October 9 Defense Industry Weekly Roundup

Posted by Fred Wellman

Homeland Security Learns to Love Small Spy Drones

Spencer Ackerman, Danger Room. It seems the Department of Homeland Security is starting to see the value of the growing small Unmanned Aerial Systems family of aircraft for domestic security and public safety missions. For many years DHS has been somewhat hesitant of the use of drones in domestic missions due to the way many in the public are worried about their use. This has changed as more small vehicles have developed with short duration loiter times, rapid deployment and low-cost to provide aerial coverage during fires, hostage situations or a host of situations where extra eyes are all that’s needed to clarify things and assist first-responders. In the coming months tests will be conducted at Ft. Sill, Oklahoma on the value of small drones in what DHS is calling the Robotic Aircraft for Public Safety program. This effort is welcome news to the manufacturers of the man small UAV models that have hoped to prove their value to a domestic public safety audience.

US Defense Biz Outlook Grim, Foreign Sales Won’t Save It: Deloitte

Sydney Freedberg, AOL Defense. Deloitte’s aerospace and defense practices released their mid-year overview of the defense industry this week and the outlook is pretty bleak in their eyes. The fact is that even if sequestration doesn’t kick in the industry is facing low growth, additional layoffs and won’t be saved by even the best foreign military sales. It’s really just a matter of numbers with so many companies and countries competing for a limited number of buyers in the world, there will be a host of losers. They cite a nominal .3% growth before inflation in the first six months of 2012 in the defense industry and will likely be a loss when numbers are adjusted. With sequestration you are looking at a 12% hit to industry that would translate to some 86,000 layoffs in broad numbers. That is not good news for anyone.

Defense Contractors Back Off Layoff Notice Plans

Marjorie Censer, Washington Post Capital Business. After new White House guidance last week most defense contractors have backed off threats to send out layoff notices to employees in compliance with the WARN act and the impending sequestration budget cuts. In a politically controversial memo the White House said that if any layoffs or plant closings were generated by sequestration they would consider those as “allowable costs” and would be covered by the contracting agency. Effectively they are saying if this thing goes down we’ll cover your costs on the shutdown. This set off recriminations from the GOP saying this is basically ignoring the law and using tax dollars to cover the tab when the cuts come. This issue is far from resolved.

BAE’s Biggest Shareholder Questions Logic of EADS Merger

Roland Jackson, Agence France Presse. Amidst reports of problems with the negotiations over the proposed BAE/EADS merger this week the largest single shareholder in BAE is expressing doubt in the logic of the merger at its core. Fund manager Invesco Perpetual owns a 13.3% stake in BAE and has concerns surrounding the large government stake in EADS from France and Germany that would continue in the new company. At the same time British government leaders have expressed reservations on the same topic with concerns that political leaders could unduly influence the company. BAE has until Wednesday to announce its plans with the merger according to British law.

Returning Vets Swell Ranks of Entrepreneurs

Michelle Melia, Associated Press. A growing number of veterans are leaving the military and starting their own businesses as training programs have sprung up to leverage the unique skills military service brings to business. Already one in ten businesses in America are veteran owned and a retired military member is 45% more likely than their civilian counterpart to start their own company. With ingrained qualities such as resourcefulness, high-risk tolerance and can-do mission focused attitudes military veterans are well suited for self-employment and programs such as the Entrepreneurship Bootcamp for Veterans with Disabilities at University of Connecticut and Institute for Veterans and Military Families at Syracuse University are giving many the skills they need to succeed. We are big believers in supporting veteran entrepreneurship as we are an entrepreneur ourselves. Since veterans tend to hire veterans, supporting veteran business is an exponential solution to veteran unemployment.

Veteran Unemployment Rate Dips, But Crisis Deepens for Ex-military Women

Bill Briggs, NBC. Unemployment for Iraq and Afghanistan veterans overall fell into single digits for the first time in years in September while the rate for women veterans actually rose higher. Post 9/11 veterans were reported as having a 9.7% unemployment rate last month while female veterans of this same cohort are reporting a surge to 19.9% rate, up some five percent over the previous month. It’s important to note how small sample sizes are a chronic problem or the BLS veterans numbers each month but these are still troubling numbers as many blame the view of male veterans as “warrior heroes” by the public while women are looked at as mere supporters. This myth undermines the desire of companies to hire according to some advocates

The week ahead:

Tradeshows and Conferences:

United States Geospatial Intelligence Foundation GEOINT 2012, Orlando, FL (Mon-Thurs, 8-11 Oct) This year’s GEOINT takes place at the Gaylord Palms in Orlando with the theme “Creating the Innovation Advantage” and comes at a time when the commercial geospatial market has seen the onslaught of reduced budgets like other aspects of the defense and space budgets. This symposium brings out the top leaders in the field so you should expect some news from this one. Speakers include confirmed keynotes from:

  1. GEN Keith B. Alexander, U.S. Army, Director, National Security Agency/Chief, Central Security Service (NSA/CSS) and Commander, United States Cyber Command (USCYBERCOM)
  2. The Honorable James R. Clapper Jr., Director of National Intelligence (DNI)
  3. LTG Michael T. Flynn, U.S. Army Director, Defense Intelligence Agency
  4. Ms. Letitia A. Long, Director, National Geospatial-Intelligence Agency
  5. Air Chief Marshal Sir Stuart Peach, Commander, Joint Forces Command, U.K. MoD
  6. Michael G. Vickers, Under Secretary of Defense for Intelligence

Next big event:  Association of the U.S. Army Annual Conference, Washington D.C., 22-24 October, Walter Washington Convention Center

Congress:   The full Congress is not session this week except for pro forma sessions. There are some hearings still scheduled:

House Oversight and Government Reform Committee – Hearing (12:00 PM, Wed, 10 Oct) Full committee hearing on “The Security Failures of Benghazi,” focusing on the security situation in Benghazi leading up to the September 11 attack that resulted in the assassination of U.S. Ambassador to Libya J. Christopher Stevens. Witnesses: Deputy Assistant Secretary of State for International Programs Charlene Lamb of the Bureau of Diplomatic Security; Eric Nordstrom, regional security officer at the State Department; and Lt. Col. Andrew Wood, Utah National Guard, U.S. Army, testify Location: 2154 Rayburn House Office Building

Think tanks and other news events: 

Center for National Policy: Death from Above: Drones and Targeted Killings Washington, DC (12:00PM, Tue 9 Oct) Description: Targeted killings, most of them via drones, have become the centerpiece of the Obama Administration’s counter-terrorism strategy.  In Pakistan, Libya, Somalia, Yemen, and elsewhere, drones have stood ready in the skies to strike at America’s enemies.  But is this strategy working? Is it productive? RSVP online. Participants: Peter Bergen, Director of National Security Studies Program, New America Foundation, Christopher Swift, Adjunct Professor of National Security Studies, Georgetown University Location: Center for National Policy, One Massachusetts Avenue, NW, Suite 333, Washington, DC 20001

Government Executive: Modernizing the Army, Washington, DC (7:30AM, Wed 10 Oct) Description: What will the Army of 2020 look like? Its size and its core capabilities are under intensive review now that the conflicts in Iraq and Afghanistan are nearly over. Army Under Secretary Joseph Westphal says the Army will protect or increase funding for special operations, intelligence, surveillance and reconnaissance programs, and space and cyberspace capabilities. RSVP online. Participants: Dr. Joseph Westphal, Under Secretary of the United States Army Location: National Press Club, 529 14th Street, NW, 13th Floor Ballroom, Washington, District of Columbia 20005

National Press Club: Luncheon with General Martin Dempsey, Washington, DC (12:00 PM, Wed 10 Oct) Description: Army Gen. Martin Dempsey, 18th chairman of the Joint Chiefs of Staff, will speak at a National Press Club luncheon on Wednesday, Oct. 10. In a “Discussion with the Chairman,” he will cover a large range of topics relevant to today’s military. The event is open to NPC members only. It will be webcast beginning at 12:20pm. More information. Participants: General Martin Dempsey, Chairman of the Joint Chiefs of Staff Location: National Press Club, 529 14th Street, NW, 13th Floor Ballroom, Washington, District of Columbia 20005

Center for a New American Security: Election 2012 – Informing the National Security Agenda Washington, DC (1:00PM, Wed 10 Oct) Description: The American Enterprise Institute, the Center for a New American Security and the New America Foundation are hosting a series of events this election season called Election 2012: Informing the National Security Agenda. This event will feature a debate between top-level surrogates of the Obama and Romney presidential campaigns. RSVP online.

Participants: Dov S. Zakheim, Special Advisor on Foreign Policy and National Security for the Romney campaign, Rich Verma, member of the National Security Advisory Committee for the Obama campaign Location: The Willard InterContinental Hotel, Grand Ballroom, 1401 Pennsylvania Avenue NW, Washington, DC 2000

The Cato Institute: The Economic Effects of Military Spending, Washington, DC (12:00 PM, Fri 12 Oct) Description: The Budget Control Act passed by Congress directs that on January 2, 2013, the Obama administration must cut the defense budget by at least $55 billion. The prospect of such reductions has led to assertions that they will damage the economy and increase unemployment. Others, however, claim that limiting Pentagon spending would make resources available for more productive uses in the private sector and lower the burden on the taxpayer. Could the impending, mandatory cuts actually benefit the economy? RSVP online. Participants: Benjamin Zycher, Senior Fellow, Pacific Research Institute, Stephen S. Fuller, Dwight Schar Faculty Chair and University Professor, Director, Center for Regional Analysis, George Mason University, Stephen Moore, Editorial Board Member, Senior Economics Writer, Wall Street Journal Location: The Cato Institute, 1000 Massachusetts Avenue, NW, Washington, DC 20001

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 Tuesday, October 09, 2012 9:19 am

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