July 30 Defense Industry Weekly Roundup

Posted by Fred Wellman

DoD Sees Four Sequestration Scenarios

Marcus Weisgerber, Defense News. SecDef Panetta held a closed door meeting with a host of the leaders from the defense industry last week to discuss sequestration and the possible outcomes resulting from the budget agreement passed by Congress last year.  He outlined four different possible scenarios including it actually occurring; Congress finding a solution in the lame duck session; Congress finds some $1.2 trillion in cuts before the election; or the ‘mini-sequester’ where the can gets kicked down the road a couple of years but some $100M or more of cuts occur as planned. Industry and Panetta are definitely on the same sheet of music about the devastating effects of this budget maneuver, but so far Congress has shown little appetite for compromise.

DigitalGlobe Wins Commercial Imagery War; What Will NGA Do?

Colin Clark, AOL Defense. Last Monday the great battle of the commercial satellite imagery titans came to a sudden end as it was announced that DigitalGlobe and GeoEye would combine to form one company. It’s clear that DigitalGlobe was the winner in the deal as the new company would bear their name and the former leadership of GeoEye would only serve in an advisory role. Now the question becomes, “What’s next?” The combined single company still faces serious headwinds as the budget for commercial imagery is slashed by the U.S. government, and will have to find new markets and new uses for its products to weather the storm. For now the folks in Longmont, Colorado can breathe a sigh of relief and move out on combining the two companies.

Firms Split on Danger of Defense Cuts

Carlo Munoz, The Hill. Another story this week is confirming a trend we spotted in the last two weeks as more defense industry leaders are backing off the hardcore hype and strident ‘sky-is-falling’ rhetoric associated with the threat of sequestration. Carlo points out how behind closed doors, and increasingly in public, defense company leaders are taking a more nuanced approach as they worry that over the top predictions could dent their stock valuations as investors flee. Even more devastatingly it could send top quality employees for the doors fleeing an uncertain industry. While still predicting a host of pitfalls from the sequester axe, many are saying that they have weathered cuts before and will weather these as well. Few believe that sequester will truly happen but most do think more cuts upwards of $300 billion remain on the horizon even if the “meat axe” is withdrawn.

U.S. Army Official: JLTV Pick Set for Later in Summer

Paul McLeary, Defense News. After several stops and starts the Army is telling industry participants that they plan to announce the selection of three teams for 27-month Engineering and Manufacturing Development contracts for the Joint Light Tactical Vehicle (JLTV) program in late August. This award will narrow the field from six to three and is being watched by a lot of folks. The questions abound on this effort beyond who will get the contracts but to whether the program itself will survive in these tightening budget times. JLTV will replace most of the aging and relatively softly armored Humvee fleets for the Army and Marines.

Navy Charges Shipyard Worker with Arson in $400M Fire on USS Miami

David Hench, Portland Press Herald. There are times when news stories really seem like they were pulled from The Onion instead of the truth. This is one of those. It seems the devastating fire on the USS Miami in port during repairs on May 23rd was actually set by a shipyard worker in an attempt to get off work early after having a bad text message conversation with an ex-girlfriend. This genius actually did it twice, setting a small fire that did indeed get him home early the first time. But the second time it burned out of control and caused injuries to multiple firefighters, over $400 million in damage to a nuclear submarine, and possibly taken permanently out of service. Casey James Fury faces the possibility of life in prison…and this is really in there we swear…restitution for the damages. We have our doubts that Mr. Fury will be able to work hard enough to pay back the money.

Warrior Olympians: 16 Military Athletes Vie for Flory in London

Jon R. Anderson, Army Times. The military has been participating in the Olympics regularly for decades including a young George S. Patton who took fourth place in the first modern pentathlon in Stockholm in 1912. This year 16 athletes will compete in Greco-Roman wrestling, boxing, fencing, shooting and track and field events. The Army has the most competitors and ten of the contingent are participating for the second or more times and defending previous medals. Keep your eyes out for these multitalented military representatives.

The week ahead:

Tradeshows and Conferences:  No major tradeshows this week

Congress:   The full Congress is in session this week.


Senate Appropriations Committee – Markup (10:30 AM, Tues, 31 July) Defense Subcommittee markup of FY2013 for Defense Appropriations bill. Location: 192 Dirksen Senate Office Building

House of Representatives:

House Veterans’ Affairs Committee – Hearing (4:30 AM, Tues, 31 July) Health Subcommittee hearing on “Care for Veterans with Prosthetics: An Update.” Witnesses: TBD Location:  334 Cannon House Office Building

House Armed Services Committee – Hearing (10:00 AM, Weds, 1 August) Full committee hearing on “Sequestration Implementation Options and the Effects on National Defense: Administration Perspectives.” Witnesses:  Acting Office of Management and Budget Director Jeffrey Zients; and Deputy Defense Secretary Ashton Carter testify Location: 2118 Rayburn House Office Building

House Appropriations Committee – Hearing (10:00 AM, Weds, 1 August) Commerce, Justice, Science, and Related Agencies Subcommittee hearing on the final report of the William H. Webster Commission on the FBI, Counterterrorism Intelligence, and the Events at Fort Hood, Texas on November 5, 2009. Witnesses: Mark Giuliano, executive assistant director of the FBI’s National Security Branch, testifies Location: 2359 Rayburn House Office Building

House Armed Services Committee – Hearing (2:00 PM, Weds, 1 August) Readiness Subcommittee hearing on “United States force posture in the United States Pacific Command area of responsibility.” Witnesses: David Berteau, senior vice president and director of international security program at the Center for Strategic and International Studies (CSIS); Michael Green, senior adviser and Japan chair at CSIS; Deputy Assistant Defense Secretary for Plans Robert Scher; and Acting Deputy Assistant Defense Secretary for East Asia David Helvey testify Location:  2212 Rayburn House Office Building

House Armed Services Committee – Hearing (3:00 PM, Weds, 1 August) Strategic Forces Subcommittee hearing on “Nonproliferation and Disarmament: What’s the Connection and What Does that Mean for U.S. Security and Obama Administration Policy?” Witnesses: Former Assistant Secretary of State Stephen Rademaker; Kori Schake, research fellow at the Hoover Institution; and Thomas Graham, former special representative to the president on arms control, nonproliferation and disarmament in the Clinton administration, testify Location:  2118 Rayburn House Office Building

House Veterans’ Affairs Committee – Hearing (10:00 AM, Thurs, 2 August) Economic Opportunity Subcommittee and Oversight and Investigation Subcommittee joint hearing on “Odyssey of the CVE (Center for Veterans Enterprise).” Witnesses: TBD Location: 340 Cannon House Office Building

House Armed Services Committee – Hearing (3:00 PM, Thurs, 2 August) Oversight and Investigations Subcommittee hearing on “Afghan National Security Forces: Afghan Corruption and the Development of an Effective Fighting Force.” Witnesses:  Retired Army Lt. Gen. James Dubik, senior fellow at the Institute for the Study of War; Vanda Felbab-Brown, fellow in foreign policy studies at the Brookings Institution; and Kenneth Katzman, specialist in Middle Eastern affairs at the Congressional Research Service, testify Location: 2118 Rayburn House Office Building

 Think tanks and other news events: 

Government Executive: The Expanding Role of Open Source Information and Social Media for the Intelligence Community, Washington, DC (7:30 AM, Tues 31 July) Description: Open source information and social media have caused a huge growth in the amount of data available to the intelligence community. In a budget-constrained environment, this information explosion may become a major source for producing intelligence and protecting our nation. RSVP online. Participants: Dr. Patrick O’Neil, Director of Analytic Development, Open Source Center, David Abruzzino, Director, Open Source Intelligence Exchange, Fairmont State University, Craig Parisot, Chief Operating Officer, Invertix, Katherine McIntire Peters, Executive Editor, Nextgov Location: Ballroom, 13th Floor, National Press Club, 529 14th St. NW, Washington, DC 20045

American Security Project: Strengthening our National Security: Law of the Sea and American Competitiveness, Washington, DC (8:30 AM, Thu 2 Aug)  Description: The Law of the Sea treaty has feathers ruffled on both sides of the aisle. This discussion will break down the myths about how the LOTS treaty would affect American security and American economic prosperity. RSVP by emailing [email protected]. Participants: Thomas J. Donohue, President and CEO, U.S. Chamber of Commerce Location: 1100 New York Avenue NW, Suite 710W, Washington, DC 20005

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.

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This entry was posted on Monday, July 30, 2012 9:39 am

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