Saturday, October 25, 2008

Week in review (10/19 to 10/25)

The past week was filled with earnings reports from the biggest names in the defense industry. Five of the seven reported by Gulf Coast Aerospace Corridor News had higher earnings, with Goodrich – which has an operation in Foley, Ala. – reporting net income up 34 percent.

Two of the companies were down, with the largest drop experienced by Boeing, down 38 percent. Boeing, which has operations in New Orleans, La., and Fort Walton Beach, Fla., attributed that to both an ongoing strike and supplier problems.

In the case of one company reporting profits, Teledyne Technologies, there was the caveat that it's Mobile, Ala., operation, Teledyne Continental Motors, had to lay off some workers because of slumping demand for aircraft engines and parts.

Northrop Grumman, which has shipbuilding operations in New Orleans and Pascagoula, Miss., and an unmanned systems center in Moss Point, Miss., attributed its performance to higher sales of surveillance systems.

Three contracts with connections to the Gulf Coast were reported during the week. Goodrich Corp. won a four-year contract with US Airways to repair thrust reversers at its Foley, Ala., facility. In another contract, the Air Force is modifying a cost plus fixed fee contract with Raytheon Missile Systems of Tucson, Ariz., for $12.9 million to provide 436 propulsion sections to be installed into AIM-120B Air Vehicles. Eglin Air Force Base, Fla., is the contracting activity. Also, Rush-Peak Three, Titusville, Fla., was awarded a $9.24 million firm fixed fee price contract for construction of a multi-story parking garage at the headquarters of U.S. Special Operations Command compound at MacDill Air Force Base, Fla. The Corps of Engineers in Mobile, Ala., is the contracting activity.

In the area of weapons systems, navigation systems for miniature autonomous systems was the topic of a workshop during the week in Fort Walton Beach, Fla. The workshop was designed to discuss challenges associated with the much smaller unmanned systems that are coming into use. In a very different type of weapons related story, a Virginia class submarine fired a Raytheon Tomahawk Block IV missile from the Gulf of Mexico to engage a simulated target. The flight completes the integration of the Tomahawk cruise missile onto the Navy’s newest fast-attack submarine.

Other significant events during the week, the Air Force is starting two new programs to train drone pilots because the demand for UAVs is so high. As if to underscore that, Raytheon announced during the week that it successfully demonstrated an unmanned aerial system for submarines.

We also told you about China's version of a Global Hawk. It's called the Soaring Dragon, and it's expected to be operational in the next two to three years. Imagine what the capabilities of Northrop Grumman’s Global Hawk will be a few years from now.

In another move towards the continued globalization of the aerospace industry, Italian defense company Finmeccanica, S.p.A acquired DRS Technologies Inc. of Parsippany, N.J., a supplier of integrated defense electronics products, services and support, for $5.2 billion. Pier Francesco Guarguaglini, chairman and CEO of Finmeccanica, said the purchase reinforces the company’s commitment to the U.S. market. DRS will operate as a U.S. subsidiary of Finmeccanica under agreements with the Department of Defense, including a plan to mitigate foreign ownership control and influence (FOCI). Finmeccanica manufactures helicopters, civil and military aircraft, aero structures, satellites, space infrastructure, missiles and defense electronics and has 2,100 employees at 32 sites in North America, not including DRS, which employs about 10,500 people.

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