Wall Street Journal Says Trans Atlantic Defense Deal Falters

March 14, 2010 by admin · Comment
Filed under: KC-X, KC-X Tanker News, Northrop Grumman Corp., Syndicated Industry News 

The Wall Street Journal has weighed on the KC-X Tanker bid process, in an article entitled “Trans Atlantic Defense Deal Falters.” The article notes:

The decision by Northrop Grumman Corp. and its European partner this week to drop out of a $40 billion competition to build aerial-refueling tankers for the Air Force is the latest example of how trans-Atlantic defense ventures have faltered.

Many observers view the size of the tanker deal, and the prominent role played by Northrop partner European Aeronautic Defence & Space Co., as the most significant instance of how trans-Atlantic partnerships can get tripped up.

Noorthrop billboard in Alabama in 2008 advertised a future tanker plant, but the company quit the project.

“There’s no doubt that this outcome will reinforce the long-held understanding in Europe that the U.S. defense market is highly protected,” said Alex Nicholl, a specialist on European defense companies at the London-based International Institute for Strategic Studies.

“This is not the first time that the rules of a U.S. competition have been rewritten to suit the American competitor. No doubt it won’t be the last.”

Read the entire article at theJournal.

Tags: , , , , , , , , , , ,

Logistical Costs Burden Operations In Afghanistan

October 16, 2009 by Matthew Potter · 1 Comment
Filed under: Business Line, Congress, Countries, DLA, Department of Defense, Events, Federal Budget Process, Services, U.S. Air Force, U.S. Army, logistics 

Wars are expensive there is no doubt. As part of the planning for adding troops to Afghanistan the U.S. Department of Defense was asked why it costs about a $1 billion a year for a 1,000 soldiers to operate there. One of the main expenses it turns out is fuel. To get one gallon of JP8 to a soldier or airman who needs it costs about $400 if all related costs are taken into account. This figure alone is giving Congress second thoughts.

That is because the gas is shipped to Pakistan and then trucked to Afghanistan. To get it to the various outposts and bases sometimes requires aircraft and helicopters. For a helicopter to carry a gallon of gas probably takes a few gallons of gas and at a high maintenance rate. There is also the cost of all the personnel and contractors to handle the gas and supplies.

This should not really surprise anyone. In John Ellis’ book about World War II soldiers, On The Front Lines, he estimated it took about eleven personnel to support one front line soldier in the Pacific and almost ten in the European. That counted everyone who touched a ton of supplies as it moved from the U.S. to the actual soldier. That cost alone was fairly high. Take into account the gas used to move it and the maintenance of the ships, trucks and aircraft and the costs go up even more. Afghanistan is remote and costs even more.

Tags: , , , , , , , , , , , , , , ,

English Defense Industry Looking Bleak

July 23, 2009 by Matthew Potter · Comment
Filed under: BAE Systems, Business Line, Companies, Contract Awards, Countries, Department of Defense, England, Events, Military Aviation, Scotland, Services, VT Group, production program 

It is true that the United States defense budget does dominate the world’s spending on arms and equipment but the U.K. has always had large spending plans as well. Now that the U.K. government of Gordon Brown is facing massive deficits due to social spending and attempts at stimulating their own economy since the global recession began twelve months or so ago defence spending may get a little tight. There has already been discussion of canceling some large programs as well as cutting back on general spending. Like in the U.S. ending these kind of programs will lead to more job losses on top of those already gone in the civilian economy.

That is why stories like this one about the U.S. military buying BAE Systems artillery pieces that will be made in the U.K. will become more common. When you are relying on foriegn sales to keep up jobs for six months at a time it is not a good sign. There are bigger programs at risk for the U.K. such as the Eurofighter or A400M transports. The government is scrambling to maintain the new aircraft carrier contract as the jobs at Scottish shipyards are key to that part of the nation’s economy.

There is no doubt that the U.S. will also see a fall in defense spending as the pressures of debt, health care reform and other priorities will limit the money available from the Obama Administration’s budget.

Tags: , , , , , , , , , , , , , , , , , , ,

>