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November 21 Weekly Defense Industry Roundup

Posted by Fred Wellman

Women Holding Three of Top Spots in Defense Contracting

Marjorie Censer, Washington Post Capital Business. The male dominated world of defense manufacturing and contracting will look quite a bit different come January. That month Linda Hudson, CEO of BAE Systems, Inc., will be joined by two other female CEO’s in an industry that has long been the domain of mostly men and military veterans. Giant company Lockheed Martin will be led by Marilyn Hewson and General Dynamics will be taken over by Phebe Novakovic, adding a decidedly more equal opportunity flavor to the industry.

Insight: Lockheed’s F-35 Logistics System Revolutionary But Risky

Andrea Shalalai-Esa, Reuters. One of the unique aspects of the F-35 program is the Autonomous Logistics Information System, or ALIS, that feeds data on aircraft systems to a central location much like smart cars do for management of the entire fleet worldwide. When Navy ‘red team’ hackers penetrated the security of the system it left maker Lockheed scrambling and they insist they have the security gaps filled, but concerns continue as the military is driving on with competing the management of that program to other companies. With some 160 companies interested in competing for the program, many worry that cyber security issues will be all that more difficult with multiple smaller companies managing a system that promises to be a treasure trove to U.S. adversaries. It is an interesting issue of traditional hardware management combined with vulnerable high tech networked systems that make the usual security procedures that much harder today.

Federal Cuts Would Take Heavy Toll on Small Contractors

Corrine Reilly, Washington Post. With the so called “Fiscal Cliff” looming there has been a lot of ink spilled talking about the effects of sequestration and defense cuts on the defense industry. But one key aspect is that those cuts, while hard on the major manufacturers, will likely put hundreds of smaller companies completely out of business. It goes beyond just the cuts in contracts but the parallel trend of larger contractors pulling in-house tasks that had been outsourced or partnered out with smaller firms. While large companies like SAIC see this as prudent fiscal management it is a job and small business killing move for companies that may have only one or two major contracts to sustain their entire workforce. We expect a lot of smaller firms to simply disappear in the next two years as cuts settle in over the industry and new work is hard to find for specialized firms.

Pentagon Aims to Reduce Time, Costs for Weapons Design

Marcus Weisgerber, Defense News. The Department of Defense unveiled the Better Buying Power 2.0 effort last week as part of a continuing effort to streamline procurements and got more bang for the taxpayer’s dollars. As part of that effort the department would bring considerations of foreign sales into the development process from the very start to eliminate the need for costly redesigns and alternative systems later.  By building and planning for foreign sales the hope is that overall cost of the programs will go down saving the Pentagon money early on while helping builders get more for their investments by fostering increased international sales.  It’s an interesting aspect to the efforts to cut costs and shorten the often-lengthy efforts to get new weapons into military service.

The week ahead:

Tradeshows and Conferences:  No major shows scheduled that we are aware of this week.

Congress:   The full Congress is in recess for the Thanksgiving holiday this week.

Think tanks and other news events: 

Center for a New American Security: A Conversation with The Honorable Leon Panetta United States Secretary of Defense, Washington, DC (6:30 PM, Tues 20 Nov) Description: Rescheduled due to Hurricane Sandy, Secretary of Defense Leon Panetta will make remarks and take audience questions. Participants: The Honorable Leon Panetta, United States Secretary of Defense Location: Willard InterContinental Hotel’s Grand Ballroom, 1401 Pennsylvania Avenue NW, Washington, DC, 20004

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 Wednesday, November 21, 2012 10:46 am

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