For a region that relies so much on defense activities, these are uncertain times. The Gulf Coast is packed with bases from every military branch, doing everything from training to surveying the world's oceans to developing weapons systems and more. Thousands of contractors big and small rely on the military as a customer, whether it's the local base that needs lawn service or a major defense program crucial to the nation's security.
Like it or not, cuts are coming, and nothing is immune.
In a speech last week, Defense Secretary Leon Panetta said that in this fiscal environment, every program, contract and facility will be scrutinized, with an eye towards ensuring the cuts won't reduce readiness or impact essential missions. He said it's important to maintain a robust industrial, science and technology base so the United States can maintain its edge, according to Defense News. (Story)
The Boston Globe recently wrote that defense lobbyists are packing a potential weapon in the battle to save their industry: a warning that more cuts to the Pentagon budget will cost jobs. They recognize that it's jobs, not defense or terrorism, that most concerns Americans.
"Make no mistake, combining the cuts that have already occurred and the potential for more cuts defense cuts … hundreds of thousands of American workers' jobs are at risk," said Marion C. Blakey, president of the Aerospace Industries Association. The group launched a public relations campaign last month to pursued Congress not to cut the Pentagon further. (Story)
There are many Pentagon programs of high interest in the Gulf Coast region. Building warships is a major part of the economy in South Mississippi, South Alabama and for now Southeast Louisiana. The DoD in its annual industrial report to Congress last month said that while U.S. shipbuilders produce the most capable warships in the world, the number of Navy ships being built each year is very low when compared to the number of ships being produced each year by the leading international shipyards. The low volume of production makes it extremely difficult for U.S. shipyards to match the improvements in technology and productivity seen in the international shipyards.
Further cuts here can only make that problem more pronounced, one can only assume.
The F-35 Joint Strike Fighter is also of a major program that's of high interest to this region. Eglin Air Force Base, Fla., is the initial training center for all three variants of the stealth aircraft, and that program will have a big impact on the Northwest Florida economy. But the program is over budget, and cuts could come, notably a possible decision to drop the Marine Corps variant.
During a House Armed Services Committee hearing last week, U.S. Rep. Jeff Miller, R-Fla., reminded Panetta that the Office of Management and Budget's 2013 guidelines was to identify programs that provided the best opportunity of economic growth, according to the Northwest Florida Daily News. The F-35 offered 127,000 direct and indirect jobs. And when the training school reaches full strength in 2014, the wing would employ 2,000 military personnel and 260 contractors, according to Miller. (Story)
While nothing is immune, there are some programs that seem destined to do well. Panetta and others have singled out cybersecurity as a major area of concern. The thinking is, it's likely more will be spent despite defense cuts. Keesler Air Force Base in Biloxi, Miss., is where the Air Force provides initial training to cyber warriors, and there's an effort to create a Navy cyber battle lab in Pensacola, Fla., which already does training in the field.
Robotic system also should continue to do well as the military and non-military users turn more and more to unmanned systems. The recent DoD industrial capabilities report notes that it's a field filled with smaller, innovative firms that are doing a lot of critical research and development work, which in itself helps satisfy a requirement that the country maintain its technological edge. Unmanned aerial systems are built in Moss Point, Miss., and Pensacola is home of the Institute for Human and Machine Cognition, a big researcher in the field.
We're already feeling the impact here. The Navy next year will eliminate one Seabee battalion in Gulfport, Miss., and the head of weapons development at Eglin has warned that there will be less money for developing new weapons.
There's little doubt every community in this region with military-related activities is paying close attention to the Pentagon’s belt-tightening. Some likely are more concerned more than others. The AIA is taking the right approach. Like it or not, it will all boil down to jobs.
As I mentioned above, Keesler Air Force Base, Miss., is already the home of the Air Force's electronics training, including the key growth field of cyber security. Now efforts are under way in Florida to establish a prototype cyber warfare battle lab at the Navy’s Corry Station in Pensacola.
The state of Florida approved eight grants totaling $1.03 billion to be used by a variety of groups in Northwest Florida to protect and improve military assets. Two of those grants totaling $300,000 are going to the Pensacola Bay Area Chamber of Commerce to enhance Corry's Center for Information Dominance and help the chamber's efforts to retain and create jobs. One is a defense reinvestment grant of $100,000, and the other is a defense infrastructure grant of $200,000.
Another group, TEAM Santa Rosa, will get two grants totaling $257,726, one to be used for land acquisition near Naval Air Station Whiting Field. A third group, the Economic Development Council of Okaloosa County, is getting two grants totaling $287,500 for projects related to Eglin Air Force Base, Hurlburt Field and Duke Fields, and the Bay County Board of County Commissioners and Bay Defense Alliance will get $93,519 and $87,500, respectively, for projects associated with the Naval Support Activity and Tyndall Air Force Base, Panama City.
BAE Systems was selected by Lockheed Martin to supply a Night Vision Goggle Helmet Mounted Display (NVG HMD) system for the F-35 during the next phase of its development.
The NVG HMD will incorporate the latest Q-SIGHT waveguide display and feature detachable Night Vision Goggles for night operations. It will also incorporate an optical Head Tracking System for precise weapons delivery and carrier and land-based operations.
BAE Systems will begin delivery of test assets in 2012 to support the F-35 development and integration laboratories, flight simulators, and flight-test platforms. Eglin Air Force Base, Fla., is home of the Joint Strike Fighter training center. BAE Systems has operations in Fort Walton Beach, Fla., and Gautier, Miss.
Rolls-Royce and Pratt & Whitney announce an agreement to form a new partnership to
power future mid-size aircraft. The two companies will establish a joint venture company, in which each will hold an equal share, to develop new engines for the next generation of aircraft that will replace the existing mid-size fleet.
The prediction is a need for nearly 45,000 engines over the next 20 years.
Both of those companies have a major presence in the Gulf Coast region. Rolls Royce tests jet engines at Stennis Space Center, Miss. Rolls-Royce Marine also has a foundry in Pascagoula that makes huge ship propellers. Pratt & Whitney assembles and tests rocket engines at Stennis Space Center. Pratt & Whitney is part of United Technologies, which is buying Goodrich Corp., including its Alabama Service Center is in Foley, Ala.
GE Aviation is building a composites parts center near Hattiesburg, Miss.
- Speaking of propulsion systems, Continental Motors in Mobile, Ala., was chosen during the week by Germany's Flight Design to provide engines for its new four-seat airplane.
Continental, located at Brookley Aeroplex, hopes to sell engines for 50 of the planes in 2013, when production begins. That's projected to grow to 100 engines in 2014 and 200 in 2015. Continental's six-cylinder IO-360-AF engine will burn traditional leaded aviation gas as well as unleaded fuel. Earlier this year, China's AVIC International Holding Corp. bought Continental from Teledyne Technologies.
Wind energy will overtake aerospace as the largest user of advanced composite materials, according to a research report. The overall market for advanced composites, based on carbon fibers, carbon nanotubes, and grapheme, will more than triple to $25.8 billion by 2020, according to a report by Lux Research. In 2020, wind energy will account for nearly 60 percent of the market for composites, compared to the current 35 percent.
This region is heavily involved in composites work. The Gulf Coast is home to the University of Southern Mississippi in Hattiesburg, which has an international reputation for its research into advanced materials. Southern Miss has been working with GE Aviation to manufacture composite jet engine parts at the still-to-be-built plant near Hattiesburg.
Louis Armstrong International Airport in New Orleans was approved to join a select group of U.S. airports that can fly to and from Cuba. The U.S. government has loosened restrictions, allowing New Orleans and other international airports in the United States to apply to host flights. New Orleans and seven other airports were approved.
Travel is restricted to those with close relatives in Cuba, or those involved in the medical or agricultural business sectors. Travel for educational or religious activities is also permitted. The longstanding U.S.-imposed trade embargo and travel restrictions were designed to pressure the communist nation to move toward democracy.
- Delta Air Lines is eliminating direct flights to Memphis from Gulfport-Biloxi International Airport in Mississippi, Mobile Regional Airport in Alabama and Northwest Florida Beaches International Airport near Panama City, beginning Jan. 4. But in Gulfport, US Airways is adding a flight to Charlotte, N.C.
- UPS will close a sorting operation at Brookley Aeroplex in Mobile, Ala., and move the hub to Pensacola Gulf Coast Regional Airport in Pensacola, Fla. Pensacola officials said the new sorting facility will create 30 jobs and open Oct. 31. UPS competitor FedEx still has a regional operation at Brookley.
The first Mobile User Objective System (MUOS) military communications satellite built by Lockheed Martin for the U.S. Navy has successfully completed a major end-to-end system test, validating satellite performance and functionality with user ground terminals.
Completion of this key milestone confirms the system meets requirements and allows the satellite to proceed to final factory test activities prior to launch. MUOS will augment and replace the Ultra High Frequency (UHF) Follow-On system (UFO) providing communications, including simultaneous voice, video and data, for mobile warfighters.
Work on the propulsion system for the MUOS, an A2100 satellite-based spacecraft, is done at Stennis Space Center, Miss.
Tidbits from other fields
Armored vehicles: Textron Marine & Land Systems will refurbish 392 Army M1117 Armored Security Vehicles under a $19.8 million award. The program, which could expand with the exercise of two option years, is designed to reverse the effects of combat stress on the ASVs. The program’s objective is to return these ASVs to fully mission-capable, combat-ready assets, regardless of their current condition. Work will be performed at Textron Marine & Land Systems in New Orleans.
Shipbuilding: The Signet Constellation and the Signet Stars & Stripes were christened at Gulfport, Miss.-based Trinity Offshore during the week. Signet will use the RAstar 3100-class tugs to execute a 20-year marine transportation contract from Angola LNG Supply Services, which supplies liquefied natural gas to Gulf LNG Energy's $1.1 billion liquefied natural gas terminal in Pascagoula, Miss. … Mobile, Ala.-based Signal International Inc. says it’s won a contract to repair and upgrade the Henry Goodrich, a semisubmersible oil rig owned by Transocean. Work will begin at Signal's east yard in Pascagoula, Miss., and will last a little more than two months. ... Austal USA of Mobile, Ala., celebrated the beginning of fabrication for its third Joint High Speed Vessel by presenting an aluminum plaque to U.S. Rep. Jo Bonner. The company now has three JHSVs under construction.