Saturday, January 28, 2012

Week in review (1/22 to 1/28)

In the Gulf Coast region, anything that comes down the pike about defense issues gets attention. That was the case Thursday when Defense Secretary Leon Panetta gave an outline of cuts to come, and it will be the case next month when we get more details.

Panetta said the proposal will impact all 50 states and many congressional districts across America. And let's face it. We have a lot of potential targets in this region. There are 21 military installations between New Orleans and Panama City, Fla., along with military activities at non-DoD locations. We also have a lot of contractors, both traditional defense contractors and companies that provide services for the bases. We're talking a multibillion-dollar economic impact on this region.

And each of the states with a piece of this I-10 corridor also has military operations and defense contractors that account for billions in spending in other parts of the state. Alabama, Louisiana, Florida and Mississippi all have bases and contractors that dependon the military budget. The Pentagon wants $525 billion for the military in 2013, $6 billion less than the current budget, and wants Congress to approve a new round of base closures. (Post)

Several bases in this region have already announced personnel cuts, and Northwest Florida sees a realignment of the materiel command announced in November as a threat to Eglin Air Force Base's research and development. Work is underway to protect that activity, which is crucial for attracting and retaining high-tech operations.

One company in this region that will feel an impact of the cuts announced Thursday is Austal USA of Mobile, Ala. The 15 Littoral Combat Ships that were to be purchased from 2013 to 2017 will be trimmed to 13, and eight of nine planned Joint High Speed Vessels will be cut. The proposal also delays by a year the start of construction for the Ingalls-built LHA-8 large-deck amphibious vessel, but the proposal doesn’t slow the Navy plans to buy additional Arleigh Burke-class DDG-51 destroyers built by both General Dynamics and Ingalls. (Post)

Another casualty of the budget cut is the Air Force's Block 30 variant of the Northrop Grumman Global Hawk unmanned surveillance plane. The central fuselage work for the Global Hawk is done in Moss Point, Miss., at a 101,000 square-foot facility that opened in 2006.

The Air Force has decided to keep using the U-2 spy plane, which the Global Hawk was supposed to replace. Plans were to buy 31 of the Block 30 variant. Northrop has delivered 14 and has a contract for seven more. The remaining 10 will be canceled.

Northrop, not surprisingly, said it's disappointed with the decision, but will work with the Pentagon to assess alternatives to the program's termination. Northrop pointed out that just a few months ago the Pentagon published an acquisition decision memorandum that said continuation of the program is essential to national security. (Post)

But the Block 40 variant of the Global Hawk is alive and well. In fact, the proposed fiscal 2013 budget includes $1.2 billion for three additional Block 40 variants, according to Bloomberg. (Post) The Air Force already has 11 of the latest models delivered or on contract. In addition, the Pentagon wants to continue an $11 billion Navy Global Hawk program, which involves 68 Broad Area Maritime Surveillance Global Hawk drones.

NATO's Alliance Ground Surveillance capability is also moving forward. A 13-nation deal should be signed before the next NATO summit in Chicago in May. That pending acquisition is valued at about $1.3 billion for five Northrop Grumman RQ-4 Global Hawk Block 40 unmanned air vehicles, each equipped with a Northrop/Raytheon surveillance payload. (Post)

Also untouched was the Fire Scout program. The Navy plans to buy 168 of the unmanned helicopters, which are also made in part in Moss Point. And the models now in service have been busy. Two MQ-8B Fire Scouts are in a third operational deployment, this time aboard the USS Simpson. The Fire Scouts are providing the ship's sole aviation capability. (Post)

EADS named Tom Enders to take over as chief executive officer when Louis Gallois retires in May. Enders, nominated to a five-year term, was a strong advocate for Mobile, Ala., during the competition between EADS and Boeing to build Air Force tankers.

EADS planned to build a 1,500-worker assembly plant at Brookley Aeroplex to build tankers and freighters if it won the competition. Although EADS lost, it has continued to express interest in establishing an assembly facility in the United States because of a backlog of orders from airlines. (Post)

New programs
There was a grand opening during the week for the new 325th Air Control Squadron building at Tyndall Air Force Base, Fla. Brig. The 36,000 square-foot building will be used to train air battle managers, who provide critical information about enemy activities to both air and ground forces. It's the only schoolhouse that will teach air battle managers in the country. (Post)

Embry-Riddle Aeronautical University is opening a Crestview, Fla., campus to meet a growing need for students in the north end of Okaloosa County. The school decided to open the campus because of the increase in aviation related jobs around the Crestview Airport and aviation related contracts in the area. The new campus is on the second floor of a building at the corner of South Ferdon Boulevard and Southview Drive. (Post)

Raytheon Co., Missile Systems, Tucson, Ariz., was awarded a $17.4 million contract to provide test integration of software to enhance the system performance of the AIM 120D missile. AAC/EBAK, Eglin Air Force Base, Fla., is the contracting activity. … L-3 Communications Corp., Systems Field Support, Madison, Miss., was awarded a $69.2 million contract to provide for the support of the worldwide fleet of C12/RC12/UC35 aircraft. Work will be performed in Madison, Miss. The U.S. Army Contracting Command, Redstone Arsenal, Ala., is the contracting activity.