January 2 Weekly Defense Industry Roundup

Posted by Fred Wellman

F-35 Wins Japan Fighter Competition

Hiroshi Hiyama, Agence France-Presse. Japan announced on December 20th its decision to buy the F-35 Joint Strike Fighter as its next generation combat aircraft to replace its increasingly aging Vietnam era F-4 Phantoms. The deal is a huge boost to Lockheed Martin’s troubled program, worth an estimated $4.7 billion, with delivery of 42 aircraft to begin after Fiscal Year 2012. Lockheed beat off hard competition from Boeing’s F/A-18 and the Eurofighter Typhoon.  This deal should go a long way toward ensuring the future of the program in the U.S. as more international partners come to rely on the success of the effort. 

Updated: U.S., Saudis Ink Deal for Boeing F-15s

Philip Ewing, DOD Buzz. Thursday brought another big sale announcement for the U.S. defense industry when the U.S. and Saudi Arabia announced the huge sale of 84 brand new F-15 fighters, modernization of another 70 existing aircraft, along with munitions, parts, training, maintenance and logistical support to the Gulf nation. The deal is valued at well over $29.4 billion for defense giant Boeing, and is estimated to generate 50,000 jobs. The Obama administration has made no bones that the sale is in response to continued threats from Iran.

US Seals $3.48B Missiles, Technology Sale to UAE

Will Lester, Associated Press. The first foreign sale of the Terminal High Altitude Area Defense, or THAAD, missile system goes to the United Arab Emirates. Worth some $3.48 billion to manufacturer Lockheed Martin, that will include launchers, 96 missiles and supporting logistics.  This deal comes on top of previously announced upgrades to Saudi Arabia’s Patriot missile systems and the sale of another 209 Patriots to Kuwait. All of these efforts aim to reduce the growing threats from Iran, and the Gulf states stated concerns about their cross Persian Gulf neighbor. All of these sales point to estimates released a few weeks ago of billions in coming purchases by Middle Eastern states in U.S. manufactured technology that will help buoy the industry in spite of deep cuts in the U.S. defense outlay.

The 10 Worst Aerospace and Defense Stocks of 2011

Brendan Byrnes, Motley Fool. There aren’t a lot of surprises in the analysis here that it was a rough year for A&D stocks. But the article lays out that mid-size manufacturers that are heavy with defense market cap and low diversification have suffered, and stand to suffer, the most through this cost-cutting time. Topping the list this year was Digital Globe, AAR, National Presto, Alliant Techsystems, Textron, American Science and Engineering, Esterline Technologies, CAE, Embraer and Elbit Systems.

Stratfor Hackers Publish Email, Password Data

Jim Finkle, Reuters. Hacker group Anonymous has released hundreds of thousands of email addresses and passwords of the open source analysis firm Strategic Forecasting, Inc., known as Stratfor, that they hacked on Christmas Eve. The group has threatened to release thousands of stolen emails that they claim will embarrass the firm they accuse of being a “shadow CIA” and not just the newsletter production house it claims to be. This comes on top of 75,000 previously released credit card numbers of subscribers, many of which were used to make donations to various non-profits. Sadly, victims who spoke to the media found themselves hit a second time for even more money. It’s likely this will be a regular occurrence as even obscure organizations associated with national security or law enforcement find themselves targets for random hits as soft targets.

Veterans and Military Issues:

Wounded Marine Inspires AP Photographers Search

Anja Niedringhaus, Associated Press. Niedringhaus is a veteran AP combat photographer who found herself comforting a wounded Marine during an embed with a MEDEVAC unit in Afghanistan. She was so touched by the minutes holding his hand she set out to find him months later. Eventually she would fly to Richmond, Virginia’s Hunter Holmes Medical Center where he was going through months of rehab. It’s a touching story of the unusual bond that combat produces, even to those who are worlds apart. 20 years of covering conflicts, but that one Marine had her travel across the Atlantic to return a small piece of wheat she had plucked off his shirt.

Providing Comfort to Soldiers with Brain Injuries

Clarissa Ward, CBS News. The Army has been trying some unique approaches to combat the damage from Traumatic Brain Injuries suffered by so many soldiers. CBS has an interesting look at the work of Captain Amy Grey running a small clinic at FOB Fenty in Afghanistan, where soldiers with mild TBI are brought to rest and recuperate under her careful supervision. The process involves simply getting them off the line and letting them rest their brain while it heals for a few days. She’s having great results.

Obama Wooing Veterans in Campaign

Ken Thomas, Associated Press. President Obama is making a concerted effort to win over veteran voters in his campaign for re-election as part of a larger effort to win over voters that are traditionally outside the Democratic fold. Relying on some marked successes in his national security portfolio, including the killing of Osama Bin Laden and ending the Iraq war, the President hopes to be repaid with votes that keep him in office another four years. There is no denying that this administration has worked hard for veterans. From improvements at VA to the First Lady’s ‘Joining Forces’ campaign, it leaves Republicans with little room to tag Obama as week on defense, as past Democratic candidates have been painted. It will make for an interesting campaign.

Air Force Divorce Rate Highest in Military

David Larter and Michelle Tan, Air Force Times. A report released by DoD on December 13 reveals that the divorce rate in the military is at its highest level since 1999, with over 30,000 marriages ending in break ups in 2011. Enlisted Air Force members had a 64% jump over 2010 and lead DoD with the highest numbers. Sadly, when the Afghan war started the Air Force rate was 2.5 per 100 marriages, but by 2011 it reached 3.9 per 100. Clearly the deployments and separations of the last decade account for much of the rise. The services are pushing a host of efforts to reduce the number. But most in the military expect the figures to increase as marriages spent mostly apart over the last decade will now be settled together, and problems on the backburner will come forth once again.

The week ahead:

Themes: The presidential race will start seeing the first nomination fights in Iowa though defense and veterans issues haven’t dominated the campaign to any great extent so far.  Congress is still on recess and D.C. remains fairly quiet for another week. 

Tradeshows:  No major tradeshows or conferences that we are aware of this week.

Congress:  The full Congress is in recess this week, however, there will be pro forma sessions. There are no hearings scheduled.  

Think tanks and other news events: There is no significant defense or veterans’ focused news events scheduled this week in D.C. that we are aware of with the extended holiday break drawing to a close.

Moves in the Defense Media:  

Kristina Wong has joined the Washington Times as National Security Correspondent after 8 years with ABC in Washington. Follow her on Twitter @kristina_wong. Like many news organizations, McClatchy and NPR both formally closed their Baghdad News Bureaus last week with the end of U.S. operations in the country.


Fred Wellman with General Petraeus in Iraq

Fred Wellman, President ScoutComms, brings us his weekly review of defense industry news via The Scout Report. Fred served over twenty years as an Army officer in both aviation and public affairs. You can follow Fred on Twitter @ScoutComms.

This entry was posted on Monday, January 02, 2012 10:07 am

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