the quarter and the six month periods, the increase in operating profit was driven by Information Systems and Mission Solutions. The increase in Information Systems was due to higher volume on IT programs and a benefit from a contract restructuring during the first quarter of 2008. Mission Solutions operating profit grew due to higher volume and improved performance on secure enterprise solutions and mission and combat support solutions activities.

Space Systems
Net sales for Space Systems increased by 6% for both the quarter and six month periods of 2008 from the comparable 2007 periods. In both periods, sales growth in Space Transportation was offset partially by a decline in Satellites. The sales growth in Space Transportation was due primarily to higher volume on the Orion program. In Satellites, reduced volume in government satellite activities was offset partially by an increase in commercial satellite activities in both periods. There was one commercial satellite delivery during the second quarter and two during the first six months of 2008. In the first six months of 2007 there was one commercial satellite delivery in the second quarter.

Operating profit increased by 25% for both the quarter and six months of 2008 from the comparable 2007 periods. In both periods, the increase in operating profit was due to growth in Space Transportation and Satellites. In Space Transportation, the increase was attributable mainly to higher equity earnings on the United Launch Alliance joint venture, volume on the Orion program and the results from successful negotiations of a terminated commercial launch service contract in the first quarter of 2008. In Satellites, the increase was attributable mainly to higher volume and improved performance on commercial satellite activities.

Thursday, July 17, 2008

Response to Financial Times article, “America’s air force misses the target”

With regard to John Gapper’s article, “America’s air force misses the target” Published in today’s Financial Times, the article really misses the point and exposes a lack of appreciation of defence procurement processes.

During the Second World War, when for example some 40% of British GDP was devoted to the defence effort, new equipment could go from the drawing board to the front line in a matter of months. Witness the plethora of fighter and bomber aircraft developed during the conflict.

In the late 1950s, the British Master General of the Ordnance bemoaned the fact that it was taking upwards of 2 years to get equipment into production.

A combination of sustained peacetime, a static foe during the Cold War and evolution of the services sector in Western societies has led to defence engineering and manufacture becoming increasingly specialised. The “peace dividend” of the early 1990s was a further nail in the coffin for the industry and for fast defence acquisition.

The average time from concept to in-service is nearer two decades, bringing us to the issue of the F-22. Would anyone have bet their stock portfolio or home in 1988 as to the world of 2008 ? A world pre-internet, cell phone was a novelty, Big Bang had just happened in London, Russia was seen as the big enemy, UAV’s were model aircraft.

The world is complex and whilst trends can be discerned, on the whole the system is unpredictable. In addition, equipment built many years ago finds itself being used for different applications with success beyond the ideas of designers and procurers - take the BAE Systems Nimrod aircraft now being used for airborne command and control, The canberra aircraft served for 50 years.

The F-22 will definitely have its day in the sun, and most certainly could not be built at a whim, when storm clouds finally gather.

Book Review: House of War by James Carroll

Book Review: House of War by James Carroll

A very personal history of the Pentagon and its role in shaping American foreign and domestic policy. James Carroll writes from an unashamed personal perspective. The son of a former FBI officer promoted to General in the US Air Force at the time of the McCarthism scares, James grew up going to the Pentagon on a Saturday with his father. Later he protested the Vietnam war outside the Pentagon as a priest and now applies his intimate experiences to his role as a journalist making sense of the cultural construct which the Pentagon has grown into and its impact on thinking in the United States.

At the heart of his dialogue is the identification of key people and the ways in which they influence policy and successive generations of Pentagon leaders. One new fact to this reviewer was how Vice- President Dick Cheney's first role was as an assistant to Donald Rumsfeld - just one illustration of the intertwining relationships which span generations. A further theme is the role of nuclear power and policy at the heart of Pentagon thinking. Whilst it might seem anachronistic today, the amounts being spent on ballistic missile defence have a lineage of thinking spanning back several decades. Additionally the development of atomic and nuclear policy is charted from the perspective of the Pentagon's role in skewing the American economy and R&D base to serving the organisations needs - and thus having a major impact on the role of the Presidency. The third theme is that of dates and the way in which major events occur on similar dates on different years is a recurring theme.

This book is not an objective academic story, but more a passionate personal view of an institution spanning decades, its people, impact on society, the authors family and the international community. (672 pages, published by Houghton Mifflin ISBN: 0618187804).

Notes from the Islands of Farnborough…..a Special Report (courtesy of DefenceNet Daily)

Notes from the Islands of Farnborough…..a Special Report

The eager traveller, disgorging from the London train, boards the (this year) courtesy bus, and is borne to the edge of the ‘New World’ – the bigger and better than ever Farnborough Airshow.

The old hands contrive to be at the front of the bus, and so hit the security perimeter first. A ‘fast lane’ for exhibitors and media is certainly a welcome feature.

Emerging into the show, the low looming serried ranks of the Russians, overlooking the end of the runway, suggests a certain shyness – and remarkably, so far no Russian aircraft has taken part in the display. But over in Hall 1, cheerful Russian girls are said to be folk-dancing in the aisles.

The Empire of Finmeccanica dominates the walk-in, resplendent in its use of corporate red, and with its own enclosure – and gates.

Inside the halls, islanders eye each other warily across a few metres of carpet which might just as well be the Strait of Hormuz. Occasionally they make forays to each other’s territories to exchange beads, pens and visiting cards.

Some seek to garrison and castellate their space permanently – BAE Systems World is one such, and Thales have use of a new chateau outside Hall 4.

A walk between the chalet lines (or ‘pleasure palaces’ as some know them) can be instructive. Many come complete with large gentlemen on the door, wired for sound, who demand extra credentials as a condition of entry to the wonders that lay inside….

The Noble Baroness, Plenipotentiary from The Ministry, was hard put to placate the natives with real contract announcements. Her predecessor announced Team Complex Weapons two years ago, during a power cut. This time, the Minister announced six assessment contracts totalling £74 million. The most noteworthy was for work on a 50Kg munition – a sign of the shape of things to come for the manned aircraft enthusiast?

She did, however, support the SBAC’s Supply Chain 21 initiative. It’s noticeable that the space occupied by the collectives from within the supply chain continues to grow. North West Aerospace Alliance for example now inhabits no fewer than four ‘islets’ in the Farnborough archipelago. The Minister, running late, was also observed to have dumped a visit to MBDA in favour of visiting the island of Northern Defence Industries…..

And so to BAE Systems World. It’s a whole different scene down that end; rain or shine, it makes no odds to them. They pointedly show the accidental tourist their internal displays – a vast range of armoured vehicles which they seem to be able to sell to all but HMG. They have a great vantage point for the flying display; mind you, some do not indulge at the outside bar for reasons of religion, sensibilities etc.

The “you should have been here yesterday” event was the F-22 Raptor display on Monday – still being talked about by those who saw it. It’s big. It’s noisy. It seems to be able to hover vertically in the air. And it does have the cutest turning circle. But what is the future for this ‘dino-bird’? The US Air Force Secretary pointing out that America is fighting two wars to which it has made no contribution is not perhaps an entirely good sign!

And so, our voyage of discovery done, we look to return to the mainland. But what is this? Safran’s Parisian blonde (Caroline by name) in her golf buggy ferries the weary back to the bus. From there the train, onwards to the parties in London’s evening. Of those….well, perhaps another time!

Raytheon Integrated Defense Systems Names Del Checcolo Vice President, Engineering

Raytheon Integrated Defense Systems Names Del Checcolo Vice President, Engineering

TEWKSBURY, Mass., July 16, 2008 /PRNewswire/ -- Raytheon Company's
(NYSE: RTN) Integrated Defense Systems has named Michael Del Checcolo vice president, Engineering, reporting to IDS President Dan Smith. He is also the IDS business representative on the Raytheon Company Engineering Leadership team, reporting to Mark Russell, Raytheon Company vice president of Engineering, Technology and Mission Assurance.

Del Checcolo's responsibilities include leading all engineering activities within IDS, including the development and management of technology, execution of advanced programs, coordination of strategic architecture initiatives, and continuous improvement of processes and tools.

"This appointment underscores the importance IDS places on providing our results-based people with opportunities to grow within the company," Smith said. "Mike has continually produced outstanding results at ever increasing levels of responsibility for nearly 20 years."

Del Checcolo's most recent assignment was vice president of the IDS Engineering Advanced Technology Directorate. He holds a master's in electrical engineering from the University of Massachusetts-Amherst and a bachelor's from Northeastern University where he began his career with Raytheon in 1989 as a "Co-op" student. He has authored numerous papers and holds more than 20 patents.

Integrated Defense Systems is Raytheon's leader in Joint Battlespace Integration providing affordable, integrated solutions to a broad international and domestic customer base, including the U.S. Missile Defense Agency, the U.S. Armed Forces and the Department of Homeland

Raytheon Company, with 2007 sales of $21.3 billion, is a technology leader specializing in defense, homeland security and other government markets throughout the world. With a history of innovation spanning 86 years, Raytheon provides state-of-the-art electronics, mission systems integration and other capabilities in the areas of sensing; effects; and
command, control, communications and intelligence systems, as well as a broad range of mission support services. With headquarters in Waltham, Mass., Raytheon employs 72,000 people worldwide.



Farnborough, July 16th, 2008 -- Alliant Techsystems (NYSE: ATK), Lockheed Martin (NYSE: LMT) and the Northrop Grumman Corporation (NYSE: NOC) announced that they have signed a teaming agreement to jointly pursue the emerging market for advanced capability multi-role weapons. This team provides any potential customer in this market with the product options that offer the best capabilities, schedule, and price available. This is achieved through the integration of the capabilities that the team provides across sensors, automatic target recognition, guidance navigation and control, air vehicles, propulsion, lethality, survivability, mission planning, platform integration, system engineering, and program management.

As the F-22 Raptor, F-35 Lightning II, unmanned aerial systems, and future aircraft platforms are fielded over the next decade, the team believes that an advanced multi-role weapon requirement will emerge in the future that covers both the air-to-air and air-to-ground missions. This team, with its current weapon programs and demonstrated advanced technology capabilities, is confident that it will offer the customer best value options to meet this need.

ATK is a premier aerospace and defense company with more than 17,000 employees in 21 states and $4.5 billion in revenue. News and information can be found on the Internet at

Headquartered inBethesda, Md., Lockheed Martin employs about 140,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The Corporation reported 2007 sales of $41.9 billion.

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

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House Armed Services Committee: Skelton on the United States’ Role in the World

House Armed Services Committee

Ike Skelton, Chairman

For Immediate Release: July 16, 2008 Contact: Loren Dealy or Lara Battles


Skelton on the United States’ Role in the World

Washington, DC – House Armed Services Committee Chairman Ike Skelton (D-MO) today delivered the third in a series of speeches in the U.S. House of Representatives concerning the need for a comprehensive strategy to advance U.S. interests:

“I rise once again to discuss the need for a comprehensive strategy to advance U.S. interests in the world. Last week I delivered two addresses on this topic. In the second speech I argued that our understanding of the role the U.S. should play in the world is the foundation for our strategy. It will define our vital interests and will condition the means we use for advancing those interests.

“Today, the United States is the world’s dominant economic, political, and military power. There is no peer or near-peer competitor to us nor does one appear likely to emerge in the near future. Some have characterized the U.S. as a hegemonic power or as the world’s policeman, both those who approve and those who disapprove of such a state of affairs. President Clinton, echoing Winston Churchill, eloquently described a vision of the U.S. as “the indispensable nation,” not a world hegemon but a consistent and ever present ally and arbiter acting around the world. Still others advocate that the U.S. withdraw from a place of central prominence on the world stage to avoid the costs and implicit responsibilities of that role. I believe the U.S. should remain the world’s indispensable nation and in a later speech I’ll discuss the ways in which this role should inform the formulation of our comprehensive strategy, but first let me discuss the other options.

“Those who would have us significantly reduce our role on the world stage cannot provide a credible description of whom or what would replace the U.S. in the role of world leadership. The U.N. is not up to the task nor is any other international organization. As already mentioned, there is no other country in a position to fill the role of world leadership. To embrace such an approach we would have to accept that significant portions of the world would simply be left to their own devices. Yet we know that places as remote as the Hindu Kush are home to those who would attack us and our allies. What other corner of the world then do we judge to be so distant and so remote as to be beyond our interest? And how would world fault lines such as the Taiwan Strait, the India/Pakistan Line of Control, and the Israeli/Palestinian conflict respond to a world leadership vacuum? The answer is, not well. In short, for the U.S. to abdicate its position of world leadership would be highly detrimental to our national interest.

“What then does accepting a role of world leadership entail? And if it is a current necessity, is it an inherent good to be indefinitely maintained? In other words, should the U.S. view our position as world leader as so necessary to our security that we act largely to maintain this position, which is the primary characteristic of a hegemonic power or empire? Again, the answer is no. To do so is to put our national interest in opposition to the national interests of much of the rest of the world. It is inconsistent with the desires of the American people, with the extent of the costs they are willing to bear for world leadership, and I would argue with our sense of morality and fair play.

“Our vital interests should instead be defined, as suggested by President Clinton, by our role as the world’s indispensable nation: taking a leadership role in advancing and protecting our interests around the world in concert with our friends and allies as part of an open and evolving international system that is fair to all nations. To do so, we must restore the prestige and credibility of the United States, and repair and rebuild our relationships with our major international partners. With this role as our goal, we can define those interests critical to achieving it, and develop and adopt an appropriate strategy.”

Tuesday, July 15, 2008

Exercises "Caucasus 2008"

Caucasus 2008

Moscow, July 15 - The active stage of Caucasus 2008 large-scale military exercises started in several regions of the Southern Federal District of the Russian Federation.

The exercise involves units of the North Caucasus Military District, Airborne Troops, Air Force Command, Black sea Fleet naval base, Caspian Flotilla, border troops and Interior troops regional command.

The exercise involves some 8,000 military personnel and about 700 armor units.

The main goal of the exercise is to estimate ability of military command to joint actions in conditions of terrorist threat in the South of Russia.

In view of escalation of the Georgian-Abkhazian and Georgian-Ossetic conflicts, during the exercise questions of participation in special operations on peace enforcement in zones of confrontations will be fulfilled.

More than 140 tactical exercises of divisional, brigade, regiment and battalion scale are planned to be held in 2008 summer training period.

Monday, July 14, 2008

RAF's new transport aircraft revealed

RAF's new transport aircraft revealed

An Equipment and Logistics news article
27 Jun 08
The first Airbus A400M, the RAF's future transport aircraft, was revealed to the world yesterday, Thursday 26 June 2008, at the EADS production facility in Seville.

The long-range turbo-prop aircraft is expected to take to the air for the first time later this year. The A400M will replace part of the RAF's C-130 Hercules fleet early in the next decade with 25 aircraft already earmarked for the UK armed forces.

Minister for Defence Equipment & Support, Baroness Taylor, said:

"The A400M will be the RAF's new state-of-the-art transport aircraft for the 21st century. Capable of carrying a mixture of troops, equipment, vehicles and helicopters to the heart of our operations these aircraft will be the backbone of support to our troops.

"Their ability to take-off and land on short makeshift strips will enable us to deploy our forces quickly and effectively around the world on a variety of operations. Today's roll-out marks significant progress in the programme and I look forward to its first flight later this year."

Air Marshal Sir Barry Thornton, Chief of Materiel (Air) in MOD's Defence Equipment & Support organisation, added:

"This eagerly awaited new aircraft will support the deployment of all three Services in peace, crisis and wartime roles. It will be a highly reliable and capable aircraft that will make a significant difference to the Royal Air Force's strategic and tactical airlift."

The A400M programme is a European collaboration between Germany, France, Spain, Belgium, Luxembourg, Turkey and the UK.

UK-based companies are playing a significant part in the project, with the largely composite wing design and production taking place at Filton, Bristol, and Rolls-Royce in the UK playing a major role in the engine consortium.

Friday, July 11, 2008

House Armed Services Committee: Skelton on America’s Strategic Context

House Armed Services Committee

Ike Skelton, Chairman

For Immediate Release: July 10, 2008

Skelton on America’s Strategic Context

Washington, DC – House Armed Services Committee Chairman Ike Skelton (D-MO) today delivered the second in a series of speeches in the U.S. House of Representatives concerning the need for a comprehensive strategy to advance U.S. interests:

“Yesterday, I rose to speak about the need for America to embark upon a process to develop a comprehensive strategy to advance U.S. interests in the world. Today, I rise to continue that theme; I want to take the conversation a little further. A strategy, as I said last night, describes the way we employ all elements of national power to advance our critical interests. Ultimately, determining these critical interests depends upon the place America occupies in the world. What do we see as our role? Who do we want to be and how do we want to interact with the rest of the globe’s inhabitants to get there? That is the fundamental question, of course, but we are not ready to answer it yet.

“Instead, we must first consider the domestic and global contexts within which we must act. As our vision of where we want to go evolves, we must have an ongoing dialogue about the effort and the sacrifices we are willing to make. We must also look at the world as it is, not as we’d like it to be, and we must acknowledge that much of the world does not necessarily see us as we would see ourselves. And we must look clear-eyed beyond Iraq and Afghanistan. Only with that understanding can we determine where we want to go and how we want to get there. But as this vision develops, we must keep in mind that it is no good if we cannot provide the means to achieve it, nor is it useful if it is not a realistic fit with the rest of the world.

“The global environment is ever changing. While we cannot control the sea swell of change, we must prepare ourselves to navigate those waters. Regional power is shifting; some large nation states, such as China, India, Brazil to name a few, are ascending and verge on global power status. Russia may already be there, again. Do their interests conflict or coincide with ours? Is their rise a challenge to oppose or an opportunity to engage? Some of our traditional security arrangements may fade in importance as others take on new meaning. But nation states are not our only concern. It is clear that a number of trans-national issues will challenge us while others may provide positive potential. Fundamentalist terrorism and the proliferation of dangerous weapons are obvious examples of serious challenges, of course, but what about climate change, the fragility of increasingly connected world financial markets or the outbreak of pandemic disease? These are challenges that present themselves without any malicious intentional human action.

“The point here is that the world around us bears significant scrutiny because it represents the context that binds whatever strategy we choose. This is not to say that we cannot strive for an ideal – we can and we should. It is how this nation was formed. The ability to conceive a vision that is breathtaking in scope and heartbreaking in its beauty is America’s gift to the world. But while the goal may be the ideal, our understanding of our environment and our selection of the means to reach it must be firmly rooted in realism.

“With that thought I will close but I would like to point out that this is an ongoing theme within the Armed Services Committee. Our Oversight and Investigations subcommittee is currently holding a series of hearings on these topics, and the Full Committee will do so later in the year. In my next speech addressing these issues, I will talk about the need to return to the fundamentals of strategic understanding – a return to Sun Tzu, to Clausewitz, to strategic thought rooted not in slogans but in enduring principles.”

Thursday, July 10, 2008

House Armed Services Committee: Skelton and Abercrombie on Army FCS Announcement

House Armed Services Committee

Ike Skelton, Chairman

For Immediate Release: June 26, 2008

Skelton and Abercrombie on Army FCS Announcement

Washington, DC – House Armed Services Committee Chairman Ike Skelton (D-MO) and Air and Land Forces Subcommittee Chairman Neil Abercrombie (D-HI) released the following statement concerning the Army’s announcement on changes to the Future Combat Systems (FCS) program:

"The Army's announcement that it is changing the Future Combat Systems program to allow fielding of selected FCS equipment to light infantry units is a positive step toward improving the FCS program. We have supported FCS 'spin out' efforts because they are the best way to quickly get FCS equipment to the Army. However, we are concerned that this new plan may not allow for adequate testing of the equipment due to its very tight schedule. In addition, the overall FCS program remains far over budget, far behind schedule, and unaffordable in the long term given the many other pressing needs facing the United States Army. We look forward to seeing more changes to this program in the future."

House Armed Services Committee: Statement on Secretary Gates’ Tanker Announcement

House Armed Services Committee

Ike Skelton, Chairman

For Immediate Release: July 9, 2008 Contact: Loren Dealy or Lara Battles


Skelton Statement on Secretary Gates’ Tanker Announcement

Washington, DC – House Armed Services Committee Chairman Ike Skelton (D-MO) released the following statement concerning the Secretary of Defense’s announcement on the KC-X Tanker contract:

“This morning, Secretary Gates and I discussed the Department of Defense’s new plan for selecting the Air Force’s next tanker. After further review, the Pentagon will re-play fourth down using a new quarterback.

“The capability provided by a new tanker is critical for our national security and for the safety of our aircrews. I have confidence in Secretary Young and I hope he can assemble the right people to move ahead with this important contract in a reasonable period of time.”

House Armed Services Committee: U.S. Needs Comprehensive Strategy to Advance National Interests

House Armed Services Committee

Ike Skelton, Chairman

For Immediate Release: July 9, 2008

Skelton: U.S. Needs Comprehensive Strategy to Advance National Interests

Washington, DC – House Armed Services Committee Chairman Ike Skelton (D-MO) today delivered the first in a series of speeches in the U.S. House of Representatives concerning the need for a comprehensive strategy to advance U.S. interests:

“I rise today to talk about a fundamental problem affecting the national security of the United States which has not received the notice and consideration it deserves. The United States suffers from the complete absence of a comprehensive strategy for advancing U.S. interests. This strategic void detracts from almost every policy effort advanced by the United States Government. As a result, major policies are inconsistent and contradictory in different areas of the world and across different policy realms. We find ourselves unable to agree upon and set national priorities for addressing the major challenges of our time. We suffer from a splintering of national power, and an inability to coherently address threats and reassure and cooperate with allies.

“What do I mean by a comprehensive national strategy? The word strategy has military roots, coming from the Greek word for “generalship,” but the concept of a strategy extends well beyond just the military context. In the context of this speech, and others that I intend to deliver on this topic, it means a commonly agreed upon description of critical U.S. interests and how to advance them using all elements of national power – economic, diplomatic, and military.

“The next President will have a unique opportunity to develop a successful strategy for the nation. When President Dwight D. Eisenhower took office, he commissioned the Solarium Project to review strategies for dealing with the Soviet Union. After a competitive process in which three teams of advisers promoted the merits of three strategies, President Eisenhower decided to continue the policy of containment developed by President Truman, and did so with a largely unified Administration.

“Over the course of our history, the U.S. has had numerous successful strategies. During the Cold War, both major political parties supported a strategy of containment for confronting the Soviet Union. During World War II, the United States had a widely-supported strategy of focusing first on the War in Europe, and deferring some effort from the War in the Pacific until the Nazi threat was contained. At other times in our nation’s history, we have pursued less successful strategies, such as a strategy of isolationism during the period between World Wars I and II.

“The next President would be well advised to engage in and personally lead a Solarium-type approach to determining a strategy for today’s rapidly changing world. To ensure that a new strategy for America can truly develop support across the political spectrum, Congress should be involved in the process, and to ensure that a new strategy is one that the American people can support, the general outline of the debate should be shared with and involve the American people.

“This speech is the first in a series. In the future I will discuss the objectives and challenges that a new U.S. strategy will need to contend with; some of the means by which the U.S. will likely need to pursue its objectives and their ramifications for the national security apparatus of the United States Government; and some of the options that a Solarium-type review of strategy by the next President would need to consider.

“I hope that my colleagues will join me in urging the next President to address this problem and join with me in a conversation, both in Congress and with the American people, about what today’s strategy should be.”

Wednesday, July 9, 2008

New Second Permanent Secretary at the MOD

New Second Permanent Secretary at the MOD

A Defence Policy and Business news article
2 Jul 08
The Ministry of Defence has announced today, Wednesday 2 July 2008, that Ursula Brennan has been selected to be the next Second Permanent Secretary, succeeding Ian Andrews. She will take up her appointment in the autumn.

Ursula is currently Director General Corporate Performance at the Ministry of Justice, where she has been responsible for finance, human resources, IT, change management, strategy, planning and analysis. Prior to that, she has undertaken a range of senior appointments at the Departments for Environment, Food and Rural Affairs, Work and Pensions and Social Security.

Together with the Vice Chief of the Defence Staff, the Second Permanent Secretary acts as joint Chief Operating Officer for Defence, ensuring that strategic decisions are implemented and managing performance across the board.

The post-holder reports to the Permanent Secretary, chairs the Defence Environment and Safety Board and is a member of the Defence Council and its Service Boards, the Defence Ministerial Committee, the Service Executive Committees and the Investment Approvals Board.

In addition to these responsibilities, the Second Permanent Secretary is responsible for defining and delivering requirements for corporate support services and is the Top Level Budget holder for the Central TLB (Top Level Budget). Top Level Budgets are the largest organisational units within the Ministry of Defence and Armed Forces. Examples include the three Single Services, Defence Equipment and Support and Defence Estates. The Central TLB covers the MOD Head Office, the Defence Intelligence Staff and corporate services such as civilian personnel.

Permanent Secretary Bill Jeffrey said:

"I am delighted that Ursula will be joining the Department. She will bring an exceptionally strong combination of policy development, change management and operational delivery experience to the role, and, as a member of the Defence Board and joint Chief Operating Officer, will play a key part in helping the Department address the challenges we face."

This appointment was approved by the Prime Minister following a cross-Whitehall competition. The date of appointment will be announced in due course.

Pentagon Reopens Bidding on Tanker Contract

Pentagon Reopens Bidding on Tanker Contract

By John J. Kruzel
American Forces Press Service

WASHINGTON, July 9, 2008 – The Defense Department has reopened the bidding process for a multibillion-dollar midair refueling tanker contract, Defense Secretary Robert M. Gates said today.
The announcement comes after the Government Accountability Office last month found improper practices related to the $35 billion contract awarded in February to the Northrop-Grumman/EADS/Airbus consortium, which prompted a protest from rival bidder Boeing Company.

“Industry, Congress and the American people all must have confidence in the integrity of this acquisition process,” Gates said at a Pentagon news conference. “I believe the revised process will result in the best tanker for the Air Force at the best price for the American taxpayer.”

Replacing the Air Force as the “source selection authority” is John Young, undersecretary of defense for acquisition, technology and logistics. He is tasked with appointing an advisory committee to oversee the selection of a bidder to supply the modified commercial aircraft fleet that will phase out the current KC-135 tankers, which are 47 years old, on average.

The Defense Department has ordered Northrop-Grumman to stop work on its contract, and a modified request for proposal could be issued as early as this month. The tanker request will remain in “open competition” until a new contract is awarded, which Gates said he expects will happen before year’s end.

“It is important to remember that this decision does not represent a return to the first step of a process that has already gone on far too long,” the secretary said, referring to the tanker contract as one of the department’s most “time-critical.”

The Boeing protest filed early this year alleged more than 100 violations of proper contracting practices, eight of which were sustained by the Government Accountability Office, the investigative arm of Congress.

To mitigate the chance of a future protest, the Defense Department will carry out the new process with transparency, open communication, clear expectations and fairness, Gates said.

“My hope would be that when we reach the end of this process we will have a solution, will be able to reward a contract and get moving with the contract,” he said.

Northrop Grumman Statement Regarding Department Of Defense Tanker Decision

Northrop Grumman Statement Regarding Department Of Defense Tanker Decision

The Following is a Statement From Randy Belote, Vice President of Corporate and International Communications for Northrop Grumman

WASHINGTON, July 9, 2008 (PRIME NEWSWIRE) -- Northrop Grumman Corporation (NYSE:NOC) applauds Defense Secretary Gates and Under Secretary Young for recognizing that the acquisition of replacement refueling tankers for the Air Force should be put on a path toward quick closure. We are reviewing the decision to ensure the re-competition will provide both companies a fair opportunity to present the strengths of their proposals.

The United States Air Force has already picked the best tanker, and we are confident that it will do so again. Our men and women in uniform deserve nothing less.

The Northrop Grumman KC-45 tanker is needed now and is ready now.