KC-46 Losses Now Top $5.4 Billion as Boeing Takes a New $406 Million Charge

Jan. 26, 2022 | By John A. Tirpak

Boeing’s losses on the KC-46 tanker program now amount to over $5.4 billion, after the company booked a $406 million charge against the program in its fourth quarter 2021 report, released Jan. 26.

It is the first Boeing charge on the KC-46 since the fourth quarter of 2020 when Boeing booked a $1.32 billion loss on the program, which brought cumulative losses on the Pegasus up to $5.037 billion at that point.

Boeing CEO David L. Calhoun, in a conference call with financial reporters, described the charge as due to “evolving customer requirements” on the KC-46. The Air Force is requiring Boeing to improve the performance of the tanker’s Remote Viewing System, which can create a distorted view of the situation at the back of the tanker for the boom operator, whose station is right behind the cockpit.

In addition to the RVS situation, the charge was driven by “factory and supply chain disruptions, including the impact of COVID-19,” a Boeing spokeswoman said after the earnings call. “While we continue to work closely with the Air Force on RVS 2.0, the KC-46 is currently successfully flying refueling missions with operators, having delivered more than 60 million pounds of fuel to a wide array of aircraft.”

Under the KC-46 fixed-price development program, Boeing is obligated to cover costs exceeding $4.9 billion, so program overruns now well exceed the company’s receipts on development.

Although a preliminary design review was expected to clear the new and improved RVS 2.0 to go forward in the fall, the Air Force recently said the system has not yet resolved deficiencies with the panoramic viewing system and the PDR remains “open.”

Air Mobility Command issued an “interim capability release” in December 2021 for more aircraft to refuel behind the KC-46. The new tanker is now certified to refuel nearly 70 percent of planned receiver aircraft.

“Despite the charge, which we don’t feel great about, by any respect, the tanker today is an incredible asset for our customer,” Calhoun said. “Our job is to continue to deliver the tanker and to do it more expeditiously as we move forward. The good news is, our customer likes the performance of the airplane, and again, we intend to serve that need.”

A Good Start for the T-7A

Calhoun said the Air Force T-7A trainer production line, “based on significantly improved development processes and modeling capabilities, is off to a very good start,” and “the efficiency associated with that process is being realized.”

Brian West, Boeing’s executive vice president and chief financial officer, said the company views the defense market generally as “stable” with bipartisan support for an increased defense budget. Despite the fact that “governments around the world are focused on COVID-19, security spending … remains a priority, given global threats.”

Company fourth quarter revenue “was $5.9 billion, down 14 percent,” West reported, “and operating margin was negative 4.4 percent. These results were driven primarily by lower volume and less favorable performance across the portfolio,” including the KC-46 charge.

West also noted that Boeing got a $7 billion order in the last quarter of 2021 to modernize Saudi Arabia’s E-3 AWACS aircraft. Boeing Defense System’s backlog now stands at $60 billion.

Accompanying documents also noted that Boeing is in flight test, along with Australia, of the “Loyal Wingman” unmanned aircraft, and has delivered the first KC-46 to Japan.

The documents show Boeing delivered 13 KC-46s in 2021, versus 14 in 2020, and delivered 16 F-15s to all customers—including international—versus four the year before. The U.S. Air Force has accepted two F-15EX Eagle II fighters, which are in concurrent developmental and operational test. The service plans to acquire 144 of the jets.

‘Fix my computer’ Cry Echos on Social Media; Air Force CIO Responds

Jan. 26, 2022 | By Shaun Waterman

A cry of frustration in a social media post is striking a chord with users of Air Force IT systems, and the service’s chief information officer has joined the conversation, outlining steps she’s taking to rectify the problems it identified.

“You tell us to ‘Accelerate change or lose,’ then fix our computers,” demanded Michael Kanaan, the director of operations for the Air Force’s Artificial Intelligence Accelerator at MIT, in a widely shared LinkedIn post referencing the service leadership’s demand for digital transformation.

Although Kanaan is an Air Force employee, his “open letter” is addressed to the Department of Defense and addresses complaints that are widespread across the services, as evidenced by the comments on his post. “Before buying another plane, tank, or ship, fix our computers,” Kanaan continued. “Yesterday, I spent an hour waiting just to log-on. Fix our computers.”

A long litany of complaints followed, mostly centered on the sloth-like slowness of DOD IT. “I wrote an email the other day that took over an hour to send … I opened an Excel file today, my computer froze and needed to be restarted … I turned on my computer and it sat at 100 [percent] CPU usage.” Each barrage ending with the same invocation: “Fix our computers.”

“Want innovation?” Kanaan lambasted DOD leaders, “You lost literally HUNDREDS OF THOUSANDS of employee hours last year because computers don’t work. Fix our computers.”

“We’re the richest and most well funded military in the world,” he concluded, “I timed 1 hour and 20 minutes from logging in, to Outlook opening today. Fix our computers.”

Kanaan told Air Force Magazine in a brief message exchange that he was “happy [the post] made such a splash on an oft-overlooked (but crucially important) issue.” He did not respond to further messages with detailed questions.

Striking a Chord

Nonetheless, his frustration clearly struck a chord. More than 1,200 LinkedIn users, many of them senior Air Force technology staff, including the Chief Information Officer Lauren Barrett Knausenberger, chimed in or reacted to the post.

“Oh man,” wrote Knausenberger, “I echo your open plea to fund IT. It’s the foundation of our competitive advantage and also ensures every single person can maximize their time on mission.”

“We need to make big, bold capital investments in IT to drive the tech and process modernization we need to compete,” she told Air Force Magazine in a text message interview later. “The most successful corporations have figured out that IT is a huge contributor to the value chain and a key source of [competitive] advantage. We seem to still think it’s a cost center in the DOD, and that’s a huge mistake.”

She said a major command technology refresh and ongoing work to streamline the various security programs that run on Air Force endpoints would help address Kanaan’s complaints.

“We’ve updated the [hardware] standard and proven it works. There’s just not enough money to fix it all at once,” she told Air Force Magazine. “Everything is harder than it needs to be due to our legacy debt.”

She said she had tasked a team at Air Combat Command last year “to streamline our endpoint solution.” Currently the service uses both McAfee and Tanium software packages to scan and protect service-issued endpoints like laptops. But the computing power required by multiple programs often interferes with the user’s work, and damages the user experience, or UX. Knausenberger said the ACC team would “streamline [existing programs] into one endpoint solution that meets our security, operations, and UX needs.”

Many commentators on Kanaan’s post highlighted the barriers that IT problems created for recruitment and retention.

“It’s not just a retention issue, it’s a recruiting issue,” pointed out Jeremy Buyer, director of strategic communications for the USAF chief human resources officer. “USAF says we need top talent cyber warriors,” he continued, enumerating the many barriers to competing with the private sector for such individuals. “Let’s say we successfully do that, and let’s assume we can cut through the bureaucracy/policy and assign them meaningful work that keeps them engaged and allows them the autonomy to move fast. The hardware alone will cause them to leave.”

“What little leverage we might have over the Googles of the world—i.e. a noble mission set like ‘service to country’—we undoubtedly lose with our stone aged IT infrastructure,” Buyer concluded.

“We are losing Reservists in droves right now because of how difficult it has become simply to serve,” added Cynthia Brothers, a Reservist who was an assistant professor at the Air Force Academy and the director of strategic engagement for CyberWorx.

Others pointed out that governance and security issues could be just as frustrating as performance ones, describing fights to get modern IT capabilities like open source coding languages and software repositories available to Airmen and women. “I wasted the last nine months fighting the local comm squadron,” said Matt McCormack, an instructor at the U.S. Air Force Test Pilot School at Edwards Air Force Base. McCormack said he was trying to get local “instances” (installations) that would allow his pupils to use open source tools like Anaconda and GitHub for work with DOD’s software factory PlatformOne.

Several contributors described using workarounds involving personal devices accessing Air Force networks remotely through services like Desktop Anywhere or Outlook Web Access (OWA), while inside USAF offices. “It has been the absolute most frustrating thing in the world since the [Department of the Air Force] … made OWA crazy locked down,” said Oliver Parsons, chief of esports and virtual fitness for the Department of the Air Force. He added that he didn’t even bother getting issued a government laptop. “I’d rather deal with the annoying backdoors to get work done through my personal gaming laptop than even deal with the hassle of getting issued a government computer,” he said.

Knausenberger said that many of the laptops still being used by Air Force personnel had been bought four years ago under a “lowest price technically acceptable” acquisition process when the DOD was rushing to deploy new endpoints so it could meet deadlines to transition to Windows 10.

Those laptops used “spinning” hard drives, which had been rendered obsolete by new, faster, and more reliable solid state drive. But now, with the updated standard introduced two years ago, “Anyone buying a standard laptop today from the catalog will be very happy with their performance,” she said.

Some commentators highlighted the responsibility of users. “Some of the blame falls on the Airmen, Soldiers, Civilians, etc. who don’t take any initiative,” to get their equipment fixed or maximize its utility, argued Packy Hill, a Reservist who founded and runs Bedrock, the innovation accelerator at Dover Air Force Base, Del.

Benjamin Marshall, a special assistant supporting the Commander’s Action Group at Air Force Materiel Command, recounted how, when his laptop became unusably slow, “I complained and received a new [one]. I can’t tell you how much faster this new one is from my previous fast computer. Even in a year jump, the computers are next level now.”

Knausenberger called this “a cultural issue … We need people to call the help desk to complain and order a new laptop when it breaks.” She said a service culture of stoically persevering in the face of impossible odds didn’t do anyone any favors. “If we suffer in silence it doesn’t get fixed,” she said.

Editor’s Note: This story was updated at 7:49 a.m. on Jan. 27 to correct the spelling of Michael Kanaan’s name.

Atlantic Council Experts: Belarus Exercise is Rehearsal for Ukraine Invasion in a Month

Jan. 25, 2022 | By John A. Tirpak and Abraham Mahshie

Russia isn’t quite ready to invade Ukraine, but it could be at the conclusion of its current exercise with Belarus, panelists and experts said in an event streamed by the Atlantic Council on Jan. 25. They said the Belarus exercise, “Allied Resolve 2022,” is probably a rehearsal of moves against Ukraine and that its planned wrap-up, around Feb. 20, could be the invasion date, as Russia will have continued to mass troops on the Ukraine border in the interim.

Separately, a senior Air Force official told Air Force Magazine that Russia is likely to invade Ukraine in the coming weeks. The official also said Putin is not interested in reinforcing the Donbas region, where Russian-backed separatists have held a tiny corner of southeast Ukraine since 2014.

“It will be further west,” the official said, noting that the Belarus exercises place Russian forces less than 100 miles from Kiev, the capital of Ukraine.

In recent months, U.S. Air Forces in Europe-Air Forces Africa chief Gen. Jeffrey L. Harrigian has spoken regularly by telephone with his Ukrainian counterpart to discuss strategy.

Following the visit of Ukraine’s defense minister to Washington, and his appeal for air defense systems, the Pentagon dispatched air defense experts to Ukraine in December to assess its air defense needs.

Staffers on the Senate Armed Services Committee told Air Force Magazine that Stinger shoulder-fired anti-aircraft missiles could be effective in slowing the advance of Russian attack and transport helicopters but would be less useful against Russian fighter and attack jets, but additional lethal air defense aid has not arrived.

The Air Force official did, however, highlight Ukraine’s air-to-surface capabilities.

“They’re very good at concealing—they hide stuff,” the official said. “They’re good at protecting equipment and people.”

U.S.-made, shoulder-fired Javelin anti-tank missiles have been provided to Ukraine in the last few years and continue to be supplied.

Russia is “not yet ready” for a Ukraine invasion, former Ukraininan defense minister Andriy Zagorodnyuk said in the Atlantic Council panel. The level of Russian troops encircling the eastern part of the nation, which he said number about 127,000 troops, is a level “not much different” from where things stood last April. However, more are moving in every day, he added.

“In the next few weeks, … they may be in a position to at least start” a Ukraine invasion, Zagorodnyuk said. The end of the Russia/Belarus exercise on Feb. 20 is “when they may be ready.”

He also said Russia may not have a firm gameplan of how to conduct the invasion, modifying its aims as the situation develops—an “emergent strategy.” Putin wants to preserve “a variety of options,” Zagorodnyuk asserted.

An invasion at the current force level “could be successful if it’s unexpected. But of course, it’s not unexpected,” he added.

Likely Scenarios

The most likely scenario is a “serious acceleration of their activities in the East, … a very serious provocation,” he said. Second most likely is that “they could initiate a scenario in the Black Sea,” threatening an amphibious attack, although Air Force Lt. Col. Tyson K. Wetzel, senior USAF fellow at the Atlantic Council’s Scowcroft Center for Strategy and Security, said an amphibious operation would likely be meant as a feint or to draw Ukrainian forces away from Kiev. Russia has only six landing ships in the Black Sea able to land 2,200 personnel or 60 main battle tanks, insufficient for a Ukraine invasion, Wetzel said.

Wetzel was speaking on behalf of his own scholarship with the Atlantic Council and not on behalf of the Air Force.

A naval action may be intended to block trading routes, Zagorodnyuk said.

The third-most likely scenario, he continued, is that troops participating in the Belarus exercise move on Kiev, as they will be close by.

In any scenario, “all kinds of hybrid [warfare] will be engaged,” Zogordnyuk said. Russia would attack Ukraine’s government and try to “turn off the heat” and communications to sow panic and disorganize a defense, he said. The other panelists agreed that this is highly likely.

Wetzel said a hybrid war is “what Russia does. … We’ve already seen cyberattacks and information operations. Things below the threshold of a response are already happening.” This was also a hallmark of the 2014 invasion of eastern Ukraine, he noted.

“Where is the main effort going to be?” asked Wetzel, who said the encirclement of the Eastern part of the country “does not support a major thrust … to Kiev to take the capital. I do not believe they have the forces ready to do that right now.”

But Putin’s objectives, to Wetzel’s thinking, are to “take territory, to make NATO look feckless, and I think they can do that with the forces they have … in place now.”

There is likely to be a push toward Kiev later, launched on the heels of a cyberattack, Wetzel said, creating a crisis that “threatens the [Kiev] regime’s legitimacy.” There will likely be a corresponding action in the Donbas, but the Black Sea action would most likely be a distraction, intended to draw Ukrainian forces “away from the main effort, which I believe will be further north or east.”

“I do not think they have the forces in place to take and hold the country,” he asserted. “I think they can take and hold small areas [pending] a political objective.”

Michael Kofman, the Center for Naval Analyses’ Russian studies director, said he sees a likely operation across Ukraine’s eastern region “combined with an encirclement of Kiev, … which I think they can do pretty quickly,” with forces already arrayed, “and, potentially, a march across the southwestern coast toward Odessa.” Russian forces would get into position to move after a governmental collapse, he said, and he disagrees that much more force would be needed.

“We are not days away—we are potentially weeks away, … the second half of February,” Kofman said. He said he disagrees with the “massive estimates you get from Ukrainians about the forces required” to effectively take over the country. “They’re probably going to need a lot less. … They could do a rolling start,” with reinforcements coming swiftly from Russia and other nearby areas.” He said a force of 75,000-80,000 troops, with 50,000 in support, would put Russia “in good shape” for success.

“Just remember, we invaded Iraq, which has 26 million people, with a coalition force of 177,000,” Kofman said. “We’ve done it.”

He also said there’s likely “war optimism” in Moscow, thinking it can succeed with fewer assets than others might assume, and that “that the cost of occupation would be cheap.” The U.S. has also made this error in Iraq, he noted.

Zagorodnyuk countered that Russia doesn’t need to just force its way into Ukraine, “but to stay there. … There’s no point in getting there and then getting out.” To control Ukraine, “they would need way higher numbers than they have right now.”

Ukraine is well prepared; there is no element of surprise; and Russia can’t predict how it would go, Zagorodnyuk said. “How can they control the safety of their people? … [There are] many questions about that.”

Putin’s Calculations

John E. Herbst, senior director of the Atlantic Council’s Eurasia Center, is not so sure a Ukraine invasion is forthcoming. Putin faces “a very serious reaction from the West, which will be quite damaging to Russia.” Putin’s calculation of the costs will weigh against whether he proceeds, Herbst said.

Sanctions, he said, have cost the Russian economy 1-2 percent of its gross domestic product every year, and that could worsen with an invasion. If Russia does take Ukraine, Putin will have another 20,000 NATO forces “on his doorstep … Is that an improvement in his geopolitical position?” Moscow could also likely count on Sweden and Finland seeing an aggressive Russia and deciding they, too, need to join NATO … Another loss for Putin.

“These are countries that had no interest in joining NATO in the past, but now they’re having a serious national conversation about it,” Herbst noted.

Finally, Ukraine will put up serious resistance to an invasion.

“If Russia has learned anything from Donbas, … it’s that they cannot depend on locals to fight this war,” he said. Russia’s operations there “have turned many of the people against them.” There was a “fierce insurgency” in eastern Ukraine at the end of World War II “that lasted for years,” he noted.

While Russia could probably take terrain at “any point,” in Ukraine, “their ability to sustain casualties is another matter,” Herbst said.

If there is major resolve in the West, particularly by the Biden Administration, “the odds of this … go way down.” Herbst added, though, that Biden “has not been resolute enough” and has only upped his stance on Ukraine after strong public pressure “and the embarrassment of the Biden press conference last week.”

John Sipher, a nonresident scholar at the Atlantic Council’s Eurasia Center, said Putin could not invade Ukraine and still save face.

“He controls the narrative at home,” Sipher said, and much of it abroad through media. “He will lie and play the victim, or claim the world came running to Russia.”

Putin’s main strategic goals are his own political survival and control at home, Sipher asserted, “but he also wants the U.S. out of Europe and pliant, weak states on his periphery.”

But Putin already has a win in that he’s “learned a lot already,” Sipher noted. “He can destabilize and threaten at will, and the world will come running … He’s learned that France and Germany can be bought and intimidated. He knows the small countries hung tough, but America’s been pretty wobbly. A third of Americans actually support him, … and 60 percent really don’t care about this issue.”

Moreover, “he’s learned a lot about our intelligence,” Sipher noted, since the U.S. had to use intelligence to push back against him. “I assume he’s also learned a lot about how much support he could receive from China. Are they really supportive, or passively supportive?”

Finally, Ukraine becoming a member of NATO is really off the table, “in a de facto sense.” NATO expansion is a question of debate, while Russia getting out of areas it has already invaded “is not.”

New Analysis of Russian ASAT Provides Clues to Weapon’s Trajectory, Says Risk From Debris Could Grow

Jan. 25, 2022 | By Amanda Miller

The Space Force won’t speculate publicly on details about Russia’s debris-generating test of an anti-satellite weapon in low Earth orbit in November. Outside experts, on the other hand, suspect that the weapon approached the target satellite from behind and below and broke it up into relatively fewer, but more massive, fragments for a satellite its size.

New fragments from the Russian ASAT test have already resulted in hundreds of close “conjunctions” with pre-existing objects, with varying probabilities of a collision, according to a new analysis provided to Air Force Magazine by the space tracking company LeoLabs. A conjunction is when satellites are estimated to pass closely by each other. The new debris has doubled the chance of a collision throughout much of low Earth orbit.

And while half of those conjunctions were with operational satellites, the other half—with derelict objects such as old rocket bodies—were of the type that could pose a greater hazard over time. Meanwhile, fragments too small to track could still cause enough damage to end a mission.

The Space Force’s Space Operations Command stuck with the government’s original estimate in reply to a request for an updated number of new fragments attributed to the destruction of the derelict Soviet satellite Cosmos 1408.

“Currently, the 18th Space Control Squadron continues to track the 1,500 pieces of debris associated with the breakup of [Cosmos 1408],” a spokesperson replied. “It will take months to fully analyze all the data provided by multiple sensors and confidently catalogue each object as originating from this intentional collision event.” The command didn’t provide estimates for how long the fragments are likely to stay in orbit.

Drawing on expertise in hypervelocity phenomenology, astrodynamics, and spacecraft design, however, Darren McKnight of LeoLabs has pieced together clues to the nature of the weapon and drawn conclusions about possible ramifications. LeoLabs tracks space objects with its own radars and matches its observations with the Space Force’s public catalog to predict satellite conjunctions so operators can maneuver their spacecraft out of the way. LeoLabs had cataloged 1,252 fragments of Cosmos 1408 as of Jan. 25.

McKnight said he’s “seen nothing to counter” LeoLabs’ initial analysis of “a likely non-hypervelocity impact,” meaning the warhead probably wasn’t traveling remarkably faster than the satellite it targeted. In that case, “it would be very difficult to have the geometry to be anything other than from behind (and of course from below),” McKnight said in an email.

“Complicated warhead design could possibly obfuscate the approach trajectory, but it is hard to understand why that would be useful,” said McKnight, a graduate of the Air Force Academy who also taught there.

A non-hypervelocity collision tends to create fewer, larger fragments and to transfer more momentum to the debris, according to one of LeoLabs’ earlier reports. The fragmenting of the 2,200 kg Cosmos 1408 into “only” about 1,500 pieces suggests that the “average fragment mass is greater than typical,” so the “debris on average may be longer-lived than typical for fragments at the same altitude.”

While the impact of the Russian ASAT test strewed some of the debris into orbits nearly 1,000 km higher than Cosmos 1408 was orbiting, most of the increased risk of a collision is in the range of 370 to 470 km in altitude. The International Space Station orbits at about 400 km, where the new debris has so far more than doubled the probability of a hit. That’s with debris fragments 10 cm and larger only partially cataloged and hundreds more fragments expected. Above 625 km, however, LeoLabs judges the increased risk of a collision as “very small.”

Operators of functioning satellites can mitigate the likelihood of a collision by maneuvering, so the close encounters with derelict objects could present the greater threat over time.

“The potential collisions with massive derelicts will generate yet more debris fragments, adding yet a greater statistical likelihood of catastrophic or mission-terminating impacts,” according to LeoLabs’ report.

LeoLabs logged 351 conjunctions over 30 days leading up to the latest analysis, and that was before many of the fragments had been cataloged.

As of mid-January, two months after the test, more than 75 of the fragments had already reentered Earth’s atmosphere, and the atmosphere was exerting noticeable drag on other fragments sent into lower orbits.

None of the predictions take into account the “likely much greater number” of fragments from the Russian ASAT test smaller than 10 centimeters that are “still capable of causing mission-terminating effects on operational satellites.”

March ARB Named Preferred Location for New KC-46 Tankers

Jan. 25, 2022 | By Amy Hudson

The Air Force selected March Air Reserve Base, Calif., as the preferred location to host the Air Force Reserve’s next KC-46 tankers.

A final basing decision is expected in the fall of 2023 after an environmental impact analysis. If approved, the Air Force will replace March’s KC-135 Stratotankers with 12 new tankers.

The decision was based on site surveys, assessing “mission, infrastructure capacity, community support, environmental considerations, and cost,” according to a Jan. 24 press release.

March beat out Grissom Air Reserve Base, Ind.; Joint Base Andrews, Md.; Niagara Falls Air Reserve Base, N.Y.; and Tinker Air Force Base, Okla., which also were named candidate locations in May 2021. Seymour Johnson Air Force Base, N.C., already hosts Reserve KC-46s.

MacDill Air Force Base, Fla., was picked as the preferred location for the next Active-duty KC-46 base in December 2021. The Air Force already fields Active-duty KC-46s at McConnell Air Force Base, Kan., and Joint Base McGuire-Dix-Lakehurst, N.J.; and Air National Guard KC-46s at Pease Air National Guard Base, N.H. Travis Air Force Base, Calif., also has been selected to receive Pegasus tankers in the coming years.

The Air Force plans to buy 179 of the new tankers, though the program has hit several stumbling blocks, mostly with its remote vision system—a suite of cameras and sensors connecting the refueling boom with an operator inside the aircraft.

Air Mobility Command told Defense News earlier this month that the service has yet to accept the completed design of the revamped RVS system or close its preliminary design review, which was originally slated to close in the fall of 2021. However, AMC spokesperson Hope Cronin said the overall development of RVS 2.0 remains on schedule, according to Defense News.

FTC Blocks Merger of Lockheed Martin and Aerojet Rocketdyne

Jan. 25, 2022 | By John A. Tirpak

The Federal Trade Commission is suing Lockheed Martin to block it from acquiring Aerojet Rocketdyne Holdings Ltd., saying the merger would unreasonably hamper competition and give Lockheed Martin access to inside information about Aerojet Rocketdyne’s other industry partners.

The FTC said its complaint “alleges that if the deal is allowed to proceed, Lockheed will use its control of Aerojet to harm rival defense contractors and further consolidate multiple markets crucial to national security and defense.”

The regulator noted that this is the first time “in decades” that it has sued to block a defense merger. The last such legal challenge was when in 1992 when it sued to block Alliant Techsystems from acquiring Olin Corp. Alliant dropped the merger.

If the Lockheed Martin board elects not to fight the FTC, company CEO James D. Taiclet said the $4.4 billion set aside for the merger would not simply accumulate. Some would probably go to research and development and some to capital improvements, but the company will also look at other opportunities for “mergers and joint ventures.”

“We’ll be working with our board over the next few days and weeks to make that determination,” Taiclet said.

However, Taiclet allowed that there are not many attractive opportunities right now, “so that leads you to share repurchase and dividend growth,” which is the path Lockheed Martin has been following.

“We don’t need to grow our cash balance,” he added. “We’re not just going to sit back … and let it grow. We’re going to reallocate it dynamically.”

He also cited benefits to integrating hypersonics work “vertically” within the company—”the propulsion and the glide body … with the full air system”—because “the more you can integrate that into one engineering organization, … the faster you can go” with a program’s development. But if the Aerojet deal falls through, “we can manage it as we do today, with a propulsion provider outside of Lockheed Martin.”

He added that “we thought we could have gotten the speed and efficiency increase by partial vertical integration of hypersonics” through the Aerojet acquisition, “but we can still manage it, no matter how that deal turns out.”

The FTC is trying to keep Lockheed Martin from “eliminating Aerojet, our nation’s last independent supplier of key missile inputs,” Bureau of Competition Director Holly Vedova said in a press release.

“If consummated, this deal would give Lockheed the ability to cut off other defense contractors from the critical components they need to build competing missiles,” she said. Without the pressure of competition, “Lockheed can jack up the price the U.S. government has to pay, while delivering lower quality and less innovation. We cannot afford to allow further concentration in markets critical to our national security and defense,” she said.

The move came after the FTC interviewed a number of “DOD-impacted stakeholders” and received DOD’s official assessment of the effects of the merger.

The FTC “determined that the proposed transaction harms competition for several weapon systems that DOD relies on,” Vedova said, “and there is no sufficient remedy to alleviate those harms.”

All major defense contractors rely on “critical propulsion technologies of the type supplied by Aerojet,” the FTC said.

Northrop Grumman is the only other contractor that can provide “propulsion inputs for missile systems and hypersonic cruise missiles,” such as scramjets and solid rocket motors, the FTC said. Further, “Aerojet is the only proven U.S. supplier of divert-and-attitude control systems” for missile defense kill vehicles, it said.

If Lockheed gained control over these capabilities, it could harm its competitors’ ability to compete with it, the FTC asserted.

“Specifically, the complaint alleges that the proposed acquisition would give Lockheed the ability to limit, or otherwise disadvantage, competitor’s access to critical propulsion inputs for various weapon systems.”

The combined company could also harm competitors “by affecting the price or quality of the product, the quality of the engineering support, and the schedule and contract terms for developing and supplying” such systems.

“As a contractor, Aerojet also has access to prime contractors’ sensitive information about technological advancements, cost, schedule, and business strategies,” the FTC alleges. “Post-acquisition, Lockheed would have an incentive to exploit its access to its rivals’ proprietary information to gain an advantage in competitions against them.”

The government in turn would pay unnecessarily higher prices for hypersonic missile and missile kill vehicles, while innovation and quality would suffer, the FTC said.

Innovation would also be hurt, according to the FTC, because, on its own, Aerojet would apply all its research and development dollars to the technologies in which it specializes. Under Lockheed Martin, “the combined firm would be incentivized to allocate Aerojet investment dollars for the combined firm’s benefit alone, which would stifle innovation.”

The FTC will file the action in the U.S. District Court of the District of Columbia for an immediate injunction against the merger proceeding, pending an administrative trial “scheduled to begin on June 16, 2022,” assuming Lockheed Martin continues to pursue the merger.

The planned merger would have consolidated Aerojet Rocketdyne under Lockheed Martin’s Space and Missiles and Fire Controls units.

Under the merger’s proffers, Lockheed Martin said it would agree to be a merchant provider of solid rocket motors to other contractors, much in the way Northrop Grumman agreed to be a merchant supplier of such products when it acquired Orbital ATK.

In December 2020, when the Lockheed-Aerojet merger was announced, Taiclet said he had consulted with Lockheed Martin’s “peer group” of defense contractors and expected little opposition from them, saying it wouldn’t take “much convincing” to get their approval. He said they would enjoy “more access” to Lockheed Martin products as a result of the merger.

The FTC was likely mindful, though, that Boeing declined to bid on the Ground Based Strategic Deterrent program, won by Northrop Grumman, saying Northrop Grumman’s vertical integration with Orbital ATK had created an insurmountable pricing advantage for the company.

Lockheed Martin’s merger with Aerojet Rocketdyne would give it a key role in the GBSD for upper-stage work.

Asked why Lockheed Martin’s merger with Aerojet Rocketdyne is objectionable while Northrop Grumman’s acquisition of Orbital ATK was not, FTC spokesperson Betsy Lordan said, “It was a different case with different companies and different product markets. In the Northrop/Orbital case, the harm to competition was resolved through a settlement that didn’t require blocking the transaction.”

Lordan said she could not say whether another company would face the same objections acquiring Aerojet Rocketdyne as Lockheed Martin, the No. 1 defense contractor. Merger cases “are very specific,” she said, and it is “impossible to speculate on whether the agency would have sought to block another potential acquirer of Aerojet.”

African Air Chiefs Meeting Connects Partners Where U.S. Presence Is Limited

Jan. 25, 2022 | By Abraham Mahshie

AFRICAN AIR CHIEFS SYMPOSIUM, KIGALI, Rwanda—The 10-hour flight on a U.S. Air Force Gulfstream III from Ramstein Air Base, Germany, to Kigali, Rwanda, reminded U.S. Air Forces in Europe-Air Forces Africa chief Gen. Jeffrey L. Harrigian that even a small investment in Africa goes a long way toward advancing American security and building partnerships on the continent.

“I was reminded, as I flew from Germany down here, the size and scope of the continent,” Harrigian told Air Force Magazine in a press briefing following the opening ceremony of the African Air Chiefs Symposium attended by 32 of Africa’s 54 nations.

“As a global Air Force, across the globe, it is clear to me that our investment of people, time, and resources to the continent, broadly—but probably more importantly, to the people that we work with—is well worth the investment,” Harrigian said. “You may not be able to see it in big platforms and those kinds of things. But you see it in the relationships.”

The U.S. Air Force’s priorities in Africa include building partner capacity to fight terrorism, to conduct strategic airlift, and to respond to humanitarian crises.

“We don’t have any partnership like we have with the United States—for training, capacity building,” said Ghana’s air chief, Air Vice Marshal Frank Hanson.

Hanson graduated from the U.S. Air War College at Maxwell Air Force Base, Ala., in 2016, and his air force flies Airbus CASA C-295 twin-turboprop transport aircraft used for tactical airlift, search and rescue, and maritime patrol.

The West African nation is threatened by piracy in the Gulf of Guinea, the instability of its neighbors, and spillover of terrorist affiliates of the Islamic State group and Al Qaeda, such as from neighboring Burkina Faso, site of a coup Jan. 23.

With help from the U.S. Air Force, Ghana is now becoming a regional exporter of security, operating as a peacekeeper with two donated American field hospitals in Sudan.

Even in countries where China is spending and loaning tens of millions of dollars for infrastructure projects and providing military aircraft, the U.S. is still the partner of choice.

“We are under terrorist attack now—we need ISR,” said Benin Air Force Maj. Brice Tobossou, referring to a December 2021 attack by Islamic militants that killed two Army soldiers. Benin flies Chinese turboprop aircraft.

Tobossou, who was at an opening reception table alongside Air Force officers from Togo and Senegal, said the gathering power of the U.S. Air Force helps drive conversations about sharing best practices and operational know-how.

“We need the [US] leadership to put all of us together,” he added, noting how bureaucracy sometimes prevents air chiefs in neighboring nations from talking until they meet in person at AACS, which went virtual for the past two years because of COVID-19.

Some of the more capable air forces in the region are also strong U.S. partners.

Kenya stepped up when former President Donald J. Trump ordered U.S. troops out of Somalia in January 2021, offering to host U.S. trainers working with countries in the region to better fight the terrorist group al-Shabaab.

“The Horn of Africa is a troubled region. The U.S. plays a big role in moderating issues around that area,” Kenya Air Chief Maj. Gen. John Mugaravai Omenda said on the sidelines of the AACS opening ceremony.

“Kenya is a safe haven in the region. And therefore, any insecurity in any country affects our stability, and our security, and our economy as well,” he added.

Omenda said the U.S. military’s knowledge-sharing greatly benefits Kenya.

“We feel that the U.S. is an international strategic partner who we should always be close to and should work closely with,” he added. “Militarily, it’s just beyond the hardware. It’s beyond sharing of knowledge, information, tracking of events, and making sure that everything is in order.”

The close working relationship, and the U.S. troops stationed at the Manda Bay airstrip in Kenya, turned deadly for Americans on Jan. 5, 2020, when a pre-dawn cross-border attack by al-Shabaab killed an American Soldier and two contractors and destroyed five aircraft. It took a dozen U.S. Marines to repel the attack. A Defense Department review of the Manda Bay attack has yet to be released.

“Terrorists—they hit whatever target of opportunity,” Omenda said, noting that lessons learned were put into place to prevent a repeat attack. “It does not deter us or the U.S. from cooperating and keeping the place safe.”

Terrorism is just one concern that African militaries are confronting with U.S. Air Force assistance. Sharing knowledge and intelligence, and training in the United States, are some of the ways the U.S. is advancing partnerships on the continent with limited spending.

Kenya, as one of the wealthier countries in the region, is also becoming a security exporter, conducting training and technological exchanges with its neighbors. Kenya works with Uganda, Tanzania, Zambia, Malawi, and Ethiopia, and it hopes to soon work with Somalia again once that country becomes more stable.

“Running an Air Force for the African nations is not an easy thing,” Omenda said. “It’s an expensive undertaking. And therefore, we encourage sharing of resources.”

U.S. Puts 8,500 Troops on Alert for Europe Deployment

Jan. 24, 2022 | By John A. Tirpak

The U.S. military told 8,500 troops in the continental U.S. to prepare to deploy to Europe for a potential Ukraine contingency within five days, Pentagon Press Secretary John F. Kirby announced Jan. 24.

These troops would be the U.S. contribution to a 40,000-member NATO Response Force being organized in response to Russian aggression in Eastern Europe, Kirby said. There has been no decision to actually deploy that force—and the troops now on alert may not go to Europe at all, Kirby said. The bulk of the units being alerted are Active-duty ground troops, he added.

Kirby declined to specify which units are affected, saying they will be notified through normal channels.

“This is about placing units on heightened alert,” Kirby said. “It does not mean that they’re going to be jumping on gray tails tomorrow and leaving.”

U.S. Transportation Command “is tracking these prepare-to-deploy orders and will obviously be postured as appropriate, to support as needed.” Kirby did not say whether European Command’s supply of Air Force tankers is being supplemented to be ready for an increase in air transport needs. More details of the units affected will be supplied in the coming days, he said.

President Joe Biden could elect to deploy forces separately or add to the 8,500 if necessary, in consultation with NATO allies, Kirby said. The forces on alert have not yet been “assigned a mission,” he said. So it’s premature to establish what their “success” would look like.

The NRF comprises ground, air, maritime, and special operations forces, Kirby said. Within it is the NATO Very high readiness Joint Task Force, or VJTF, consisting of 20,000 operators across all domains.

The NRF could be activated by a collective NATO decision, but also by “a deteriorating security environment,” Kirby said. “Additional Brigade Combat Teams, logistics, medical, aviation, intelligence, surveillance, reconnaissance, transportation, and additional capabilities” could also be added, either from the U.S. or from Europe, he said.

The NRF alert is not necessarily intended to reinforce Ukraine or respond there if Russia invades, Kirby said. Rather, it is a response in support of NATO members on the alliance’s Eastern flank, who “have said they feel threatened” by Russia’s massing of forces on three sides of Ukraine and in Belarus. Kirby said the alert is intended to “reassure” those allies. The U.S. will honor its “ironclad” NATO Article 5 collective defense obligations if Russia moves against a NATO member, Kirby said. Ukraine, however, is not a NATO member.

Kirby did not answer directly when asked if U.S. military posture in the Indo-Pacific is also being increased, but noted that two carrier battle groups are exercising in the region jointly with Japan.

“It’s not unusual for us to take advantage of the opportunity when you have two aircraft carriers in the same body of water to exercise together,” he said.

The U.S. action is a “prudent response” to Russia’s military buildup near Ukraine, Kirby said, adding that Russia could de-escalate the situation “at any time” by pulling its troops back. NATO “is a defensive alliance,” he said. All U.S. and NATO actions undertaken so far are meant “to deter Russia.”

He also said NATO intelligence has a “pretty good sight picture” of Russian forces in the region and would know quickly if Russia is making an overt military move against Ukraine or a NATO state.

“This is about sending a strong message that we’re committed to NATO and we’re committed to assuring our allies that they’ll have the capabilities they need in case they need to defend themselves.

President Joe Biden met with defense leaders over the weekend at Camp David, and was presented with options for deploying 1,000-5,000 troops to Eastern European countries, with the possibility of increasing those figures tenfold if the situation worsens, according to a report from the New York Times, which the White House did not refute. The Times said Biden will make a decision about additional troops this week.

Over the weekend, the White House touted the delivery of hundreds of thousands of pounds of lethal military assistance to Ukraine, including the provision of Stinger anti-aircraft missiles. Secretary of State Anthony Blinken also signed an authorization for NATO partners to transfer American-origin military equipment to Ukraine.

The Ukraine government asked the U.S. and NATO, generally, to immediately apply further economic sanctions on Russia, but Blinken told CNN that they are better used as a bargaining chip at this point. Once applied, “they are no longer a deterrent,” he said.

Byron Callan, a noted defense stocks analyst with Capital Alpha Partners, told investors in a newsletter Jan. 24 that the group has “raised our probability of a Russian war with Ukraine at scale to 70 percent from 50 percent,” citing U.S. and Russian decisions to recall diplomats from embassies in Kiev, Ukraine, and “continuing Russian force deployments” as driving the increased risk of war.

Air Forces Africa Gears up to Extend Its Reach

Jan. 24, 2022 | By Abraham Mahshie

AFRICAN AIR CHIEFS SYMPOSIUM, KIGALI, Rwanda—The tyranny of distance is the oft-spoken biggest challenge for African air forces in a continent more than three times the size of the United States. But Air Forces Africa hopes a conference with 30 partner nations will shrink the distance by building trust to work together in areas such as shared airlift.

U.S. Air Forces in Europe-Air Forces Africa chief Gen. Jeffrey L. Harrigian flew over the verdant mountains of the richly vegetated East African lake region to touch down in the Rwandan capital of Kigali on Jan. 24 ahead of the 11th African Air Chiefs Symposium. The last two in-person events were cancelled because of the COVID-19 pandemic. This year’s event will take place under heavy COVID restrictions because in a continent plagued by terrorist threats and widely divergent capabilities, relationships matter.

“In the U.S., we get down to business. In Africa, you have to have a relationship with the person that you’re trying to do business with first,” Air Force Col. Beth Lane, a C-17 pilot who in July became the first female secretary general of the African Air Chiefs Association, told Air Force Magazine in the cool summer air of the 5,000-foot-elevation Southern Hemisphere capital. The African Air Chiefs Association is a 26-nation group that includes the United States.

Lane’s experience flying multiple long-haul flights to Africa, including with the Royal Air Force to Kenya and multiple trips to the U.S. base in Djibouti, on the strategically important eastern Horn of Africa, helped her to understand some of the unique challenges of Africa.

“Africa doesn’t have a lot of controlled airspace,” she said. “You have to give position reports to let their air traffic controllers know where you are. So, it’s a little more of the Wild West.”

A flight from Europe requires flying vast distances over the Sahara desert and arid Sahel region with far fewer population centers and airstrips capable of receiving large cargo planes.

C-130s are used frequently on the continent thanks to U.S. foreign military sales and excess defense articles (EDA) allocations to African partner nations.

“A lot of these countries only have one, maybe two,” she said of the platform. “And maybe the maintenance on them hasn’t been done properly, or they haven’t had the money to buy parts.”

With China spending billions of dollars through its Belt and Road Initiative across the continent to nurture favorable support for its political and economic objectives, the United States must find other ways to build partnerships with African countries.

“Where the U.S. can come in is helping to train the maintenance folks, to train the pilots and loadmasters, helping with the supply chain for parts,” Lane said.

“Our adversaries want weak allies and partners, and we want strong allies and partners,” she added. “Regardless of where they fall, we’re better operating together.”

U.S. national security interests on the African continent include fighting terrorism together by strengthening intelligence, surveillance, and reconnaissance (ISR) and creating mechanisms to share strategic airlift capabilities. A recent National Defense Authorization Act will allow EDA to regional organizations such as the Economic Community of West African States (ECOWAS) or the East African community of nations.

Air Force humanitarian assistance also strengthens U.S. relationships by preventing crisis from spreading regionally or globally. In 2014, Liberia’s Ebola outbreak was largely contained thanks to rapid American airlift of medical supplies.

“You’re either delivering lethality or you’re delivering hope,” Lane said.

That means getting troops and ammunition to far-flung reaches of vast countries so they can counter violent extremist organizations. Extending the reach of government also helps nations provide services in areas where radical extremist groups are eager to compete with the government and recruit fighters.

Talking to Africa

Air Force Reserve Lt. Col. Andrew Olayanju Popoola, born and raised in Nigeria until age 12, quickly came to understand that the U.S. Air Force’s approach to Africa must be different.

Shortly before U.S. Africa Command stood up in 2008, he switched from a munitions maintenance officer to air battle management so he could have a chance to make officer and be part of Africa engagement. After a tour at the NATO Airborne Early Warning & Control Force in Geilenkirchen, Germany, those dreams abruptly ended.

“In 2011, I was notified that I was going to be force shaped,” he said. “Fresh coming off of Germany on, you know, high notes and all, doing things. And then, here I am, ‘Sorry, you’re out.’”

Popoola last served at Tinker Air Force Base in Oklahoma with his wife and three children. He then tried to open a restaurant serving west African food in Oklahoma City, but it didn’t take off despite his love for cooking.

He joined the Air Force Reserve and researched ways to get deployed. Soon, he had orders to deploy to USAFE-AFAFRICA as part of the 603rd Air Operations Center at Ramstein Air Base, Germany.

“So, I had this idea—t was really God’s idea. I shouldn’t say it was my idea. It ended up being CABA, the Cadre of African Bridge Advisors,” he said.

Popoola had unique skills and cultural knowledge, and soon he found out a lot of Airmen with a unique understanding from the African continent could help strengthen connections to the air force leaders in those countries.

“In a continent where it’s not about what you know, it’s who you know, everything is all about connections,” he said. “If you don’t understand the culture, you don’t speak the language—how am I going to crack the code?”

In four years, the program has grown to more than 200 members from 18 countries speaking 30 African languages. That type of personal connection matters when it comes to great power competition on the continent.

“There are no Nigerians in the Russian military. Nor are there are any Ghanians in the Chinese air force,” he said. “You need somebody who can speak air force. The technicalities, air power, they understand those tenets.”

Both Lane and Popoola highlighted Rwandan President Paul Kagame’s plan to attend the symposium’s opening ceremony Jan. 25 as a sign of the event’s importance and the United States’ position as a partner of choice on the continent.

“Africans always tell you, ‘You want to go far, you go together. You want to go fast, you go alone,’” Popoola said. “So, if you want to get things done, we work together.”