June 16, 2019

Morning Coffee: Super Hornet Production to Slow?

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Boeing may slow F/A-18E/F Super Hornet and EA-18G Growler construction to extend the production window into 2017 and give Congress time to order additional aircraft, reports Reuters. Mike Gibbons, vice president of F/A-18 and EA-18 programs said, “Boeing is looking for creative ways to partner with the Navy, including lowering the rate to two aircraft per month, to keep the line running.” US Navy officials have praised the performance, on-time deliveries, and low operating cost of the Super Hornet and Growler aircraft, but defense executives say the 2015 DOD budget will not fund any more of the Boeing planes due to budget restrictions and a growing focus on Lockheed Martin’s next-generation F-35 fighter.

The US has suspended all military exercises with Russia in response to its intervention into escalating Ukrainian and Crimean tensions, reports Defense One. The moratorium includes bilateral meetings, port visits and planning conferences between the two countries. A Pentagon spokesman elaborated, “Although the Department of Defense finds value in the military-to-military relationship with the Russian Federation we have developed over the past few years to increase transparency, build understanding, and reduce the risk of military miscalculation we have, in light of recent events in Ukraine, put on hold all military-to-military engagements between the United States and Russia.”

The Pentagon’s war budget is expected to remain at current levels even if the US leaves Afghanistan, reports Defense News. Analysts believe that DOD will continue to ask Congress to fund war fighting separately from the Pentagon’s base budget which places the expenditures outside of federal spending restrictions. Todd Harrison of the Center for Strategic and Budgetary Assessments said, “This is an uncapped funding stream that exists for DOD, and both the administration and Congress have been willing to use it to soften the impact of sequestration.” The Pentagon’s $496 billion 2015 budget request does not include money for military operations in Afghanistan but those expenditures will be reflected in the overseas contingency operations (OCO) war-funding measure which is currently delayed because the Afghan government has not approved a security agreement.

The USS Somerset, an amphibious assault ship named for the Pennsylvania county where Flight 93 crashed on 9-11, was commissioned earlier this week, according to philly.com. A representative of “Families of Flight 93” said “heroism is not achieved, it is revealed,” and told the Somerset sailors to remember the passengers and crew who did not set out that morning with the intent of becoming heroes.

Rep. Adam Smith (D-WA), House Armed Services Committee ranking member, believes sequestration spending cuts are here to stay, reports Government Executive. Although the Obama administration is submitting a five-year budget that mostly ignores sequester budget caps, Rep. Smith said, “I think if you had to bet, you would bet that sequestration is going to stick around,” and added that leadership doesn’t have the votes to undo the budget caps.

A study of veterans exposed to bomb blasts while serving in Iraq and Afghanistan uncovered signs of lasting brain damage even in cases where there were no outward symptoms such as headaches, dizziness or confusion, reports USA Today. Although a service member may not be obviously hurt after a blast, small changes in the brain may occur although the long term effects of those changes are unclear.

The growing tension in Ukraine is fortifying American defense industry stock and overall future outlooks, according to CNBC. Although US defense budget cuts have been prominent news recently, defense contractor giants, such as Lockheed Martin and Northrop Grumman, are expected to benefit because extensive new technology military spending will be required in the coming years. An annual defense budget of $500 billion over the next few years means that contractors remain a good investment opportunity. Lockheed is estimated to post an annual 4 percent revenue gain through 2018 with much of that growth coming from sales of the F-35 fighter. The stealth fighter may account for as much as 25 percent of Lockheed revenue when it goes into full production.


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