By Michael D. White, author and freelance writer
The U.S. aerospace and defense (A&D) industry is immense in size and exceedingly complex in make-up.
Encompassing the development and manufacture of a vast array of products from artillery systems and communications satellites to commercial passenger aircraft and submarines, it is undergirded by a network of thousands of smaller suppliers who manufacture aircraft hydraulics, complex operations software, drone parts, helicopter rotor blades, laser systems, and countless other sub-assemblies and components.
In 2020, the industry was able to record $874 billion in revenues, contribute $90.6 billion in exports and hire 2.09 million workers in 2020 despite the significant business and job losses as a result of the COVID-19 pandemic, according to the Aerospace Industries Association (AIA).
The industry, as a whole, represented 1.8 percent, or approximately $382 billion, of the total U.S. gross domestic product, with military aircraft, missiles, space systems and other defense aerospace products accounting for 15 percent, or $13.7 billion, of all A&D exports in 2020.
Defense non-aerospace products—including ships, tracked vehicles, and artillery—represented five percent, or $4.1 billion, of the year’s total A&D exports.
The Department of Defense helped facilitate the cash flow into the A&D supply chain during the pandemic by advancing about $4 billion in progress payments across 1,400 government contracts in 2020.
The data was recently published in the Washington, D.C.-based industry group’s latest annual report, which was developed in partnership with IHS Markit, which also identifies several growth areas for the industry, including small unmanned aerial systems, space commerce, and advanced air mobility vehicles.
U.S. A&D exports fell to $90 billion in 2020, or by 39 percent, yet still amounted to 6.3 percent of total U.S. exports. Sales to the industry’s top foreign buyers—Germany, France, the United Kingdom, Canada, Japan, and Brazil—accounted for a trade balance of $40.6 billion, while foreign direct investment in U.S. aerospace actually rose in 2020, to $20.7 billion, strongly led by UK firms.
The defense industry, including aerospace, is huge and complex. It serves both military and commercial markets.
LAND
Though it took a serious hit in President Biden’s fiscal 2022 defense budget request compared to the other military services, the U.S. Army was able to preserve its top modernization priorities, which includes 35 signature systems, as well as programs that officials view as key enablers to achieving a modernized fighting force by 2035.
The Army’s budget request of $173 billion for FY22 represents a $5 billion reduction compared to the previous year’s request of $178 billion.
The service plans to spend $2.8 billion less than what was enacted in FY21 in procurement, asking for $21.3 billion. The Army wants to buy less aircraft and combat vehicles in the legacy fleet than originally planned in FY22.
U.S. Army aerial defense experts are asking industry leaders to develop prototype 300-kilowatt laser weapons to protect soldiers and installations from rockets, artillery shells, mortar rounds; unmanned aerial vehicles (UAVs); helicopters, and fixed-wing aircraft.
According to the Army Rapid Capabilities and Critical Technologies Office at the Redstone Arsenal, Alabama, the search “is expected to provide as many as four complete laser weapons that comprise beam control, beam director, battle management, power, and thermal management integrated onto an Army-furnished platform that incorporates an Army-directed laser weapon” that will be identified by October 2022. The aerial defense laser weapon systems prototypes must be delivered by summer 2024 for live range testing.
A team of U.S. Army soldiers will drive the U.S. Army’s Robotic Combat Vehicle (RVC) through major testing this year. The service took delivery of the first of four RCV-Light vehicles in November 2020.
The vehicle is being developed by a partnership between Michigan-based Pratt Miller and QinetiQ North America of Waltham, Massachusetts. Last year, the Army received both the light and medium variants of the RCV and started work in small teams before a planned company-level evaluation this coming year. Soldiers used a remote control from behind a berm and tethered drone video feeds to locate targets.
The RCV Light is a diesel-electric hybrid with a gross vehicle weight of no more than 8,500 pounds. It can reportedly handle a maximum payload of up to 7,000 pounds at a top speed of about 40 miles per hour.
Last fall, Northrop Grumman Systems Corp. in Huntsville, Alabama, was awarded a $10 million contract for the procurement of Integrated Air & Missile Defense Battle Command System production hardware and software. Work will be performed in Huntsville, Alabama, with an estimated completion date of Dec. 31, 2025.
San Diego-based General Atomics Aeronautical Systems has been awarded a $103.2 million deal for the production of Gray Eagle unmanned aircraft systems, satellite airborne data terminals, and government furnished equipment maintenance.
The Gray Eagle is an extended range/multipurpose unmanned aircraft system developed by General Atomics Aeronautical Systems for the U.S. Army. The aircraft has an endurance of 25 hours and can operate up to 29,000 feet while carrying an internal and external payload of up to 1,075 lbs.
Reston, Virginia-based Leidos Inc. has been awarded a $105 million hybrid—cost-no-fee, firm-fixed-price—contract for upgrades and production of legacy gunnery training simulation systems for the U.S. Army. The work has an estimated completion date of Jan. 24, 2027.
BAE Systems recently announced that the U.S. Marine Corps has awarded the company a contract modification for the second lot of full-rate production of Amphibious Combat Vehicles (ACVs). The contract award of $169 million is for 33 vehicles.
The ACV is an eight-wheel drive, armored vehicle with open-ocean amphibious capabilities and land mobility, and “is a unique combination of previously fielded amphibious vehicles and new technological advances to the fleet’s amphibious capabilities,” the company said.
The U.S. Army recently awarded a five-year-contract valued at about $1.4 billion to Falls Church-based Fortune 500 defense contractor Northrop Grumman Corp. for low-rate initial production and full-rate production of the Integrated Battle Command System (IBCS)—a centerpiece of the U.S. Army’s modernization strategy for air and missile defense capability.
Under the contract, Northrop Grumman will produce and field IBCS and provide product engineering and logistics support for the U.S. and select allied forces through foreign military sales. Work locations and funding will be determined with each order and the work is expected to be completed by Dec. 22, 2026, according to the Department of Defense (DOD).
The Oshkosh Corp. has unveiled a new hybrid-electric version of its Joint Light Tactical Vehicle, called the eJLTV.
According to the Wisconsin-based company, the eJLTV “offers the U.S. Army and U.S. Marine Corps the same level of performance and protection as the base JLTV with the addition of silent drive, extended silent watch, enhanced fuel economy, and increased exportable power that enables it to be used in combat and reconnaissance scenarios.”
The new vehicle was unveiled in anticipation of the U.S. Army’s plans to recompete the JLTV program and issue a follow-on production contract worth $6.5 billion in September 2022.
A joint venture between Gilbane, a Rhode Island-based construction firm, and the German engineering company Zueblin has secured a $969 million contract to build a military hospital in Kaiserslautern, Germany.
For the new Rhine Ordnance Barracks Medical Center Replacement project, the industry team will construct a 985,000-square-foot facility with nine operating rooms, 120 examination rooms and 68 beds, the Army said.
The facility, which will become the largest U.S. medical institution overseas upon completion, is designed for treatment of U.S. service members, civilians and contractors in Europe, Africa and Central and Southwest Asia. Construction is slated for completion in late 2027.
The Croatian government has said it will acquire 89 Bradley M2A2 fighting vehicles, from the U.S. in a deal valued at $196 million. Negotiations to finalize the deal have been ongoing since 2017. Under its terms, the country will receive 62, fully-equipped fighting vehicles, five for training, and 22 for spare parts, taking the order to 89 vehicles, instead of the initially planned 84 units. The U.S. will start delivering the vehicles in 2023. The M2A2 is manufactured by Virginia-based BAE Systems Platforms & Services.
SEA: ASHORE AND AFLOAT
The Navy and the DOD have been working since 2019 to develop a successor for the 355-ship, force-level goal set three years earlier.
In June 2021, the Navy released a long-range Navy shipbuilding document that presents the Biden Administration’s emerging successor to the 355-ship, force-level goal. The document calls for a Navy with a more distributed fleet architecture, including 321 to 372 manned ships and 77 to 140 large unmanned vessels.
A September 2021 Congressional Budget Office report estimates that the envisioned fleet would cost an average of between $25.3 billion and $32.7 billion per year in constant FY2021 dollars to procure. These figures, the report states, are 10 percent to 43 percent higher the $22.9 billion in constant FY2021 dollars that Congress has appropriated, on average, for all Navy shipbuilding activities over the past five years.
The U.S. Navy’s proposed FY2022 budget requests the procurement of eight new ships, including two attack submarines; one Arleigh Burke-class destroyer; one Constellation-class frigate; one John Lewis-class oiler; two towing, salvage, and rescue ships; and one ocean surveillance ship.
The total of eight new ships requested for FY2022 is one more than the total of seven new ships that were projected for FY2022 under the Navy’s FY2021 budget and four less than the 12 new ships shown in a long-range shipbuilding plan that the Trump Administration submitted on December 9, 2020.
As the Navy continues to analyze how unmanned drones will play into the future of the fleet, U.S. Naval Forces Central Command has begun operational testing of a sailboat-style drone.
The sensor-packed Saildrone Explorer being tested in the Gulf of Aqaba off Jordan could provide the Navy with a relatively inexpensive zero-carbon tool for seeing “over the horizon.” The drone is 23 feet long and 16 feet tall and relies on wind power to move.
Housing a solar-powered sensor package, the vessel was built by Alameda, California-based Saildrone.
Other surface drones made by the company have gone out on yearlong data collection missions, and one made a “no-handed” voyage from San Francisco to Hawaii in 34 days in 2013, according to the company. The U.S. Coast Guard began testing Saildrone vessels in the fall of 2020 off Hawaii.
In January, the Navy’s third and final Zumwalt-class destroyer—the U.S.S. Lyndon B. Johnson— departed the General Dynamic’s Bath Iron Work shipyard in Bath, Maine, after completing the first of a two-part delivery scheme for the Zumwalt-class.
The Navy formally accepted completion of production and test activity for the ship last November. The ship is now at the Ingalls Shipbuilding in Pascagoula, Mississippi, where its combat radar and weapon systems will be installed.
That same month, Huntington Ingalls Industries’ Ingalls Shipbuilding division launched the amphibious transport dock Richard M. McCool Jr.
The San Antonio-class assault force vessel will support U.S. amphibious assault, special operations and expeditionary warfare missions through the first half of the 21st century.
The McCool is the first of 11 ships of this class, which is eventually slated to replace up to 41 previous assault vessels.
Among other capabilities, the new ship is designed to operate the Marines’ new MV-22 Osprey tilt-rotor aircraft, alongside the standard well decks for hovercraft and amphibious armored personnel carriers.
Pascagoula, Mississippi-based VT Halter Marine Inc. has been awarded a $553 million fixed-price incentive modification to a previously awarded contract to exercise an option for the detail design and construction of the second Polar Security Cutter (PSC) for the U.S. Coast Guard.
Work will be performed in Pascagoula; Metairie and New Orleans, Louisiana; San Diego, California; Mossville, Illinois; Mobile, Alabama; Boca Raton, Florida; and several other locations and is expected to be completed by September 2026, the company said.
The PSC is 460 feet-long with a full-load displacement of 23,200 tons. Powered by diesel/electric engines, the cutter can accommodate a crew of 186 and is equipped with a large flight deck that can handle helicopters such as the H53 King Stallion or Sikorsky H-60.
Last December, the Defense Information Systems Agency tapped AT&T to consolidate and upgrade the Coast Guard’s disparate data networks, handing the company an 11-year contract valued at $161 million.
As part of the task order, AT&T will supply the Coast Guard with an IP-based Wide Area Network, as well as several other services including ethernet, virtual private networking, private line, fixed wireless, optical wavelength, and commercial satellite communications.
“The operator will become the Coast Guard’s principal provider of global data telecom services and will manage those services across the agency’s 1,200 locations,” according to the contract. Planning for the new network is currently underway.
The University of South Carolina, Columbia, South Carolina, is awarded a $10,019,055 cost-plus-fixed-fee contract for science and technology research into digital twin technologies for Navy power and energy systems. Work will be performed in Columbia, South Carolina, with an expected completion date of Dec. 20, 2024.
The Navy wants a new warship to fire hypersonic missiles and lasers that would be ten times more powerful than the service’s existing laser weapons, according to the most detailed outlook to date of the DDG(X) next generation warship issued by the service.
The warship, slated for the start of construction in 2028, will be the largest built in two decades and is being designed to provide the Navy with a successor to the current systems aboard service’s current fleet of Arleigh Burke-class guided-missile destroyers.
AIR: CIVIL AND MILITARY
Civil Air
In 2021, civil aviation, the industry’s second largest end-user, saw record-setting declines in customers and operating revenue, leading to dramatic cuts in expenditures on new aircraft, spare parts, and other related products as the COVID-19 pandemic severely impacted global passenger service.
At the same time, the full-year demand for air cargo increased by 6.9 percent, compared to 7.4 percent in 2019 and 18.7 percent in 2020.
According to the International Air Transport Association, this was the second biggest improvement in year-on-year demand since the Montreal, Canada-based trade group started to monitor cargo performance in 1990.
The big player here is Chicago-headquartered industry giant Boeing, which delivered more than 340 aircraft last year, up from 157 in 2020.
In January, Boeing said it is preparing to launch its 777X freighter, the company’s first new jet model in nearly five years. Qatar Airways has said it may acquire 50 of the new planes and is expected to place a firm order for about 15 of the aircraft, the freighter version of Boeing’s largest twin-engine jet. A combination of options and conversions of existing orders would make up the rest of its commitment, say media reports.
That same month, China Airlines announced the purchase of four more B777 freighters. The Taiwan-based carrier, which in 2020 was ranked the tenth-largest freight carrier by IATA, said the deliveries are slated to commence in 2023 and will be completed in 2024. They add to a previous order for six of the aircraft.
The carrier, which also operates 18 B747Fs, began taking delivery of its existing order of six B777Fs in 2020. So far, three of the aircraft have been delivered, with two more slated for 2022 and one more lined-up in 2023.
Colorado-based Boom Supersonic, developer and builder of the Overture, said to be the world’s fastest and most sustainable supersonic airliner, has said that it has entered into a three year strategic partnership with the U.S. Air Force valued at up to $60 million.
The Air Force awarded the contract to Boom to assist in the continuing research in the development of the aircraft, which is expected to give the Air Force a future strategic capability in rapid global transport and logistics, and on the civil side, carry as many as 88 passengers at twice the speed of today’s airliners.
The supersonic airliner is slated for production in 2023 and roll out in 2025 with passenger service expected to begin by the end of this decade.
Airbus—Boeing’s primary global competitor in the civil aircraft sector—has begun delivery of all aircraft from its U.S. manufacturing facility in Mobile, Alabama, with a blend of U.S.-sourced sustainable aviation fuel (SAF) and conventional jet fuel.
The move “is a further step in Airbus’ ongoing commitment to carbon-neutral growth in the aviation sector, with a long-term goal of developing a zero carbon-producing commercial aircraft by 2035,” the company said.
Since the launch of this initiative, American Airlines, Breeze Airways, Delta Air Lines and Spirit Airlines have taken delivery of Airbus aircraft with SAF on board. The company’s Mobile facility delivers both A220 and A320 Family aircraft to U.S.-based customers, and since 2016, has delivered 284 aircraft.
Military Air
The multinational $382 billion F-35 Joint Strike fighter program may well be the largest single global defense program in history with distinct versions being produced by Lockheed Martin for the U.S. Air Force, U.S. Navy, British Royal Navy, and U.S. Marine Corps.
The Abraham Lincoln Carrier Strike Group set sail in January for a patrol of the Indo-Pacific region in an operation that includes the first deployment of the F-35C joint strike fighter by the U.S. Marine Corps.
Maryland-headquartered Lockheed Martin has significantly expanded the global footprint of the F-35 program with two new countries—Switzerland and Finland—recently selecting the aircraft for their 2021 fighter jet programs.
Denmark received its first F-35 and the Royal Netherlands Air Force became the ninth nation to declare its F-35 fleet ready for initial operational capability. Nine nations have F-35s operating from bases on their home soil, while 12 services have declared Initial Operational Capability and six have employed F-35s in combat.
The program operates on a tiered system with development partners including the U.S, Great Britain, Italy, the Netherlands, Australia, Canada, Denmark, Norway, and Turkey with Singapore and Israel on board as Security Cooperation Partners.
Top Aces Corp., a leading provider of advanced adversary training, has successfully completed the initial test flight of its F-16 Advanced Aggressor Fighter (F-16 AAF). The aircraft is equipped with the company’s Advanced Aggressor Mission System (AAMS) that, the company said, “enables the replication of the most advanced capabilities of contemporary air-to-air combat opponents.” With the completion of the first test flight, the F-16 AAF will now execute a series of robust operational test activities in preparation for its entry into service with the U.S. Air Force.
The Pentagon has contracted with BAE Systems to produce and install a new airborne high frequency radio to replace the AN/ARC-190 on various types of aircraft. The contract calls for approximately 2,500 radios to be installed on Air Force, Navy, Marine Corps, and Coast Guard aircraft.
The Israel Ministry of Defense inked an agreement estimated to be worth $3 billion with the U.S. for a dozen CH-53K helicopters and a pair of KC-46 refueling aircraft.
The Ministry said in a statement that it would order the helicopters from Sikorsky, a subsidiary of Lockheed Martin, and that the acquisition would be “part of an upgrade of Israel’s air force capabilities and includes an option to buy six additional helicopters.”
In August, Rolls-Royce completed a six-year, $600 million modernization of its manufacturing campus in Indianapolis, Indiana.
The revitalized campus “is now highly efficient and will improve competitiveness in an increasingly contested marketplace for aircraft propulsion and power equipment,” the company said. The energy efficiency of the buildings “has also been improved significantly and will help Rolls-Royce achieve its goal of net-zero carbon emissions in operations by 2030.”
The facility primarily serves U.S. military customers, manufacturing engines and components for the C-130J Super Hercules; V-22 Osprey; E-2 Hawkeye; Global Hawk and Triton; F-35B Lightning II; and other military aircraft. The site also produces aircraft engines and power components for the U.S. Navy.
In January, Boeing and the UK Ministry of Defense signed an agreement for the U.S. company to provide long-term training, support and sustainment for the British Army’s new fleet of 50 Apache AH-64E helicopters.
Under the new $348 million Long Term Training and Support Services contract, the company “will work closely with the British Army to provide maintenance and engineering support, supply chain and logistics management,” and also deliver aircrew and maintenance training from its advanced facility at Middle Wallop. The new agreement will run until 2040.
Boeing also delivered the first of five P-8A Poseidon maritime patrol aircraft to the Royal Norwegian Air Force. The delivery last fall comes four years after Norway entered into an agreement with the U.S. Navy for the P-8A, and two years before the new aircraft are scheduled to begin taking over the service’s maritime patrol duties. Norway’s four remaining aircraft are all in advanced stages of production and will be delivered in 2022.
Last November, the aerospace giant has delivered its 50th KC-46A aerial refueling tanker to the U.S. Air Force. According to the company, the 49th and 50th KC-46A tanker deliveries to the U.S. Air Force left Boeing Field in Washington State and later arrived at Joint Base McGuire-Dix-Lakehurst in New Jersey, the fifth operating base for the aircraft. The previous month, Boeing delivered the first KC-46A to the Japan Air Self-Defense Force.
Sweden’s Saab has opened a new multi-million dollar facility in West Lafayette, Indiana, to support the company’s production of the U.S. Air Force’s next-generation T-7A Red Hawk jet trainer.
When at full capacity by 2027, the company said the new facility, sited adjacent to the campus of Purdue University, will initially serve as the site for domestic production of Saab’s aft airframe section for the aircraft program, “as well as research and development in autonomy, artificial intelligence, and advanced manufacturing.”
The T-7A Red Hawk is an advanced pilot training system designed and manufactured through a Saab-Boeing partnership for the U.S. Air Force, to train fighter and bomber pilots.
SPACE
In all likelihood, this segment will define the future for the aerospace and defense industry with non-military, commercial demand forecasted to surge over the coming decades as more private-and public-sector entities around the world increase their dependence on satellite-based technologies for global positioning systems, weather forecasting, telecommunications and much more.
A record $7.7 billion of private investment went into space-related technology globally in the first nine months of 2021, according to the latest figures published in Seraphim’s Space Index—a significant percentage of which was pumped into U.S.-based firms.
In December 2021, NASA awarded Northrop Grumman a $3 billion booster production and operations contract to support the Space Launch System (SLS) rocket through 2031. The award includes follow-on production and flight sets for Artemis IV through Artemis VIII rockets, as well as production of the Booster Obsolescence and Life Extension boosters for the Artemis IX.
The SLS rocket is considered a strategic part of NASA’s “backbone for deep space exploration.” The contract award supports the design, development and testing of the next generation five-segment solid rocket boosters to supplement and replace the space agency’s eight remaining reusable Space Shuttle Program-era assets.
The U.S. Space Force is working with Raytheon Technologies to fulfill a $67 million contract to test a prototype for its Electro-Optical Infrared Weather System. The program is expected to replace the Defense Meteorological Satellite Program, which has provided cloud characterization and theater weather imagery observations data to the military since the 1960s. Those satellites are nearing the end of their service life, with officials expressing concern that they may not survive until 2024. Congress directed the Air Force to replace DMSP with a new system in 2015.
Space Micro, a defense and NASA contractor recently acquired by Voyager Space, has won a contract to design a laser communications terminal to connect military aircraft with geostationary satellites in orbit. The Air Force selected Space Micro “to develop an air-to-space laser communications pod that could be deployed on military aircraft or unmanned drones to provide in-flight connectivity.”
The U.S. Air Force Research Laboratory (AFRL) has awarded Virginia-based HawkEye 360 a $16 million contract to provide radio frequency analytics research and development, and to help the government test and evaluate its hybrid space intelligence, surveillance and reconnaissance architecture. Hawkeye 360 operates a ‘constellation’ of nine satellites to detect, characterize and geolocate RF signals stemming from emitters like VHF marine radios, UHF push-to-talk radios, maritime and land-based radar systems, L-band satellite devices and emergency beacons.
The AFRL will also be working with Space X under the terms of a five-year contract to better understand the constraints and viability of using space launch vehicles for point-to-point cargo transport.
The $102 million contract, awarded under the Laboratory’s Rocket Cargo program, is expected to help accumulate “more concrete data about how reusable launch vehicles could be used in future cargo missions and how the commercial capability could be adapted for use by the Department of Defense,” according to Space X.
The intent, it said, “is to ensure the government is ready to leverage the commercial service once industry has matured the capability.”
Condosat operator Loft Orbital, headquartered in San Francisco, California, has ordered more than 15 satellite Arrow ‘buses’ from Airbus Industries. A satellite bus is a general model of the infrastructure of a spacecraft that lays out the internal positioning of instruments and other system components. Initial work will take place at Airbus facilities in Toulouse, France, with as many as two satellites per day produced at the joint venture’s automated production line in Merritt Island, Florida.
BAE Systems has enhanced operations at its Endicott, New York, facility to support the development and advanced manufacturing of subsystems for electric aircraft. The upgraded engineering development, manufacturing and laboratory space “focuses on maturing energy storage, controls and power conversion systems for aviation applications,” the company said. The project “will help address demands for new products in the aerospace industry, supporting next-generation flight for people, cargo and emergency services. In addition, the state-of-the-art space harnesses the use of automation through robotics, improving safety, quality and efficiency during production,” it said.
The National Reconnaissance Office (NRO) has issued contracts to five synthetic aperture radar satellite operators as the intelligence agency continues to look at how these commercial capabilities can be integrated into its missions.
The five companies receiving contracts are Airbus U.S.; Capella Space; ICEYE U.S.; PredaSAR; and Umbra. Unlike traditional electro-optical imagery, synthetic aperture radar (SAR) is unaffected by cloud cover, darkness or inclement weather, making it useful for a number of intelligence gathering missions.
While the value of the contract has not been disclosed, the terms of the contracts will give the NRO access to the companies’ SAR products for operational use in order to assess their applicability to various use cases.
The agreements reportedly do not include analytics products, which will be generated by partners like the National Geospatial Intelligence Agency.
Bio: Michael D. White is a published author with four non-fiction books and well more than 1,700 by-lined articles on international transportation and trade to his credit.
During his 35 year career as a journalist, White has served in positions from contributor and reporter to managing editor for a number of publications including Global Trade Magazine, the Los Angeles Daily Commercial News, Pacific Shipper, the Los Angeles Business Journal, International Business Magazine, the Long Beach Press-Telegram, Los Angeles Daily News, Pacific Traffic Magazine, and World Trade Magazine.
He has also served as editor of the CalTrade Report and Pacific Coast Trade websites, North America Public and Media Relations Manager for Mitsui O.S.K. Lines, and as a consultant to Pace University’s World Trade Institute and the Austrian Trade Commission.
A veteran of the United States Coast Guard, White has traveled in both Japan and China, and earned a degree in journalism from California State University and a Certificate in International Business from the Japanese Ministry of Trade & Industry’s International Institute for Studies & Training in Tokyo.
