Week in review (4/18 to 4/25)

The star of the show during the week was no doubt the first landing of an F-35 at Eglin Air Force Base, Fla., but perhaps the most significant activity was movement in the competition to build the next generation of Air Force tankers. The push to split the tanker project between Boeing and the Northrop Grumman/EADS team appears to be moving into high gear.

During the week Senate Appropriations Committee Chairman Daniel Inouye, D-Hawaii, signaled he’s giving serious consideration to a proposal that would split the contract between Boeing and Northrop Grumman/EADS. And Rep. Artur Davis, D-Ala., also called for a split buy as the best way to move the stalled program. Others, including John Murtha of Pennsylvania, have previously voiced support for the split contract.

Then Boeing's top defense executive said the company would support splitting the contract if the Pentagon opts for that approach. That was a big deal since Boeing had been mum up to that point. Northrop Grumman and EADS had previously said they would go along with a split deal, though EADS has a caveat that it has to be able to build at least 12 tankers a year in Mobile, Ala., where it plans to build an assembly plant. That’s the only way the investment would make sense, said CEO Louis Gallois.

Defense Secretary Robert Gates has opposed the split deal as being too costly. He said recently that he’d through his body on the tracks before letting that happen. The Air Force considers replacing the tanker fleet a high priority.

After meeting with Gates during the week, Alabama Sens. Richard Shelby and Jeff Sessions said they would lift their hold on Ashton Carter, the nominee for Under Secretary of Defense and Acquisition. Carter was confirmed late in the week.

The two senators met with Gates to discuss the controversial contract. Shelby, who said he wants to contract to go to the best value rather than based on price alone, said Gates echoed the desire to deliver the best airplane to troops. That was apparently enough for both Shelby and Sessions.

The split contract is the only thing that makes sense at this point. It would help the job situation in Washington State and Kansas, and also bring new jobs that hadn’t existed before to Mobile and the broader Gulf Coast. EADS has also indicated it will build cargo planes in Mobile if it wins the contract, something that certainly couldn’t sit well with Boeing since the last thing it wants is to have its rival with an assembly plant in the United States. EADS has made it clear it plans to compete against Boeing in a number of military platforms. It’s Lakota helicopter, being built in Columbus, Miss., is already making a name for itself as deliveries continue on schedule.

- Speaking of EADS North America’s rotary effort, the company will hold a press conference May 4 during the Army Aviation Association of America Convention in Nashville, Tenn. The news conference is to announce the formation of a new rotary-wing industry team. The AAAA convention is at Gaylord Opryland Convention Center.

F-35 Joint Strike Fighter

A Joint Strike Fighter designated AA-1 landed at Eglin Air Force Base, Fla., for the first time during the week. The F-35 visit gave local mayors, county commissioners and school board members an opportunity to see the plane that has been the focal point of several lawsuits. The city of Valparaiso wants to stop the Air Force from establishing a JSF training center at the base, but the county is suing the city to get it to drop its suit.

- The Pentagon and Lockheed Martin suggested that cyber-attacks had not caused any serious security breaches in the Pentagon's F-35 Joint Strike Fighter program. Defense and corporate officials said attacks on the Pentagon as well as the F-35 program are constant. The comments came in response to a Wall Street Journal story reporting that cyber-attackers copied and siphoned off data related to design and electronics systems.


Space

Delays in establishing a clear space policy may have made NASA plans to narrow the post-shuttle "gap" in U.S. human access to space out of date even before implementation. A Constellation Program Acceleration Study released during the week finds the U.S. space agency $1.9 billion short of the funds it needs to meet an internal initial operational capability target date of September 2014. The Michoud Assembly Facility and National Center for Advanced Manufacturing, both in New Orleans, and Stennis Space Center, Miss., are all involved in the Constellation Program.

- Meanwhile, Lockheed Martin has begun its first friction stir weld process on an Orion crew module ground test article at Michoud. The ground test article will help validate the process and tools that will be used for all crew module welds. The weld system is part of the National Center for Advanced Manufacturing, managed by the University of New Orleans Foundation in partnership with NASA and Louisiana.

Good news and bad

It was bad news for some aerospace workers in Mobile, Ala., when Teledyne Continental Motors said during the week that it will cut the hours of its employees as the maker of piston airplane engines struggles with low demand. The company, which has 400 workers at Brookley Industrial Complex, is putting employees on four-day weeks. There’s also a chance it will close entirely for five weeks during the rest of the year.

But there was some good news as well on the job front - or at least the potential of good news. In Gulf Breeze, Fla., that town on a peninsula south of Pensacola is in the running against Georgia for an avionics company and 37 or more jobs. The company, which manufacturers and designs aviation-related equipment, has been promised state tax discounts, and Gulf Breeze would be both a manufacturing site and headquarters. TEAM Santa Rosa, the economic development group for the county, is being mum on details beyond that.

Airports/airfields

After 22 years as director of Pensacola Gulf Coast Regional Airport, Frank Miller is stepping down to become on May 18 the aviation director in San Antonio, Texas. Miller will oversee day-to-day operations at the San Antonio International Airport and its $500 million expansion project.

- Bird strikes at Louis Armstrong International Airport showed a six-fold increase between 2007 and 2008, but the number of serious strikes remained steady over the past 18 years, according to Federal Aviation Administration data released Friday. Officials said the jump indicates the airport is doing a better job reporting strikes.

- Next month the name Northwest Airlines will begin fading from view at Alabama’s Mobile Regional Airport as Pinnacle Airlines Corp. stops providing ground services for its three daily round trips to Memphis. Beginning May 12 passengers on Northwest will check in at the Delta Air Lines ticketing desk and board at one of Delta's two gates at the airport.

- Hurlburt Field, Fla., home of U.S. Air Force Special Operations, won the Commander In Chief's 2009 Installation Excellence Award. Hurlburt previously won the award, established in 25 years ago, in 2003. The award includes a $1 million prize to be used to improve quality of life on the base.


Fire Scout vs the pirates?
Rich Smith, in a Motley Fool column during the week, took on the issue of the pirates and discussed some of the options that have been discussed. His? He suggested Fire Scouts, saying the technology "seems admirably suited to expanding search capabilities at sea."

Smith points out that the Navy is testing the system, and "Seems to me, the African coast would be a dandy place to put the Fire Scout through its paces." He also said another UAV maker that could benefit AeroVironment and its Aqua Puma UAV, capable of landing on water. Northrop builds portions of the Fire Scouts in Moss Point, Miss., and AeroVironment has an operation in Navarre, Fla. (Column)

Ditched plane
A vintage dive bomber pulled from Lake Michigan will be restored at the National Museum of Naval Aviation in Pensacola, Fla., and go on display at the National World War II Museum in New Orleans. The Douglas SBD Dauntless was on a training mission in 1944 when it was ditched and found in the mid-1990s 20 miles from shore.


1Q reports
Goodrich reported an increase in first-quarter net income to $170 million, up from earnings of $158 million a year ago. Sales fell 2.8 percent to nearly $1.7 billion in the latest quarter. Goodrich operates a maintenance center in Foley, Ala. … Raytheon reported first quarter 2009 income from continuing operations of $457 million compared to $401 million in the first quarter 2008. Net sales for the first quarter 2009 were $5.9 billion, up 10 percent from $5.4 billion in the first quarter 2008. Raytheon has operations along the Gulf Coast. … Northrop Grumman reported that first quarter 2009 earnings from continuing operations increased 48 percent to $389 million compared with $263 million in the first quarter of 2008. First quarter 2008 earnings were reduced by a pre-tax charge of $326 million in the company's Shipbuilding sector. Northrop Grumman has multiple operations along the Gulf Coast. … Teledyne Technologies reported first quarter 2009 sales of $440.3 million, compared with sales of $451.8 million for the same period of 2008. Net income for the first quarter of 2009 was $20.8 million compared with net income of $27.9 million in the first quarter of 2008. Teledyne Continental in Mobile, Ala., is part of Teledyne Technologies. … Boeing reported first quarter net income of $0.6 billion. Revenue rose 3 percent to $16.5 billion on higher commercial airplane deliveries and higher volume in defense. Boeing has operations in New Orleans and Northwest Florida. … Lockheed Martin reported first quarter 2009 net earnings of $666 million compared to $730 million in 2008. Net sales for the first quarter of 2009 were $10.4 billion, compared to $10.0 billion in 2008. Lockheed Martin has multiple operations in the Gulf Coast region.


Contracts
Three contracts with ties to the Gulf Coast region were announced during the week. Two contracts for the Global Hawk were awarded to Northrop Grumman. In one, the Air Force awarded a $21.6 million contract to provide advance procurement of low rate initial production Lot nine selected long lead items required to meet the production schedule of two Global Hawk Block 30 and three Global Hawk Block 40 air vehicles as well as the selected long lead items for the ASIP sensors. In the other, the company was awarded an $8.7 million modification to a previously awarded contract to provide additional operations and maintenance support for the Global Hawk Maritime Demonstration. Global Hawks are made in part in Moss Point, Miss. … Lockheed Martin was awarded a $5.6 million contract for engineering and technical support in the integration of Organic Airborne Mine Countermeasures Systems into a MH-60S helicopter. Half of the work will be done in Panama City, Fla.


New on the site
Finally, we made a few adjustments to the Gulf Coast Aerospace Corridor news section, where we include a navigation bar that provides you with aerospace-related news releases and stories from a variety of sources. We dropped Prime Newswire since it duplicates the feed of Global Newswire, and also dropped NASA's Constellation Program news feeds since it's rarely updated and includes information found on the NASA feed. But we added a feed from Stennis Space Center, Miss., an Air Force news feed from Military.com and the weekly feeds from Wharton Aerospace & Defense Report. We welcome any feedback - no pun intended.

Week in review (4/12 to 4/18)

It's beginning to look like the fight over the F-35 Joint Strike Fighter Training Center at Eglin Air Force Base, Fla., will be with us for a while. Round 1 in the court battle has gone to the city of Valparaiso.

On Friday Valparaiso city officials had reason to celebrate after a federal court and circuit court in two separate rulings rejected attempts by the Air Force and Okaloosa County to torpedo the city's suits over the establishment of the multimillion-dollar JSF Training Center at Eglin.

The city of Valparaiso has two suits: One seeks to get more information from the Air Force on the noise of the F-35 Lightning II, and the other, filed after the Air Force gave the go-ahead to start construction of the training center, claims the Air Force did not consider alternative sites at Eglin for the jets. It wants all movement to establish the center to cease.

Okaloosa County, meanwhile, filed suit in hopes of getting Valparaiso to drop its legal actions. It's concerned that Valparaiso's actions threaten the entire development. It's not surprising that other political entities in Okaloosa County are concerned. Having the JSF training center means a lot of money for construction, and more defense dollars every year to operate the center. It also will bring 10,000 newcomers to the area. Having the newest jet in the nation's arsenal has clear economic benefits that other areas - especially during a recession - would love to have. Bay County has already put in a pitch, saying it would love to have the center at Tyndall Air Force Base in Panama City, Fla.

It wasn't all bad for those who want to keep the JSF Training Center. Although the judge in Valparaiso denied an injunction, he did rule that Valparaiso officials violated state public records law when it told a lawyer for the county that it would cost over $4,000 to provide records because sensitive information is included in the files. Valparaiso has 10 days to turn over documents.

This whole encroachment issue is nothing new for the military. Bases with flying missions that long ago were put in remote areas eventually have to face the encroachment of the civilian population outside the gates. That can wind up threatening the military's mission.

Biloxi, Miss., and Keesler Air Force Base had to deal with the issue with high-rise condos and casinos began popping up along the Mississippi coast; Pensacola, Fla., had to deal with it when homes got too close to the Sherman Field runway at Naval Air Station Pensacola. Hoping to avoid similar problems for Naval Air Station Whiting Field, the Navy has partnered with Santa Rosa County to buy nearly 600 acres near the base. In the last eight years the county has been using state money to buy up land to keep development away.

Encroachment brings up issues dear to the hearts of Americans. On the one side there's the very real pro-defense feeling in this region, where officials and the public go out of their way to make the military feel welcome. The military, afterall, has a huge economic impact on the region. But there's the other side that sympathizes with homeowners who feel run over by the needs of the federal government, and that's a chord that really resonates at a time when people are fed up with big government and tired of seeing tax dollars thrown around like candy.

How this will work out is still unclear. But from an economic development standpoint - looking purely at how this all impacts the growth of the Gulf Coast aerospace corridor - the controvery is certainly hurting and getting the training center is, no doubt, a real plumb for this region.

Meanwhile, the aircraft that's at the center of this whole controversy will be making its inaugural landing at Eglin on Tuesday. An F-35 flown by a pilot for Lockheed Martin will remain at the base four days. Base officials have invited local mayors, county commissioners and school board members to visit the base and see the plane that has been the focal point of the suits. No public events are scheduled. And that's ashame. This would be a great opportunity for the Air Force to score some points with the general public - particularly those from Valparaiso.


Tanker
During the week, Louis Gallois, the chief executive of EADS, said his company and partner Northrop Grumman would probably bid on a $35 billion tankers project even if the Pentagon decided to buy from both Northrop/EADS and Boeing. His condition: his company will have to build at least 12 planes a year to make the Gulf Coast plant viable.

Northrop previously said it would not oppose a split buy. Boeing is keeping mum, but it’s unlikely the company would welcome an opportunity for rival EADS/Airbus to set up an assembly plant in this country.

There’s no doubt this is a major deal for the Gulf Coast and Boeing. EADS NA plans to build a plant and assemble the planes at Brookley Industrial Complex in Mobile, Ala., if it wins the competition or a piece of it. Partner Northrop Grumman also plans to build a site near the EADS’ plant with a win. EADS has also expressed interest in building cargo planes in Mobile if everything goes well for the company.

And it's that element - the cargo planes - that Rep. John Murtha of Pennsylvania found such an exciting prospect during his visit to Mobile. Murtha and other lawmakers have pushed the idea of a split buy as the only politically sound way to move the project forward. A lot is at stake, and it’s easy to see why a split buy – costly or not – might be appealing. Not only would Washington State keep jobs, but it would provide new jobs in Alabama and the Gulf Coast region that previously did not exist. It's the flip side of offshoring - this time Europe offshoring to the United States. And it's been happening for a long time.

It's the cargo plane assembly that likely doesn's sit well with Boeing. The Chicago-based company, which has plants in Washington State, doesn's want EADS/Airbus to have more of a foothold in the United States than it already has. Assembling cargo planes in Mobile would be a huge challenge for Boeing, which already has been put on notice by Airbus that it plans to challenge the company for a variety of airframes.

Boeing is likely quite happy that Defense Secretary Robert Gates doesn't appear to be budging in his opposition to a split buy.

"I am laying my body down across the tracks," Gates told an audience of officers during the week at the Air War College at Maxwell Air Force Base near Montgomery, Ala. At a press conference a day earlier while heading to Fort Rucker, Ala., he said developing two tankers could cost $14 billion over five years, double the price of one. (STORY)

In another tanker item, early in the week the Mobile County Commission approved paying the public relations firm Birdwell Photography & Multimedia Inc., of Pensacola, Fla., $63,500 to train county workers to run the Web site that encourages the Air Force to select Mobile as the site to build tankers. BPM has previously been paid about $450,000 by the county to build and maintain the “Keep Our Tanker” Website, part of a broader campaign called “Come Back Home to Mobile.” Plans are to link the Keep Our Tanker site to schools.

- Speaking of EADS, the Huntsville, Ala.-based program manager for EADS North America’s Light Utility Helicopter, John Burke, will receive the 2009 Leadership Excellence Award from the National Defense Industrial Association’s Tennessee Valley Chapter. Through March 2009, the company has delivered 62 of the Columbus, Miss.-built UH-72As to active Army and National Guard units nationwide. The Army plans to buy 345 Lakotas through 2016, and the Navy wants five. EADS also has an engineering center and maintenance operation in Mobile, Ala.

- Another South Alabama aerospace operation, Goodrich’s Alabama Service Center in Foley, received during the week a Corporate Diamond Certificate of Excellence award from the Federal Aviation Administration Aviation Maintenance Technician program. The Corporate Diamond award is the highest award presented in the AMT program. The award has now been presented eight times to the Alabama center.

The center also received approval from Boeing to provide overheat service bulletin inspections and modifications for the Boeing Next-Generation 737 aircraft. The bulletin outlines instructions for inspection of the aircraft's CFM-56-7 engine thrust reverser inner walls as well as insulation blankets.


Airports/airfields

The Mississippi Gulf Coast Airline and Tourism Development Summit will be held at Biloxi’s Beau Rivage Resort and Casino with a dinner April 28, followed by a day of presentations and tour of the Coast. The first Airline Summit was held soon after Hurricane Katrina and the fourth summit this year will give airline executives a look at the progress on the Coast.

Further to the east, the Navy has decided to drop Wolf Field in Lillian, Ala., from consideration for expansion to meet the needs of a new Navy training aircraft. The Navy is replacing the T-34C trainer with the T-6B, which requires longer runways. Three other fields in Baldwin County are still being considered. The planes will be operating out of Naval Air Station Whiting Field in Milton, Fla. Outlying fields, or OLFs, are used to practice takeoffs and landings.


Space

The NASA Shared Services Center at Stennis Space Center, Miss., won the Best New Captive Services Delivery award from the Shared Services Outsourcing Network. The award recognizes the most successful shared services organization launched within the last three years. The center is a public-private partnership between NASA, CSC, Mississippi and Louisiana. CSC provides administrative, financial, human resources and procurement support services to about 20,000 NASA employees, applicants, contractors and university partners. The center combined the services that were once done at NASA headquarters and 10 NASA centers.

- Mississippi State University and a company in Winona, Miss., think they’ve come up with a way to ensure the purity of hydrogen fuel that’s important for engine testing at Stennis Space Center. The proposal was among 16 selected by NASA for negotiation of Phase 2 contract awards in the Small Business Technology Transfer program. Mississippi Ethanol LLC and MSU want to develop a technique and sensor to measure simultaneously concentrations of several contaminants in hydrogen gas storage tanks and supply lines. The purity of hydrogen fuel is important in NASA engine testing.

- Brice Harris, director of the Andrews Institute's space-tourism program, resigned during the week in the wake of accusations he used his state job to get the position – at double his state salary. Questions have been raised about Harris' role in developing the institute's contract for Project Odyssey, designed to get tourists ready to launch into orbit. There’s a possibility the state funding for the project is now in jeopardy.

Week in review (4/5 to 4/11)

If you had any doubts about the growing role of unmanned systems, consider this: the Marine brigadier general responsible for capabilities development said during the week that the Marine Corps wants an unmanned cargo helicopter, possibly within a year, to resupply troops at isolated bases in Afghanistan.

Brig. Gen. Andrew O’Donnell, capabilities development director for Marine Corps Combat Development Command, envisions a UAV that could carry up to 1,000 pounds of food, water, ammunition and other supplies.

He said there are plenty of dangers on Afghan roads, and cargo robots would take a lot of Marines off the roads. O'Donnell told Marine Corps Times that several companies and the Army had expressed interest in the cargo helicopter. Marine Corps officials hope they'll be able to field such a UAV in Afghanistan within the next two or three years, although he said it might be possible to have one a year from now. (Story)

The Navy and the Army already have one large unmanned helicopter system, the Northrop Grumman Fire Scout. The Navy version will be ready for an initial deployment test later this year, paving the way to full-rate production, possibly before 2010. Two Navy Fire Scouts will deploy last this year from the deck of the guided missile frigate USS McInerney. (Story)

The McInerney is homeported at Mayport Naval Station in Jacksonville, Fla., and the newspaper there had a story during this past week about the Mayport-based detachment involved in working with the Fire Scouts as well as the Broad Area Maritime Surveillance program, which will use Global Hawks. In addition to highlighting those two programs, it provides a good overview about the Navy’s interest in unmanned systems. (Story)

The Fire Scouts and Global Hawks are built in part at the Unmanned Systems Center in Moss Point, Miss. Both aircraft provide intelligence, surveillance and reconnaissance, or ISR, a field Defense Secretary Robert Gates emphasized in the budget he proposed April 6.


Tanker

The Pentagon plans to reopen the competition this summer to replace the Air Force’s aging fleet of KC-135 aerial tankers. That’s what Gates announced during the week when he released his proposed defense budget. Gates still wants to go with one supplier - either Boeing or the Northrop Grumman/EADS North America team.

But Rep. John Murtha of Pennsylvania is spearheading an effort to get the Pentagon to buy from both companies. During the week, Jeff Immelt, chairman and chief executive officer of General Electric, expressed support for the split buy. He told The Enquirer newspaper in Cincinnati that Murtha’s compromise may be the best way to get the much-delayed program on track. GE makes the engine selected to power the Northrop/EADS KC-45 tanker.

But Immelt, a member of the president’s economic recovery advisory board, said buying from both companies could provide an economic stimulus joint. No doubt it would benefit several states. Northrop/EADS plans to assemble its tanker at a $600 million, 1,500-worker plant in Mobile, Ala. And getting a piece of the tanker project - as Murtha pointed out after his visit to Mobile, would open up the possibility of EADS company Airbus building A330 cargo planes at the site.

In another tanker-related matter, Mobile County Commissioner Stephen Nodine wants to restart the “Keep Our Tanker” web site, now that it appears the competition will begin again. Nodine hopes to use $62,000 in education funds to upgrade the site with a link schools. He wants it to promote technical training and bring awareness to local jobs in aerospace and shipbuilding, according to a report during the week by Mobile television station WALA.

Lest anyone forget, Boeing does have some interests in the Gulf Coast region. It has operations in New Orleans and in Northwest Florida, and suppliers as well. One of those suppliers, Fort Walton Machining Inc., was among nine companies named by Boeing as 2008 Suppliers of the Year. It was chosen in the diversity/veteran owned small business category.

F-35

Gates’ proposed fiscal 2010 budget also calls for putting more money into the F-35 Joint Strike Fighter program, as well as ending purchases of F-22 Raptors. The F-35 is of course of high interest to the Gulf Coast because Eglin Air Force Base, Fla., is the designated home of the Joint Strike Fighter Training Center.

Lockheed Martin during the week was awarded a $41.2 million modification to a previously awarded advance acquisition contract for long lead materials and effort associated with the F-35 Low Rate Initial Production Lot IV procurement of three additional Navy carrier variants and one United Kingdom short take off vertical landing variant. There are three varants of the fighter.

Okaloosa County during the week filed suit in circuit court against the city of Valparaiso, seeking to torpedo that city’s suit against the Air Force over the JSF Training Center. Valparaiso is suing the Air Force because of concerns over the noise of the F-35. Okaloosa County, and others, are afraid Valparaiso’s suit is jeopardizing the center, which will have a $350 million impact through construction alone.

Speaking of Eglin, civic leaders from 20 states got an in-depth view of Eglin and Hurlburt Field's national security programs during the National Security Forum Alumni Tour held earlier this month. More than 50 community leaders looked at the McKinley Climatic Lab, the Air Force Research Lab's Taconi Room and Air Force Special Operations Command's Special Tactics Training Squadron at Hurlburt.

Competitive disadvantages
Long-time aerospace giant Washington State is falling behind other aerospace manufacturing centers in competitiveness. That’s according to a Deloitte Consulting study released to Washington Gov. Chris Gregoire and several members of the legislature.

Washington’s disadvantages outweigh its advantages in attracting and retaining companies compared to South Carolina, North Carolina, Texas and Kansas, which the study considers Washington’s competition.

On the plus side the state, compared to the rest of the group, has a large skilled labor workforce, the most engineers, the strongest research university, the highest quality of life, and relatively cheap property costs. On the negative side are relatively high wages, sales taxes, and unemployment and workers' compensation costs. Recent labor strikes is also chalked up as a disadvantage. (Story)

Washington’s governor wants a new task force to keep Washington in the hunt for future Boeing jobs, but she isn't yet calling for additional tax breaks that industry consultants say are key to more aerospace work. If approved, the Council on Aerospace would bring together leaders from state government, the aerospace industry, organized labor and higher education.

The council would be charged with coordinating job training, research and academic programs that aerospace leaders want, and regularly advising the legislature and governor on ways to keep Washington competitive in the aerospace sector.

Although Boeing moved headquarters to Chicago, Washington is the location of its major assembly plants at Everett and Renton, with other plants and offices scattered throughout the Puget Sound area. (Story)

Airports

International air service will return to Louis Armstrong International Airport in July. AeroMexico will begin offering nonstop flights to Mexico City from New Orleans July 6. The flights will operate six times a week. AeroMexico will be the first foreign line to operate out of New Orleans since Hurricane Katrina.

New Orleans and Louisiana in general have stable aviation business, aviation consultant Mike Boyd said during the Louisiana Airport Managers & Associates conference. Part of the reason is a higher demand in Louisiana for air service.

Aviation center

A foundation that wants to build a flight academy at the National Museum of Naval Aviation has raised $17.5 million for the four-story building. Now it’s trying to raise the $8.8 million for equipment.

The National Flight Academy is designed as a five-day camp that teaches middle and high school students science and technology in a Navy-themed setting. Some of the most expensive equipment for the carrier-themed facility will be flight simulators. A group in South Mississippi is also raising funds to build a science center, called Infinity, near Stennis Space Center.


Contracts
In addition to the Lockheed contract noted above, there was at least one other contract awarded during the week with a Gulf Coast connection. BAE Systems was awarded a $22.4 million modification to a previously awarded contract to exercise an option for maintenance, logistics, and life cycle services in support of communication-electronic equipment/systems and subsystems for various Navy, Army, Air Force, Special Operations Forces and other federal agencies. Two percent of the work will be done in Fort Walton Beach, Fla.

Gulf Coast/defense budget

It’s too early to say how much of the budget proposed by Defense Secretary Robert Gates on Monday will come to fruition. But the fiscal 2010 funding does show a shift from the tools used for conventional warfare to those needed for asymmetric warfare.

For the Gulf Coast region the budget was a mixed bag. Gates affirmed a commitment to the Joint Strike Fighter, and wants to put more money into Special Operations as well as intelligence, surveillance and reconnaissance. But for shipbuilding there were some surprises. Gates wants additional Littoral Combat Ships, but also wants to send Northrop Grumman’s DDG-1000 project to Maine.

How much of an impact entrenched interests will have on the final budget is unclear. But as presented, decisions on several programs do point to a new mindset at the Pentagon over the threats the nation faces. And that could help the Gulf Coast region in the aerospace sector.

Notable is that Gates wants to spend more money on Special Operations and the aviation-related tools of their trade. Gates said he wants to grow Special Operations capabilities by increasing personnel by more than 2,800, about 5 percent, and buying more special forces-optimized lift, mobility, and refueling aircraft.

Special Operations makes up a sizeable portion of the military presence in the Gulf Coast. Hurlburt Field, Fla., is home to the Air Force Special Operations Command, and nearby Eglin Air Force Base is the designated home for the Army’s 7th Special Forces Group. In Mississippi, Stennis Space Center hosts Special Boat Team 22, which specializes in riverine missions and works closely with Navy SEALS.

Gates also wants to spend more money on intelligence, surveillance and reconnaissance (ISR), the type of work that’s more and more handled by unmanned aerial vehicles. Gates is proposing a 62 percent increase in capability over the current level, and wants to initiate more research and development on ISR enhancements and experimental platforms. It’s become so important, it will now be permanently funded in the base budget.

This emphasis on ISR will have an impact on the Gulf Coast. Moss Point, Miss., is home to the Northrop Grumman Unmanned Systems Center, which builds unmanned aerial vehicles – Global Hawks and Fire Scouts – that perform ISR duties. (Note: A story on the growing importance of ISR and some of the platforms used by the Navy, including Fire Scout and Global Hawk, appears in the current issue of Seapower) Navarre, Fla., is home to an AeroVironment UAV training and support center. At Stennis Space Center there are multiple companies that work in the field of geospatial technologies. And the activities related to both Special Operations and IRS on the Gulf Coast is also considerable. Pensacola, Fla., is home to the Navy’s Center for Information Dominance at Corry Station, and electronics are taught at Keesler Air Force Base in Biloxi, Miss.

F-35 and tanker
Gates said he’s committed to building a fifth generation tactical fighter capability that can be produced in quantity at sustainable costs. He wants to increase the budget for the F-35 Joint Strike Fighters from $6.8 billion to $11.2 billion. He recommends increasing the buy from the 14 bought in fiscal year 2009 to 30 in fiscal year 2010. Over the next five years he wants to buy 513 of the Lockheed Martin F-35s, and ultimately have a fleet of 2,443. Eglin Air Force Base is scheduled to become the home of the Joint Strike Fighter Training Center, which will train pilots from all the branches, and additional funding for the program ensures the economic boon Northwest Florida expects from the center.

Another project mentioned by Gates that will impact the Gulf Coast is the Air Force aerial refueling tanker. Several weeks ago there was some talk that the Obama administration might seek to delay the project, but that was put to rest Monday when Gates said he wants to maintain the KC-X aerial refueling tanker schedule and funding, with the intent to solicit bids this summer.

Boeing and the Northrop Grumman/EADS North America team have been competing for the $35 billion contract to build tankers, and it’s significant for the Gulf Coast because if Northrop/EADS win, the tankers will be assembled in Mobile, Ala. There’s also a good chance Mobile will be building cargo planes if it wins the tankers. The spinoff, through jobs and suppliers, will be felt in Mississippi and Northwest Florida.

But there’s still an effort underway, spearheaded by Rep. John Murtha of Pennsylvania, to have the Pentagon split the buy between Northrop and Boeing. The idea is that the one that winds up building the most cost-effective model will eventually get the majority of the contract to build planes.

Shipbuilding
Gates included in the budget request funds to complete the purchase of two Navy destroyers in fiscal year 2010. But it is contingent upon being able to work out contracts to allow the DDG-1000 Zumwalt-class destroyer to all be built by General Dynamics’ Bath Iron Works in Maine. Right now, one of those ships is supposed to be built by Northrop Grumman at its Pascagoula, Miss., shipyard. In return, Gates wants to restart the DDG-51 Aegis destroyer program at the Pascagoula yard.

Gates said the DDG-1000 program will end at three ships, and the DDG-51 would continue to be built in both yards. He said that if the effort to build the DDG-1000 at Bath fails, the department “will likely build only a single prototype DDG-1000 at Bath and then review our options for restarting production of the DDG-51."

He also threw out a warning of sorts.

“If the department is left to pursue this alternative, it would unfortunately reduce our overall procurement of ships and cut workload in both shipyards,” he said in his prepared remarks. Gates also wants to delay the Navy CG-X next generation cruiser program to revisit both the requirements and acquisition strategy.

The Pentagon also plans to delay amphibious ship and sea-basing programs such as the 11th Landing Platform Dock (LPD) ship and the Mobile Landing Platform (MLP) SHIP to fiscal year 2011 in order to assess costs and analyze the amount of these capabilities the nation needs.

Gates also plans to increase the purchase of Littoral Combat Ships, a key capability for presence, stability, and counterinsurgency operations in coastal regions, from two to three ships in fiscal year 2010 with the goal of eventually acquiring 55 of these ships. Austal USA is currently building a prototype of the ship.

While the jury is still out on what the final budget will be, at least the outlines presented by Gates Monday shows the Gulf Coast may be involved in fields that will continue to win Pentagon funding.

Week in review (3/29 to 4/4)

During this past week, the Joint Strike Fighter Training Center, the aerial refueling tanker and the Constellation Program all managed making headlines. All three issues are of critical importance to the Gulf Coast region.

In Northwest Florida, Valparaiso city leaders opted to make good on a vow to file suit in federal court seeking to block the F-35 Joint Strike Fighter Training Center from coming to Eglin Air Force Base, Fla.. It wants the wheels to immediately stop turning. The city believes the Air Force failed to considering other locations on Eglin that would have less noise impact on Valparaiso.

But those who are afraid Valparaiso is jeopardizing an economic development boon are lining up against the city. A lawyer filed suit in state court claiming Valparaiso violated state sunshine laws. And the Okaloosa County Commission voted to initiate the dispute resolution process, the first step for one government agency to sue another in Florida.

While all this was going on, the Bay County commission sent a letter to Air Force Secretary Michael Donley offering Tyndall Air Force Base near Panama City, Fla., as a good location for the training center if problems continue at Eglin. That base is losing two F-15s squadrons by the end of 2010.

Tanker

Keep your eye out this week for more details on the $534 billion defense budget. Over the past few weeks defense contractors have converged on Capitol Hill to put in their pitch for projects. The defense budget will have a significant impact on the Gulf Coast, home to numerous military bases and defense contractor operations.

One of those projects that will be high on the list of interest for the Gulf Coast is the Air Force’s attempt to replace its aging fleet of KC-135 tankers. Twice in the past attempts to award contracts were scuttled.

And because it’s become so political – and it’s likely the company that loses the next competition will protest – the movement to split the contract between Boeing and the Northrop Grumman/EADS North America team is gaining steam.

Rep. John Murtha, chairman of the House defense appropriations subcommittee, met with Defense Secretary Robert Gates last week in an effort to secure Pentagon backing for dividing the $35 billion contract. EADS North America plans to assemble the tankers in Mobile, Ala., if it wins the contract.

Some analysts are saying EADS would benefit more than Boeing from a split contract. If it built the factory in Mobile, it would also make up to 40 commercial freighter planes there each year, letting it compete more fiercely with Boeing in the United States.

That, of course, is something Boeing wouldn’t want to see.

Meanwhile, EADS North America launched an advertising campaign to underscore the company’s role in America’s economy. The campaign highlights the $11 billion spent in the U.S. by EADS and its business units in 2008, supporting more than 200,000 American jobs. The initial ad features members of the Mississippi-based American Eurocopter team that produces UH-72A Lakotas. EADS, which hopes to increase its presence on the Gulf Coast, already has an Airbus Engineering Center and an EADS CASA maintenance center in Mobile.

Space

There was a story in the Orlando Sentinel during the week that said the cost of the Constellation Program has gone up, and is likely to continue rising. The story says that may force some rethinking on America's lunar ambitions. Michoud Assembly Facility in New Orleans and Stennis Space Center in Mississippi are both involved in the Constellation program.

Airports/air bases

Louisiana leaders will decide this month whether to continue efforts to build a $4.4 billion airport near Donaldsonville, between Baton Rouge and New Orleans along Interstate 10. Critics claim the state has spent too much and has failed to attract private investors. Backers envision an airport with links to water, rail and highways built on a 25,000-acre site.

- In New Orleans, the aviation board has recruited Dulles Airport Taxi of Virginia to overhaul the taxicab system at Louis Armstrong International Airport, although no contract had been signed by the end of the week.

- Delta Air Lines will add two more flights to Mobile Regional Airport in Mobile, Ala., beginning June 5, bringing its total to nine on weekdays and returning mainline jet service to Mobile for the first time since November. Delta will substitute 50-seat regional jets for some of the 70-seat regional jets it is flying.

- The air show at Keesler Air Force Base in Biloxi, Miss., was expected to attract as many as 70,000 spectators for the first air show at Keesler since Hurricane Katrina. Thunder on the Bay includes a show by the Air Force Thunderbirds precision demonstration team.