Saturday, January 31, 2009

Week in review (1/25 to 1/31)

It's an activity in the Gulf Coast region you don't hear about very much. It's not high profile like Stennis' rocket engine test stands, Keesler's Hurricane Hunters, Pensacola's Blue Angels or the weapons testing programs at Eglin. But it’s been keeping an eye on space for 40 years.

It's Eglin Air Force Base’s “Site C-6.” A rededication ceremony for the site was held this month marking four decades of space surveillance with its Phased Array Radar. The vice commander of Air Force Space Command was in town for the event.

Construction of the site got underway in 1962, and in 1968 the 20th Surveillance Squadron began tracking satellites. From 1971 to 1984 the squadron was the Alternative Space Surveillance Center and provided computational support to Cheyenne Mountain Air Station, Colo. In 1975 the 20 SURS began to monitor for submarine-launched ballistic missiles and space surveillance was a secondary mission, and in 1988 it began tracking deep space satellite.

The unit was renamed the 20th Space Control Squadron in 2003, and the next year it assumed responsibility for 20 SPCS Detachment-1 in Dahlgren, Va., and the AN/FPS-133 Space Surveillance Radar Fence located along the 33d parallel of the United States. The 20th Space Control Squadron today tracks more than 16,000 near-Earth and deep-space objects for the 21st Space Wing, Peterson Air Force Base, Colo. (Story)

- TANKER: The aerial tanker project came back into the news during the past week when Rep. John Murtha, D-Pa., visited Mobile, Ala., to take a look at the Brookley Industrial Complex site where Northrop Grumman and teammate EADS hope to build tankers for the Air Force. One of the more notable comments he made after the visit was learning that cargo planes would also be built in Mobile if Northrop/EADS wins the contract.

Murtha said that the Pentagon is moving forward and expects to have a request for proposals in the spring, but he said some alternatives are being considered on Capitol Hill. The Mobile Press-Register reported that during the luncheon, Murtha said the Air Force should buy aircraft from both Boeing and Northrop/EADS to break the stalemate. Murtha said he's convinced that's the best alternative, but he has to convince others.

The $40 billion tanker project has been hanging around for a long time now. The Northrop/EADS team won the contract last February to build the tankers in Mobile, but a Boeing protest was upheld. The Pentagon later decided to let the new administration take on the issue. Aviation Week during the week reported that the option of a split buy has been picking up steam on Capitol Hill. The Pentagon has opposed duel-sourcing, but some are beginning to think a split buy is the only politically palatable way to move forward.

One thing that occurred during the week that may make it more palatable for Boeing to split the tanker project was EADS' decision not to bid on the contract to supply the wide-body jets that will serve as Air Force One. The Pentagon invited the European Aeronautic Defence and Space Co. to submit a bid, but EADS said during the week that it wants to remain focused on military contracts. In this region, EADS builds helicopters for the U.S. Army in Columbus, Miss., and EADS CASA has a maintenance center in Mobile and an Airbus Engineering Center.

U.S. Defense Secretary Robert Gates said he plans to meet with top Air Force officials in the next few weeks to begin planning for a rematch to replace the KC-135 tankers. This promises to be a major story throughout the year.

- SPACE: The first Space-Based Infrared System geosynchronous orbit satellite, built by Lockheed Martin for the Air Force, has completed a key test using new flight software. The SBIRS program provides early warning of missile launches, technical intelligence and battlespace awareness. The spacecraft eventually will be launched aboard an Atlas V. One of the SBIRS work locations is the Lockheed Martin Space & Technology Center at Stennis Space Center, Miss., which provides the core system for the satellite.

Incremental steps forward also occurred during the week for the Constellation Program, a crucial program for both Michoud Assembly Facility in New Orleans and Stennis Space Center in Mississippi. Pratt & Whitney Rocketdyne’s Common Extensible Cryogenic Engine successfully demonstrated capabilities required for NASA’s Altair lunar lander during ground testing in West Palm Beach, Fla. Pratt & Whitney Rocketdyne has an operation at Stennis.

The High Bay Facility of the Operations & Checkout Building at Kennedy Space Center, Fla., is getting closer to building the new Orion crew exploration vehicle. Built in 1964, the O&C facility has been the final integration and checkout building for manned spacecraft. The State of Florida, Lockheed Martin and NASA invested $55 million renovate the facility for the Constellation Program. Flight hardware being fabricated nationwide will be integration at the O&C facility. Among the hardware will be large structures and composite parts for Orion fabricated at the Michoud Assembly Facility in New Orleans.

There was also a setback of sorts during the week for an innovative program being developed at Andrews Institute in Gulf Breeze, Fla. Gov. Charlie Crist asked for an inspector general's inquiry to see if the director of a new space-tourism medical program at the institute got his job after setting up the $500,000 in state grants to create it.

- MILITARY: Naval Air Station Pensacola had a $1.15 billion economic impact on local communities, according to an impact report. The base employed more than 21,000 military, civilian and contract employees in 2008. The report combined salaries for military, civilian and contract personnel along with local contract spending to reach the total. Other bases in the region include NAS Whiting Field in Milton, Eglin Air Force Base and Hurlburt Field, near Fort Walton Beach, Fla., and Keesler Air Force Base in Biloxi, Miss. The Navy is also the largest tenant at Stennis Space Center, Miss.

The Navy held a public meeting during the week in Summerdale, Ala., to discuss how the Navy’s new training aircraft may impact residents who live near outlying fields. About 200 people showed up at the Summerdale Community Center. The Navy is upgrading its trainer to a more powerful T-6B, and that will require more runway space at outlying fields.

Two pilots from F-16 Fighting Falcon squadrons at Luke Air Force Base, Texas, are among the pilots tapped to form the initial cadre for the F-35 Lightning II. The Marine Corps earlier this month selected six pilots for their version of the F-35 and will arrive at Eglin later this year or early next.

Keesler Air Force Base airmen and two WC-130J Hurricane Hunter aircraft deployed to Anchorage, Alaska, in early January for a month-long mission in support of the 2009 Winter Storm Reconnaissance Program. The 403rd Wing team includes Reserve aircrews, operations, maintenance, aerial porters, and others to improve winter storm forecast models.

- EARNINGS: Three companies with operations in the Gulf Coast Aerospace Corridor released fourth-quarter earnings reports during the week. Massachusetts-based Raytheon Co., which has operations in Northwest Florida, reported $466 million in adjusted income from continuing operations; Chicago-based Boeing, which has operations in New Orleans and Northwest Florida, reported fourth quarter revenues declined 27 percent to $12.7 billion; Virginia-based General Dynamics, which has operations in Northwest Florida and Stone County, Miss., reported fourth quarter revenue increased to $7.9 billion.

- CONTRACTS: Three defense contracts of interest to the Gulf Coast region were awarded during the week. The largest was a $276 million contract awarded by the Air Force to Los Angeles-based Northrop Grumman for operations and maintenance support of the RQ-4 Global Hawk. The UAVs are made in part in Moss Point, Miss.; Orlando, Fla.-based Hensel Phelps Construction was awarded a $121.1 million contract for construction of the Special Forces Complex at Eglin Air Force Base, Fla.; Kentucky-based L3 Communications Corp., Integrated Systems Joint Operations won a $6.1 million Air Force contract exercising an option for the production and installation of dual rails to the MC-130P. The work will be performed in Crestview and Fort Walton Beach, Fla.

- TEAMING UP: Companies with ties to this region also signed contracts with one another. Minnesota-based Alliant Techsystems agreed to a $200 million contract with Rolls-Royce to produce composite aft fan cases for the new Trent XWB engine that will power the Airbus A350 XWB. Trent XWB engines will be tested at Stennis Space Center, Miss., beginning in 2010 or 2011. Both ATK and Rolls-Royce have operations in the Gulf Coast; Airbus selected Goodrich for two projects. In one, Goodrich will supply wheels and carbon brakes for the A350 XWB. Another agreement calls for Goodrich to provide maintenance support Singapore Airlines’ fleet of 19 leased Airbus A330 aircraft. Goodrich has a service center in Foley, Ala., and Airbus parent, EADS, has two operations in Mobile, Ala. – the CASA service center and Airbus Engineering Center. It also operates American Eurocopter in Columbus, Miss.

Thursday, January 29, 2009

The value of field work

A Congressman who will play an influential role in the contest between Boeing and the Northrop Grumman/EADS team over the aerial tanker said Thursday that you get a different perspective when you get out of Washington and go out in the field.


Rep. John Murtha, D-Pa., chairman of the House Appropriations Subcommittee on Defense, visited Mobile, Ala., Thursday to talk to officials and see the site where EADS North America hopes to assemble the tankers to replace the Air Force's aging fleet. He also visited a Mobile shipyard involved in building next-generation warships. No doubt it was all designed to show Murtha the critical role Mobile plays in the nation's defense.

Murtha, who said the visit was very helpful, said before departing that he was particularly impressed with the teamwork he saw in Mobile. But he also said he learned something he apparently didn’t know – that the tanker contest may impact another major Mobile project: building Airbus cargo planes.

“If we work the contract out for the tankers, you not only do a tanker there but you do a cargo airplane there,” Murtha said about the EADS tanker site, currently just an empty piece of land at Brookley Industrial Complex. The European Aeronautic Defence and Space Co. said last year that it will build a cargo version of its A330 in Mobile if it wins the tanker contest. But that has been lost in the sometimes heated debate over the tanker.

The visit to Mobile is not all that Murtha has on his agenda. He also plans to visit Washington State soon to get a better sense of the project from that state’s and Boeing’s perspective. Little doubt he’ll find it’s just as important there, especially in light of the announcement that Boeing expects to cut 10,000 positions because of the ailing world economy.

Murtha said the Pentagon is moving forward and expects to have a request for proposals in the spring, but he said that during the appropriations process his committee is looking at alternatives. He did not provide details, but at least one option is widely known: a split buy. That option is apparently gaining traction. (Story)

It might, in fact, be the only remaining option to a battle that has been going on for years. In its most recent iteration, the Northrop/EADS team won the contract in February 2008, but a Boeing protest was upheld by the Government Accountability Office. The Pentagon later decided to let the new administration take on the issue.

The split buy option has been rejected by the Pentagon as too costly, and Defense Secretary Robert Gates has continued to hold that position. But political pressure might wind up changing that position. In an era where the economy is in a tailspin and the new administration has made clear its desire to do what it can to save jobs, a split buy might be the best of both worlds.

It would save jobs in Washington State - they likely are already thrilled that EADS decided not to compete to build Air Force One - while at the same time create jobs in Mobile and the Gulf Coast region that did not exist. And the possibility of building cargo planes in Mobile means even more jobs in this country. That likely doesn't sit well with EADS workers in Europe, but that's the global economy.

A split buy would also make it so much easier for Alabama political leaders who, no doubt, have been torn in two directions. While they would like to get EADS, they can't afford to alienate Boeing. The Chicago-based company is a major player in Alabama, and its health of upmost importance to the state. Boeing is the largest aerospace company in Alabama, and contributes about $1.2 billion each year to the state economy.

Boeing is so important to Huntsville, the company was recognized this month for its long-time commitment to the city and named the Huntsville/Madison County Chamber of Commerce's Industry of the Year. Boeing, which first set up operations in Huntsville in 1962, is the No. 3 employer in Huntsville/Madison County with some 3,100 employees at 17 locations. The company’s main facility is 690,000-square-foot, four-building complex on 110 acres at the Jetplex Industrial Park, near the airport. (Story)

Mobile officials little doubt envision something that significant – if not more so – resulting from this initial EADS project. And if a split buy is the way to help make that happen, so be it.

Saturday, January 24, 2009

Week in review (1/18 to 1/24)

If there’s one thing you can take for granted in the global aerospace industry, it's that today's competitor might very well be tomorrow's partner.

Last week in Paris, Eurocopter CEO Lutz Bertling said the company is looking for American partners on a proposed European heavy-lift helicopter and its bid for the U.S. Army's Armed Reconnaissance Helicopter. The European helicopter maker, an EADS subsidiary, is in early talks with Boeing and Sikorsky, a United Technologies company, as potential partners for a Future Transport Helicopter. (Story)

Boeing is, of course, EADS' rival in the bid for the U.S. Air Force aerial refueling tanker project. But that clearly doesn't stop its subsidiary, Eurocopter, from possibly working with Boeing on this project.

Aerospace companies that hope to win lucrative contracts will team up with others that offer them the best chance to win. It's something political leaders who get too closely aligned with one company and bad-mouth another need to keep in mind.

- Rep. John Murtha, who could play a key role in the battle over the Air Force refueling tanker contract, will be in Mobile Jan. 29 to tour the proposed Northrop Grumman/EADS assembly site. The Pennsylvania Democrat chairs the House Defense Appropriations Committee and was invited by Reps. Artur Davis and Jo Bonner.

Northrop/EADS was awarded the tanker contract last February, but Boeing's protest was upheld and the Pentagon later opted to cancel the contract and let the new administration decide.

Murtha right now likely has other things on his mind. Federal agents last week raided two small Pennsylvania defense contractors – Kuchera Industries and Kuchera Defense Systems – that were given millions of dollars in federal funding by Murtha. The two operations were raided by the Defense Criminal Investigative Service, the FBI and IRS as part of an ongoing investigation.

Pentagon auditors have been looking at the use of earmarks, special-interest spending items directed to a specific company by members of Congress. An Oct. 30, 2007 story in The Wall Street Journal identified Murtha as the largest earmarker in the House.

- While on the subject of Mobile, the Federal Aviation Administration during the week awarded $1.4 million to the Mobile Regional Airport for upgrades, according to Sen. Richard Shelby. The money will be used to repair storm drainage systems, replace the beacon and tower and other projects.

- The Marine Corps recently selected six pilots to become some of the first instructors for the Marine version of the F-35 Joint Strike Fighter. The Marines will travel to Eglin Air Force Base, Fla., where the training detachment for the F-35B will be located, by the end of this year or beginning of next.

The three variants of the JSF are the Air Force F-35A, Navy F-35C and Marine Corps F-35B. A short takeoff/vertical landing F-35s rolled off the line at the Lockheed Martin plant in Fort Worth, Texas, during the week and will be used to test the avionics systems in the summer of 2009. The aircraft, designated BF-4, will carry Northrop Grumman radar and integrated communications, navigation and identification suite and the BAE Systems electronic warfare system. Five F-35s are already undergoing testing.

- The officer who will become commander of Eglin Air Force Base’s Air Armament Center, Maj. Gen. Charles Davis, said this month that the F-35 Lightning II is on track despite an earlier budget shortfall. At a roundtable discussion in Washington, the departing program chief for the F-35 Lightning II also predicted that Israel, Singapore, Spain and Japan will join eight other international partners in the JSF program. At Eglin Davis is replacing Maj. Gen. David Eidsaune, who will become director of operations at headquarters Air Force Materiel Command at Wright-Patterson Air Force Base in Ohio.

- Eglin Air Force Base wants to use some of a 17-acre beachfront test site as a military resort. The proposed Emerald Breeze Resort could provide a revenue stream. Test Site A-5 is a mostly bare parcel next that has a small storage building with antennae only occasionally used to support test missions. The military pictures a 250-room resort. The Air Force will accept public comments until March 12.

- A classified spy satellite for the U.S. National Reconnaissance Office was launched from Cape Canaveral Air Force Station last week onboard a United Launch Alliance Delta IV powered by three Pratt & Whitney Rocketdyne RS-68 engines and one upper-stage RL10B-2 engine. The National Reconnaissance Office is responsible for operating overhead reconnaissance missions for the Department of Defense and the intelligence community. Pratt & Whitney Rocketdyne has an RS-68 operation at Stennis Space Center in Mississippi.

- The Air Force announced this past week the finalists for headquarters of 24th Air Force, a new numbered Air Force focused on the cyber mission – protecting the nation from attacks on computers and other communications systems. The bases are Barksdale Air Force Base, La.; Lackland, Texas; Langley, Va.; Offutt, Neb.; Peterson, Colo.; and Scott, Ill. A final selection will be made in June. Original plans called for a Cyberspace Command, but last fall the Air Force opted to make it a numbered Air Force. Keesler Air Force Base, in Biloxi, Miss., was among the candidates for the command.

- Three companies with operations in the Gulf Coast Aerospace Corridor released earnings reports during the week, and one released information that sets the stage for its report early next month. Northrop Grumman said it will record a fourth quarter loss of $3 billion to $3.4 billion, due to a drop in the book value of its shipbuilding and space technology activities. The company determined that the book value of the former Litton Shipbuilding and TRW, both purchased at the start of the decade, exceeded the fair value. Teledyne Technologies profits rose 24 percent for 2008 to $122.2 million, with fourth quarter profit up 16 percent to $30.8 million. The company's Mobile subsidiary, Teledyne Continental Motors, lost $2.8 million in the fourth quarter compared to a $3 million profit in the same three months of 2007. Lockheed Martin reported fourth quarter 2008 net earnings of $823 million - $2.05 per diluted share - compared to $799 million in 2007. Net sales were $11.1 billion, compared to fourth quarter 2007 sales of $10.8 billion. Cash from operations for the fourth quarter of 2008 was $997 million, compared to $425 million in 2007. Growth in the aerospace activities of Sikorsky and Pratt & Whitney boosted United Technologies’ fourth quarter 2008 income by 8 percent to $1.15 billion. That compares with $1.1 billion a year earlier. Earnings per share were up 14 percent to $1.23.

- There were at least four contracts awarded during the week with ties to the Gulf Coast Aerospace Corridor. Northrop Grumman won a $40 million modification to a previously awarded contract for procurement of three low rate initial production Fire Scout vertical takeoff and landing tactical unmanned aerial vehicle units and associated items. The final assembly work will be done at the Northrop Unmanned Systems Center in Moss Point, Miss. Bell-Boeing Joint Project Office, Amarillo, Texas, was awarded a contract with an estimated value of $581.4 million to provide Joint Performance Based Logistics support for the Marine Corps, Air Force, and Special Forces aircraft during the production and deployment phase of the V-22 Program. Some 6 percent of the work will be performed in Fort Walton Beach, Fla. EADS North American Defense, Arlington, Va., was awarded a $25.6 million contract for funding of the Army's Light Utility Helicopter contract for five UH-72A and supporting mission kits and equipment packages. Work will be performed at Columbus, Miss. EADS North America also has operations in Mobile, Ala. AeroVironment Inc., Simi Valley, Calif., was awarded a $17 million contract to procure a digital data link upgrade for the Raven RQ-11B Unmanned Aircraft System and FY 09 engineering services and accounting for contract services. Work will be performed at Simi Valley, Calif. AeroVironment has an operation at Navarre, Fla.

Saturday, January 17, 2009

Week in review (1/11 to 1/17)

Those who live around any of the Navy's outlying landing fields in the Gulf Coast will want to take note of a story that occurred as the week drew to a close. The Mobile Press-Register had a story saying the new training aircraft the Navy will be putting in service will likely mean the expansion of runways and safety zones around outlying fields. (Story)

The story focused on the four fields in Baldwin County, Ala., that will be impacted when the T-6B Texan II replaces the T-34C. But no doubt it has implications for other OLFs in the region, and there are plenty.

Naval Air Station Whiting Field in Milton, Fla., is where the military does initial training for military pilots. Anyone who lives here is familiar with the orange and white military aircraft. This year the base will begin a four-year plane switch. And that will mean some changes at the outlying fields essential for the training. The OLFs are where the student pilots do touch-and-go landings, maneuvers and other exercises in sparsely populated areas. The number of training flights also will increase.

The Navy plans to hold meetings so the public is fully aware of what’s going on.

This region is certainly military friendly, but that doesn't mean there are not occasional problems associated with encroachment. Building too close to a base with a flying mission can cause problems. Keesler Air Force Base in Biloxi, Miss., had to deal with the issue during the building of high-rise condos and casinos. Naval Air Station Pensacola, Fla., has also dealt with the issue. Florida has worked with environmental groups to buy land around bases, which seems to make everybody happy.

But it's not always a flying issue. Right now Eglin Air Force Base, Fla., and the nearby city of Valparaiso are trying to figure out how to deal with the additional noise the F-35 Joint Strike Fighter will bring when the joint training center opens at the base.

When the outlying fields were first established, they were in rural areas with little population. But time has changed that, and some neighborhoods have been established around some of the OLFs. We’ll keep an eye on this one.

- There were several stories during the past week about Northrop Grumman’s Global Hawk. An announcement is expected soon that NATO will buy eight Global Hawks in a deal that would be worth more than $1.3 billion. NATO is targeting a 2012 entry-into-service date for the airborne alliance ground surveillance fleet.

Any additional Global Hawk sales are important for Moss Point, Miss. Portions of the fuselage are built at the Unmanned Systems Center. But this sale will also have an impact on Melbourne, Fla., which will get another 125 engineers. The Global Hawk program is managed in Melbourne.

The other Global Hawk story was the unveiling at NASA’s Dryden Flight Research Center at Edwards Air Force Base, Calif., of the first Global Hawk unmanned system dedicated to earth science research. NASA plans to use them to support its Science Mission Directorate and the Earth science community, which requires high-altitude, long-endurance, long-distance airborne capability. That’s of high interest to John C. Stennis Space Center in Mississippi, which is home to a large earth science and geospatial community, including NASA’s Science and Technology Division.

- Speaking of robots, researchers at Tyndall Air Force Base near Panama City, Fla., have played a key role in developing a robot that can refuel planes on the ground. The Air Force Research Laboratory's Materials and Manufacturing Directorate at Wright-Patterson Air Force Base in Ohio is developing the automated system for the F-35 Joint Strike Fighter. It was researchers at the directorate's Airbase Technologies Division at Tyndall that developed the robot.

- While we’re on the subject of refueling, if you think the fight between Boeing and the Northrop Grumman/EADS team over the Air Force tanker contract project was bitter, just wait for the fight that’s expected over Air Force One.

The military officially launched the search for a new widebody presidential jet when it issued a request for information. Boeing has already said it considers the contract a priority, and Airbus is right now considering the RFI. What we may be looking at is a new battle that will pit Boeing’s 747 against the Airbus 380. Boeing has provided Air Force One for more than 50 years. That will likely make the fight over the tanker seem like child’s play. Boeing wants to build the tankers in Washington State, and Northrop/EADS want to build them in Mobile, Ala.

- The chancellor of the Alabama Community College System said during the week that plans for a stand-alone aviation college with a branch in Mobile, Ala., would be put on hold. Not surprising, Bradley Byrne said the issue was budgetary. He first announced plans for the Alabama Aviation College in October 2007, and he remains committed to the idea, but not just yet. Whether the indecision of the Pentagon over the Air Force tankers played any role wasn’t mentioned.

- Air travel may be down nationwide, but don’t tell that to the folks at Gulfport-Biloxi International Airport. Officials from that airport said during the week that more people flew into and out of that airport in 2008 than ever before - 6.5 percent more, in fact. In 2008 the airport saw 974,861 passengers.

- There were at least five contracts awarded during the week with ties to the Gulf Coast Aerospace Corridor. Raytheon Co., of Tucson, Ariz., got four of those contracts. The largest was one for $38.7 million, when the Air Force exercised an option for the production of 46 R7 HARM Targeting System pods and initial spares. The same day the Air Force obligated $4.5 million to Raytheon to provide for the High-Speed Anti-Radiation Missile Targeting Systems Software Upgrade Program. Earlier in the week the Air Force awarded a $16.2 million contract to Raytheon to provide a High-Speed Anti-Radiation Missile Targeting Systems Software Upgrade, and also modified a Raytheon contract for $6.7 million to the AMRAAM Production Lot 22 contract. The contracting activity in all of the above was Eglin Air Force Base, Fla. The other company awarded a contract was CSC Applied Technologies of Fort Worth, Texas. This one was $29.1 million and involved the Air Force exercising an option to provide for base operation support at Keesler Air Force Base in Biloxi, Miss. Keesler was the contracting activity.

Wednesday, January 14, 2009

The cloudy crystal ball

In the current economic environment, trying to figure out what will happen to aerospace programs important to the Gulf Coast is difficult if not impossible, given all the variables. But two things to watch: EADS' decision to reduce investment expenses to conserve cash, and the NASA administrator's comment that the agency may have to cut back on contractors if funding remains flat. Both have implications for the Gulf Coast.

During an annual news conference this week in Newport, Wales, CEO Louis Gallois said the European Aeronautic Defense and Space Co. decided at the 11th hour to abandon plans to purchase an unnamed defense company in the United States. The reason: It wants to conserve cash so it can offer credit financing to airlines to ensure they honor contracts. Gallois said one way to conserve money is to reduce investment expenses, according to Reuters. Bloomberg reported EADS may also cut production. (Reuters, Bloomberg, BusinessWeek)

The purchase of U.S. companies is just one sign of EADS' commitment to become a "citizen" of the U.S. aerospace market. EADS for some time now has made it clear that it plans to compete against U.S. giant Boeing for a number of aircraft platforms – perhaps even Air Force One. The most high profile competition to date has been the Air Force aerial refueling tanker. EADS and partner Northrop Grumman won that contest 11 months ago, but Boeing's protest was upheld and the Pentagon decided to punt to the new administration. Still, EADS continued looking for potential purchases, such as in the communications and sensor field.

Over the past few months both sides of the tanker fight have indicated they'll continue to pursue the Air Force project. But in the current economy, things can change overnight. Consider what Gallois said in the Reuters story: "We were on the way to sending the check and we pulled out at the last minute." It’s the old don't-count-your-chickens-before-they-hatch.

For what it’s worth, this isn’t the first time EADS backed off a planned purchase. In 2007 it opted to abandon the acquisition of a U.S. military drones designer after a split on its board, according to Reuters. In this latest target, Gallois declined to name the company but said it had recently won a Pentagon contract. The price tage on the aborted deal was in the region of $1 billion.

This belt-tightening shouldn't surprise anybody. Airbus and rival Boeing both saw new aircraft business halve last year after a record 2007. Boeing announced just last week that it's going to cut 4,500 workers form its commercial aircraft sector. There will be a lot of interest when Boeing releases its financial results for the fourth quarter and the full year Jan. 28.

So with Boeing and Airbus facing tough times, what will this do to the tanker contest?

Both sides have invested a lot of money in pursuit of the tanker project, not only through spending related directly to the competition, but additional monies spent on the advertising campaigns designed to state their cases. How much more will they spend, given the very real possibility that the loser of the next battle will likely file a protest? Certainly $40 billion is a huge prize, and that's just the start. And a default win is something I doubt anybody wants.

Consider also that EADS' already has a significant investment in this region. It operates the American Eurocopter plant in Columbus, Miss., and has two operations in Mobile - the Airbus Engineering Center and the EADS CASA maintenance operation. EADS has proven it's intent on investing in this country, but the question now is one of timing. The current recession has to make a company think twice about where to place its cash.

Is a split tanker buy beginning to look like the most viable alternative? We'll have to see.

NASA, too, is worried about finances.

During a news conference Tuesday, departing NASA administrator Michael Griffin warned that NASA would have to lay off an unspecified number of contractors if Congress freezes the agency's spending. He said Congress' decision to hold NASA spending at the 2008 level of $17.3 billion – rather than the requested $17.6 billion – could trigger cutbacks. Griffin declined to specify the locations, but did tell the Houston Chronicle cuts would largely come from the Constellation Program. (Story)

Both Michoud Assembly Facility in New Orleans and Stennis Space Center in Mississippi are highly interested in any NASA budget issues. As with other NASA facilities, they are in a state of transition between the Space Shuttle program and Constellation – NASA's push to get astronauts back to the moon and beyond. And while gearing up for the change, they can't help but be aware of the variables. There's a chance the shuttle program will be extended, a move that would likely set back the time frame for Constellation, despite president-elect Barack Obama's formerly stated desire to speed up that program.

And then there's the issue that's being debated largely behind the scenes. The United Launch Alliance, a Boeing-Lockheed joint venture, favors shelving development of the Ares I to launch the Orion crew capsule in favor of using the Atlas V or the Delta IV rockets that have been used by the Pentagon to launch military satellites. (Story)

We'll keep you posted.

Saturday, January 10, 2009

Week in review (01/04 to 01/10)

For those who believe the area between Michoud Assembly Facility in New Orleans and Stennis Space Center in Mississippi will one day develop into a high-tech, space-related corridor - much like the corridor in Huntsville, Ala. - a small step in that direction was taken during the past week.

Northrop Grumman’s 3001 International broke ground Wednesday on a new 20,000 square-foot facility in Slidell, La., the town between Michoud Assembly Facility in New Orleans and Stennis Space Center, Miss. The new office consolidates the existing Slidell 3001 office with the office the company had at Stennis Space Center. The new operation brings with it 50 new positions.

Northrop in October 2008 bought 3001, a provider of geospatial data production and analysis, including airborne imaging, surveying, mapping and geographic information systems. Northrop highlighted the acquisition in October at the U.S. Geospatial Intelligence Foundation's symposium in Nashville.

So is this a negative for Stennis, seeing 3001 leave? Not in the least. Companies at the Mississippi Enterprise for Technology, a business incubator and technology transfer operation at Stennis, are expected to one day leave and grow outside the incubator. That's chalked up as a success. That's the whole purpose of an incubator.

Now consider the context: NASA hopes to eventually see the unused acreage around Michoud – there’s about 800 acres – develop into an advanced manufacturing research park. And there's good reason to think this way. At the center of this park is the National Center for Advanced Manufacturing, a NASA/state/academia/industry partnership. On top of that, the University of New Orleans plans to create a research park in Slidell, similar to the UNO Research and Technology Park on UNO's campus. And just outside Stennis there's Stennis International Airport Airpark and the still-developing Stennis Technology Park.

Alliance Insight, the quarterly newsletter from the Mississippi Gulf Coast Alliance for Economic Development, has a background story you may want to read. The story appeared in the January 2008 issue.

None of this will happen overnight. It certainly didn't in Huntsville. If you're not familiar with what happened in that north Alabama city, let me give you the short version. That city in the '60s began to leverage the presence of NASA and the Army missile experts to create one of the most technology-oriented economies in the nation. An early decision to turn 3,000 acres into a research park, along with the development of a Huntsville campus of the University of Alabama, helped transform the city. Today, Cummings Research Park is the second largest research park in the nation and fourth largest in the world.

Thinking this region can do the same is the first step towards making it happen.

--Also during the week, NASA named Patrick Scheuermann as the deputy director of John C. Stennis Space Center, NASA's primary testing ground for propulsion systems. The promotion of Scheuermann, the center's associate director since August 2006, became effective Dec. 21. Scheuermann previously was chief operating officer of Michoud Assembly Facility in New Orleans. It's likely Scheuermann and others will be working for a new boss later this month. NASA Administrator Mike Griffin last week turned in notice that he'll be leaving Jan. 20. He doesn't expect to be offered a chance to stay on after President-elect Barack Obama takes office.

In another NASA-related item, the agency last week issued a request for proposals for the Ares V rocket. The rocket will perform heavy lift and cargo functions as part of the next generation of spacecraft that will return humans to the moon - the Constellation Project. Proposals are due to NASA's Marshall Space Flight Center in Huntsville, Ala., Feb. 9. Selections will be made in the spring of 2009.

--Northrop Grumman in the past week announced it has combined seven units into five to lower costs. The Integrated Systems group was combined with Space Technology to form the Aerospace Systems unit. The Information Technology and Mission Systems groups have combined as Information Systems. The new aerospace unit includes Moss Point, Miss., and other facilities that build the Global Hawk and Fire Scout unmanned aerial systems. 3001 International falls into the Information Systems group. At the end of the week Boeing announced steps it will take to reduce costs. The commercial aircraft sector of Boeing will drop 4,500 positions this year. It doesn’t appear it will have an impact on Boeing's operations in New Orleans or Northwest Florida, which are involved in space and weapons systems, respectively.

--All-quadrant 7.62mm Gatling guns are on track to be installed underneath seven Air Force Special Operations Command CV-22 Ospreys this year. The 413th Flight Test Squadron is testing the turret-mounted gun at Eglin Air Force Base, Fla., and the system has passed a series of tests. Critics had complained that the craft had no all-quadrant weapons, but in 2007 a contract was awarded to BAE Systems to deliver seven Remote Guardian Systems and install them onto CV-22 Ospreys for AFSOC deployments.

In another weapons-related news item, Lockheed Martin successfully conducted the first live warhead ground launch test of the DAGR guidance kit for the 2.75-inch rocket. Conducted at Eglin Air Force Base, Fla., the test demonstrated DAGR's vehicle penetration and time-delayed fuzing feature. Lockheed Martin engineers fired a DAGR-equipped rocket armed with a live warhead at a stationary vehicle. It penetrated the side of the vehicle before detonating inside. The system is designed for rotary-wing Hellfire platforms, including the Cobra, Apache, Seahawk, Kiowa and Tiger.

--Also during the week, Building 22 at Eglin Air Force Base has been renamed the Register Physical Sciences Center, in honor of the late Henry I. Register. Register spent more than 50 years at Eglin and was one of the pioneers of laser-guided smart weapons.

--At least four contracts were awarded during the week with some connection to the Gulf Coast Aerospace Corridor. The Boeing Co. received two contracts totaling $217.1 million from the Department of Defense for continued production of more than 4,000 Joint Direct Attack Munition tail kits and 2,500 Small Diameter Bombs and associated carriages; Northrop Grumman won a contract for $13.4 million for engineering, manufacturing and development activities in support of the Global Hawk Program; Lockheed Martin and the Coast Guard exercised contract options valued at $13.25 million to install mission systems aboard two additional HC-130J aircraft used in the Deepwater Program; and Raytheon was awarded a $12.2 million contract by Eglin Air Force Base, Fla., to provide a miniature air launched decoy jammer Block II program contract for a 14-month concept refinement study for data link and increased effective radiated power.

Sunday, January 4, 2009

Week in review (12/28 to 01/03)

It's a story playing out behind the scenes, for the most part. But it will have an impact on the Gulf Coast Aerospace Corridor. If it turns out one way, it could slow down considerably the growth of the region around the Michoud Assembly Facility in New Orleans.

There's an ongoing debate about the launch vehicle NASA plans to use to send astronauts back into space in the Constellation Program. The Orlando Sentinel last week published about as detailed a story about the issue as any I've seen. (Story). The New York Times also did a piece about NASA's future. (Story)

To bring you up to speed, NASA a few years back opted to develop the Ares I and Ares V to bring astronauts and payload, respectively, back into space. Ares V is the heavy lift version, designed to bring supplies. Ares I is designed to lift astronauts and the Orion vehicle. NASA chief Michael Griffin has maintained that Ares I is the safest, most reliable system. Modified military rockets, specifically Atlas V and Delta IV, can’t handle the chore, he says.

But not everyone agrees. The Sentinel says interviews and documents it obtained show military rockets can do the job for billions less and possibly sooner than Ares I. You can be sure that during this year the issue will continue to be debated.

But neither story, of course, discusses how a decision on the launch vehicle could impact the Gulf Coast region. As it stands now, the second stage of the Ares I will be built by Boeing at Michoud Assembly Facility in New Orleans, which is also where the final assembly integration and checkout of the Ares I avionics systems will be done as well. The first stage is being built by Alliant Techsystems (ATK) at its Thiokol plant in Utah.

Stennis Space Center in Mississippi is also involved in the Ares I. That’s where J-2X engines used in Ares I are being assembled and tested by Pratt & Whitney Rocketdyne. Stennis is building a new test stand for that very purpose, and an existing stand is also being modified.

The alternative launch systems, Atlas V and Delta IV, are built by United Launch Alliance, a joint venture between Boeing and Lockheed Martin, in Decatur, Ala, not far from Huntsville. The Delta IV uses the RS-68, and Stennis does assemble and test that engine. But Stennis doesn’t test any propulsion system for the Atlas V.

Should the Barack Obama administration opt for the Atlas V and Delta IV, the beneficiary will certainly be Decatur and the Huntsville area. The end of Ares I would not kill Constellation work at Michoud Assembly Facility - it will still have work on the Orion, the capsule that will bring the astronauts into space, as well as Ares V in the future. But the loss of Ares I would be a blow nonetheless, and put a brake on the broader vision.

NASA has made no secret of its desire to turn the Michoud Assembly Facility into a major fabrication hub for the Constellation Program. The agency wants to create a technology park on unused acreage surrounding Michoud, and is building an R&D center there. Some have envisioned a space corridor growing between Michoud and Stennis - and a group has formed in Louisiana and Mississippi to push that idea.

You can bet there are plenty of people working behind the scenes on this. It may not be as highly publicized as the battle to build Air Force tankers in Mobile, Ala., but make no mistakes, it's significant for the growth of the aerospace corridor region.

One other issue that will likely be a hot topic in 2009: the movement of the nation's defense companies towards getting a piece of the growing cybersecurity business.

Bloomberg last week wrote that aerospace giants Boeing and Lockheed Martin are throwing resources into cyberspace, a market that could reach $11 billion in four years. To capture some of this market, Boeing formed a new business unit in August, and Lockheed did the same thing in October. (Story)

Bloomberg notes that Raytheon, L-3 Communications and SAIC Inc., also have cybersecurity units. They will be competing for dollars with companies that for some time now have been involved in protecting computers systems: McAfee and Symantec.

The interest in cybersecurity goes well beyond these defense companies. The Air Force in 2008 made a big push to pull cybersecurity under its wing. There were plans to set up a separate Cyberspace Command, and a lot of economic development officials - including those on the Gulf Coast - pushed to land the command. The Air Force later dialed down its ambitious project. Still, it shows just how hot the topic has been.

We took advantage of what amounted to a slow news week to add some additional resources to our site. You can now get access to all the press releases from Airbus, Alliant Techsystems (ATK), Goodrich, Pratt & Whitney and Raytheon on our primary news page. They join BAE Systems, EADS North America, Lockheed Martin, Northrop Grumman and Rolls-Royce, which we’ve offered for some time now.

Those companies all have operations in the Gulf Coast Aerospace Corridor region, and our thought is to provide you with convenient access to all their releases, though we monitor them regularly to ensure you are aware of releases that have some relevance for the Gulf Coast.

Even in a slow week, there was some activity relevant to the corridor. The Air Force awarded a firm fixed-price contract to the McDonnell Douglas Corp. of St. Louis, Mo., for $13.8 million. It allows McDonnell, now a part of Boeing, to provide various test assets in support of The Small Diameter Bomb I program. Eglin Air Force Base in Florida s the contracting activity.

Two companies with operations on the Gulf Coast, Goodrich and Rolls-Royce, inked that agreement to form a joint venture company to develop and supply engine controls for Rolls-Royce aero engines. The venture, Rolls-Royce Goodrich Engine Control Systems Limited, operates as Aero Engine Controls. Rolls-Royce tests engines at Stennis Space Center in Mississippi and has a foundry in Pascagoula, Miss. Goodrich has a service center in Foley, Ala.