Articles tagged with: Lockheed Martin

15
March
2017

Why so many big defense companies are bowing out of this $16.3B Air Force competition

Featuring: Richard L. Aboulafia

Why so many big defense companies are bowing out of this $16.3B Air Force competition

The Air Force’s future $16.3 billion program to replace its training aircraft has seen each of the so-called “Big Five” defense contractors express an interest in the competition.

It has also seen three of them drop out of the running.

Of those defense giants, only The Boeing Co. (NYSE: BA) and Lockheed Martin Corp. (NYSE: LMT) remain in the Air Force’s Trainer-X competition. General Dynamics Corp. (NYSE: GD) first bowed out in April 2015, with Raytheon Co. (NYSE: RTN) announcing its exit in January and Northrop Grumman Corp. (NYSE: NOC) abandoning the program the week after. Textron Airland also announced that it too would not enter the fray, Defense News reported Tuesday.

So, why do the majority of big name defense companies want out? Given that the Air Force has already awarded contracts for the fighter, tanker and bomber— with not many major programs out on the horizon — one would think they would be clamoring to build the 350 trainers.

Richard Aboulafia, vice president of analysis at the Fairfax-based Teal Group and an aviation consultant, argued that the dearth of major future Air Force programs may actually be what’s behind all these companies leaving the field.

The Air Force, he said, likely took note of this environment marked with "not many aircraft contests" where "everyone is eager to win something” in drafting the request for proposals, allowing it to “extract the best possible terms based on the acquisition side.”

“They basically put forth a contract where you’re not reimbursed for development,” Aboulafia said. “It’s a price-shootout with a little window dressing. You get an incentive for performance but in the broader context of the cost of the program it’s almost insignificant.”

Media Outlet: Washington Business Journal Tags Boeing | Korea Aerospace Industries | Lockheed Martin | South Korea | T-X

28
February
2017

The T-X battle comes down to Lockheed and Boeing

Featuring: Richard L. Aboulafia

The T-X battle comes down to Lockheed and Boeing

WASHINGTON — With U.S. President Donald Trump’s attention fixed on the F-35 and Air Force One, the Air Force’s biggest ongoing aircraft competition so far has gone untouched. But even without Trump’s intervention, the T-X race has evolved into something not unlike an episode of a reality TV show, featuring industry teams breaking up, companies unexpectedly dropping out and upstart entries coming in at the last minute.

The T-X program began with four main competitors: Lockheed Martin, Boeing, Northrop Grumman — which developed a new prototype — and a Raytheon-Leonardo team offering the latter firm’s M-346. Over the past couple of months, Northrop has pulled out of the competition, Raytheon dissolved its partnership with Leonardo — leaving the Italian firm to ally with its US wing, DRS Technologies — and several smaller companies, including Sierra Nevada and the nigh-unknown Stavatti Aerospace, decided to throw their designs into the ring.

Analysts tell Defense News that the drama overshadows the most important point: The competition has become a face-off between Boeing’s clean-sheet T-X design and the Lockheed Martin-Korean Aerospace Industries’ T-50A, the US derivative of a trainer flown by the South Korean, Iraqi, Philippine and Indonesian militaries.

And with the T-50 already in production and thousands of hours of flight time behind it, Boeing will face an uphill battle to keep Lockheed from cinching the contract.

"It looks like the emphasis is still very much on unit price and not much of anything else. It's [lowest price technically acceptable], basically, but with some window dressing,” said Richard Aboulafia, an analyst with the Teal Group. “And given the need to roll up the upfront development costs, Boeing is at a disadvantage. They'd have to be very aggressive price-wise. They obviously have a history of doing that with [the KC-46] tanker, but this clearly puts the advantage with Lockheed."

Media Outlet: Defense News Tags Boeing | Korea Aerospace Industries | Lockheed Martin | South Korea | T-X

18
December
2014

Pentagon Spreads Out F-35 Production, Repair Work to Get Orders

Featuring: Richard L. Aboulafia

Pentagon Spreads Out F-35 Production, Repair Work to Get Orders

"It's as much an industrial policy as a fighter," said Richard Aboulafia, vice president at Teal Group, an aerospace consultancy.

Media Outlet: The Wall Street Journal Tags F-35 | Joint Strike Fighter | Lockheed Martin

27
March
2014

Rivals line up for USAF trainer battle

Featuring: Richard L. Aboulafia

Rivals line up for USAF trainer battle

Richard Aboulafia, vice-president of analysis at Teal Group, calls the KAI/Lockheed T-50 Golden Eagle the “most capable” option – but also probably the most expensive to buy and operate. Lockheed declines to discuss prices, but Aboulafia estimates the T-50’s flyaway cost will be $26 million per aircraft. Currently built in South Korea and flown by that country’s air force and that of Indonesia, the T-50 was designed specifically to train fifth-generation fighter pilots, Lockheed says. “A student doesn’t need extensive training in the operating squadron to learn high-speed manoeuvring” after flying the type, it adds.

The T-50, which has been in service since the mid-2000s, can reach Mach 1.5 and pull 8g, Lockheed says. The type’s single General Electric F404 engine also has an afterburner. “If the [USAF] has the budget, and they want [pilots] to [transition] easily into an F-22 or F-35, the T-50 is the choice,” says Aboulafia. He estimates the least expensive option, at about $21 million each, is the BAE/Northrop Hawk ­advanced jet training system, which is derived from a aircraft model originally introduced in the 1970s. “If you want to put a pilot in the air and give him good cockpit training at the lowest cost, [the Hawk is] the way to do it,” says Aboulafia.

Media Outlet: Flight Global Tags Korea Aerospace Industries | Lockheed Martin | T-50 Golden Eagle

24
March
2014

Lockheed’s F-35 gets South Korea nod, but momentum slower than hoped

Featuring: Richard L. Aboulafia

Lockheed’s F-35 gets South Korea nod, but momentum slower than hoped

News that South Korea expects to spend 7.34 trillion won ($6.79 billion) for 40 F-35s is a plus for Lockheed, said Richard Aboulafia, aerospace analyst with the Virginia-based Teal Group, but the company needs more orders to help drive down the unit cost of the new warplanes. “The risk is that it stays too expensive to order in large quantities, and the lack of large quantities means that it stays too expensive,” he said.

Media Outlet: Reuters Tags F-35 | Lockheed Martin | South Korea

18
March
2014

Musk Jab at Rival Shows U.S. Space Reliance on Russia

Featuring: Marco A. Caceres

Musk Jab at Rival Shows U.S. Space Reliance on Russia

Two companies vying with SpaceX for a NASA commercial crew program – Boeing(BA:US) and Sparks, Nevada-based Sierra Nevada Corp. – - may also find themselves relying on Russian engines, because of their plans to use Atlas V rockets, said Marcia Smith, a former director of the space studies board at the National Research Council and now editor of Arlington, Virginia-based spacepolicyonline.com. Even so, mutual dependencies in space may make this one area that’s immune to disagreements on the ground. “The Russians are making money off these sales,” said Marco Caceres of the Fairfax, Virginia-based Teal Group. “It would make sense from a political standpoint to snub us, but from a financial standpoint, it’s not so good.”

Media Outlet: Bloomberg News, Business Week Tags Atlas V | Boeing | Elon Musk | Engines | Lockheed Martin | Russia | SpaceX | Ukraine | United Launch Alliance

16
March
2014

As Ukraine Crisis Unfolds, DoD’s Options Are Limited

Featuring: Marco A. Caceres

As Ukraine Crisis Unfolds, DoD’s Options Are Limited

If Russia did cut off supplies of the RD-180, it might be more symbolic than actually painful for the US, according to Marco Caceres, director of space studies with the Teal Group. “The Atlas V isn’t launching that much, so short-term impact would be minimal,” Caceres said. “The long-term impact would be that Atlas V would have to find another engine and that wouldn’t be easy.” The biggest impact might come not to US military launch, but to the corporate firms that provide it. Right now, military launch is provided either by ULA’s Atlas V or Delta IV. For years, the US has wanted to maintain two families of launch vehicles in case one failed. However, SpaceX looks poised for certification this year. The combination of having a third launch option, along with the lack of RD-180 parts, might lead to the end of the Atlas V. That may be all hypothetical, however, as Caceres doubts Russia would block sales of RD-180s, primarily because of the financial impact. “It’s not to the benefit of the Russians to do this. These are engines that bring in hard currency to Russia, the same way Russian oil and gas does,” he said. “Russia doesn’t really export much else of any consequence. ”

Media Outlet: Defense News Tags Atlas V | Engines | Lockheed Martin | Russia | SpaceX | Ukraine | United Launch Alliance

12
March
2014

Lockheed Martin buys cybersecurity firm Industrial Defender

Featuring: Philip Finnegan

Lockheed Martin buys cybersecurity firm Industrial Defender

Philip Finnegan, director of corporate analysis at Teal Group, said the acquisition fits into Lockheed’s strategy of taking services it had sold to government agencies and finding new areas in the private sector to apply them. “What Lockheed is doing is taking its core expertise and looking at what are the potential markets that are growing,” he said.

Media Outlet: The Washington Post Tags Acquisitions | CyberSecurity | Lockheed Martin

14
November
2013

Lockheed consolidates, moves some business areas to suburban Denver

Featuring: Marco A. Caceres

Lockheed consolidates, moves some business areas to suburban Denver

While these cuts to overhead costs are proactive, Marco Caceres, a senior space analyst for aerospace/defense adviser Teal Group, worries that this is not the end of Lockheed’s downsizing. “They are becoming very realistic about their future of space systems,” which is changing because of budget cutbacks, budget stagnation, increased competition from international players and competition from other U.S. commercial companies, Caceres said. “They are being smart. They are moving now as opposed to two to three years from now when it might be too late,” he said. “If they can’t see a significant way to lower their costs, they could be scooted out of the business in the future.”

Media Outlet: The Denver Post Tags Layoffs | Lockheed Martin

16
May
2008

Lockheed Wins GPS Satellite Contract

Featuring: Marco A. Caceres

Lockheed Wins GPS Satellite Contract

Marco Caceres, a senior space analyst at the Teal Group in Fairfax, said the Pentagon has been lucky that the current GPS systems have lasted so long, but they now need to be replaced. “You’re fighting two wars,” he said. “You have military troops all over that have to communicate, and they’re dependent on satellites.” The newest GPS program will be closely watched, as the Pentagon’s space programs have long suffered cost overruns, problematic technologies and delays. John Young, the Pentagon’s undersecretary for acquisition, technology and logistics, said he has directed the Air Force to tie the contractor’s payments to “specific program accomplishments,” not to adjust the scope of the program or change its technical specifications and to “consider solutions which lower cost or risk to deliver within or below budget.”

The oversight efforts, Young said, are part of “continuing a DoD push to award fees more carefully and on a more objective basis.” Of the Pentagon’s eight biggest satellite programs, all are over budget, from at least 20 percent over to more than double the original price, Caceres said. That includes a missile detection and warning satellite system made by Lockheed. “DoD is always looking for the latest technology for its satellites,” Caceres said. “The problem is that technology develops quickly but the development of the satellite itself takes a while. By the time it gets to its maturity, you realize there’s more advanced technology out there, so you add that at the last minute, and it leads to higher costs.”

Media Outlet: The Washington Post Tags GPS III | Lockheed Martin

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