On the Horizon
Jul 15, 2009

Defence Industry Needs “Talent” Not Manufacturing Jobs
Job cuts in the United States’ defense manufacturing sector are inevitable as the shift in procurement priorities puts the spotlight on “engineering talent,” but the overall market remains resilient, particularly when compared to the wider manufacturing sectors, according to an industry expert. In addition, Congress has illustrated its understanding of the link between funding of large, labour-intensive defence programs and employment levels, says David Baxt, group head of Aerospace and Defense at Jefferies investment bank.

“There are major changes in how money is being spent in the Department of Defense,” comments Baxt. The new U.S. focus on “upgrading existing platforms to perform better in today’s new world order,” vice buying numerous platforms, “tends to reduce the need for manufacturing jobs, but increases the engineering talent needed.” He added: “As engineering talent is more productive in terms of revenue per employee, a net job loss is inevitable.”

However, despite such indications, the number of defence programs that have been cancelled outright is “pretty small,” says Baxt, arguing that some high-profile cancellations of the past (such as Crusader, a self-propelled howitzer programme; the Aerial Common Sensor; or Comanche, a reconnaissance/ attack helicopter) have tended to morph into other programs.

U.S. Defense Budget Cuts Affect Boeing and Lockheed Martin Jobs
In early April, U.S. Secretary of Defense Robert Gates revealed details of a dramatic shift in budget priorities under the Pentagon’s budget request for Fiscal Year 2010, calling for cuts to a series of major U.S. programs. On 23 June the Under Secretary of Defense for Acquisition, Technology and Logistics issued an acquisition decision memorandum announcing the cancellation of the FCS Brigade Combat Team program and replacing it with a modernization plan comprising “a number of separate but integrated acquisition programs.” The memo also cancelled the Manned Ground Vehicles element of the FCS program.

In response, Boeing and Lockheed Martin have instituted new HR staffing levels that will see cuts of about 1,600 defence jobs between them as a result of the newly announced Pentagon budget cuts and the shift in defense priorities. Boeing will cut 1,000 positions from its Boeing Integrated Defense Systems due to the cuts to the Future Combat systems program and the U.S. Army’s Midcourse Defense (GMD) programs.

The U.S. Army will evaluate options for integrating currently fielded mine-resistant ambush-protected (MRAP) vehicles into a suitable follow-on program now that the FCS (Future Combat Systems) has been axed.

The Army Evaluation Task Force (AETF) is slated to receive current legacy MRAP platforms in September to see how the heavily armoured trucks can be integrated with existing FCS equipment. The follow-on program, called the Army Brigade Combat Team Modernization project, will include all of the networking tools and unmanned sensor systems that remained after a substantial restructuring cancelled its manned ground vehicle portion.

The Canadian Forces is forging ahead on plans to upgrade existing equipment such as the LAV IIIs and specialist support vehicles, to repair the damage and wear cause by their extensive use in Afghanistan. The existing fleet of LAVs will be upgraded to the new HLAV standard. In addition, a project has been announced to purchase up to 2300 military and militarized cargo vehicles. Plans are also afoot to purchase new HLAV vehicles in sizeable quantities, which affords the Army more protection and combat capabilities.

New Armoured Ranger Patrol Vehicle
Responding to the need for a single, multirole vehicular solution to the ‘triangular’ problem of payload, mobility and protection, Universal Engineering has demonstrated its Ranger protected patrol vehicle prototype for operations in Afghanistan and future conflicts. According to the Ranger’s program director, the vehicle is capable of providing a hefty payload (up to six tons) of a support vehicle; the mobility of the Supacat’s 4x4 Jackal patrol vehicle; and protection of Force Protection’s 6x6 Mastiff.

Although yet to be officially signed to any specific procurement program, the Ranger was aimed at the UK Ministry of Defence’s Operational Utility Vehicle System program, the Future Rapid Effect System utility variant, Canadian Tactical Armoured Patrol Vehicle programme, and foreign military sales.

Royal Navy Sea Kings MK7 Deployed to Afghanistan
With a shortage of serviceable helicopters for sorties in Afghanistan, the UK MoD has tasked the Royal Navy to make its helicopter assets available to fill the shortfall. With the addition of these new assets, the MoD will be able to address existing problems in a more timely fashion with inspections, modifications and overhauls. Two of the RN’s Sea Kings have already arrived in theatre to assist land forces and another is due in the third quarter of 2009; others already in theatre have been retrofitted and upgraded to permit maximum use.

With a general election in the UK now less than a year away, all three armed services have begun to prepare their arguments to the incoming administration to inform and influence the wide-ranging defence review that will likely follow the election.

With harsh economics likely to be an overriding determinant, it is recognized the review will inevitably lead to difficult decisions that may adversely effect the Royal Navy. While the UK’s number one defence priority, under the current government, is counter-insurgency in land-locked Afghan­i­stan, naval operations finds itself often appearing out of step as they argue the need to maintain a credible multirole maritime expeditionary capability. A prime example of the importance of the Royal Navy is the deterrent provided by their Trident nuclear submarine force. However, the Royal Navy leadership is pragmatic enough to know that it will likely be forced to make some unpalatable cuts.

Russia’s Black Sea Fleet to Move
The Russian Federation Navy is expected to relocate its Black Sea Fleet from the Crimean port of Sevastopol in Ukraine to a new naval base that is currently under ­construction at Novorossiysk, Russia. However, it appears that the new port facilities will not be available until 2020 – eight years later than originally reported. The delay could leave the fleet without a home for three years because Russia’s lease on the facilities in Sevastopol is due to expire in 2017 and the Ukrainian government appears unwilling to extend the existing agreement. The revised date of 2020 was confirmed by Nikolay Abroskin, head of Russia’s Federal Agency for Special Construction, on 14 July.

AIR Force
UK Announces New Helicopter ­Support Plans
In a written response to a parliamentary question, the UK Ministry of Defence (MoD) released, on 16 July, its helicopter support plans for the next decade. MoD’s response to the Defence Select Committee report, entitled Helicopter Capability, stated that the government was committed to investing GBP6 billion (US$10 billion) in the UK’s helicopter capability over the next decade.

The statement also announced that the Puma service-life extension program will proceed, and that all Lynx AH.9s and Chinooks will be fitted with more powerful engines. The GBP6 billion investment will also include a service-life extension of the Royal Air Force’s Westland Puma HC1 transport helicopters, giving them a ­capability similar to the more advanced Super Puma/Cougar helicopter. In officially confirming the MoD’s commitment to the Puma upgrade, officials stated: “It is not feasible to advance the purchase of the Future Medium Helicopter and forego the Puma Life Extension Programme.” This upgrade will include new engines, cockpit and avionics worth more than GBP300 million.
Rob Day, a military historian and analyst, retired from the Canadian Forces in 2007
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