Austin Wright, Politico. While industry raises the alarm about impending defense cuts, another loser in the budget showdown will be the Department of Defense’s civilian workforce. It’s something that as Secretary Robert Gates pushed for, and now a bipartisan group of lawmakers wants at least a 5 percent reduction in force of the civilian contingent. Rep. Duncan Hunter (R-Calif.) says it’s “crazy” that if the civilian workforce continues to grow at its current rate, it will soon outnumber uniformed personnel. Sequestration or other budget deals on the table would incur even steeper decreases in the workforce. Currently, 800,000 civilians work for the Defense Department.
Rhys Jones and Andrea Shalal-Esa, Reuters. Cyber and ISR capabilities are the niche markets the big players in the defense industry are turning to as budgets tighten around the world and lead to many buyouts. Raytheon says its acquisitions haven’t slowed due to projected budget cuts, but many of its recent purchases have been cyber-focused companies. Should sequestration hit the industry, buyouts are expected to increase across the board as access to new exports dries up and new markets have to be found through acquisitions.
Zachary Fryer-Biggs, Pierre Tran and Vago Muradian, Defense News. The last military drawdown in the 1990’s taught defense manufacturers some tough lessons. Fear of repeating those errors today is driving a host of efforts to retain critical talent in their employee pools. One area of good fortune is that this era sees a relative boom in commercial aerospace and segments of continued growth instead of a massive sweeping cut as there was 20 years ago. This is all leveled against an aging population of defense workers with many eligible for retirement in the next five years. That drives companies to invest in STEM programs and partnerships with top engineering schools to attract talent to the industry when many see it as a market space with fewer opportunities.
Peter Apps, Reuters. The Farnborough International Airshow clearly demonstrated that the UAV market is a growth space these days and that the U.S. stranglehold on the market is seeing a host of competitors around the globe. While General Atomics Predator, Northrop Grumman’s Global Hawk and the Lockheed Martin Sentinel own the large size drones and will remain fixtures of U.S. operations, smaller models are gaining ground from the U.K. and Russia. China has stated its intention of building its own fleet of unmanned systems. U.S. manufacturers are pressing hard for export versions of their aircraft to be approved to maintain their grip on the market.
The week ahead:
Tradeshows and Conferences: No significant shows or conferences that we are aware of this week.
Congress: The full Congress is in session this week.
Senate Veterans’ Affairs Committee – Hearing (10:00 AM, Weds, 18 July) Full committee hearing on the nomination of Thomas Sowers II to be assistant VA secretary for public and intergovernmental affairs. Witnesses: The nominee testifies Location: 418 Russell Senate Office Building
Senate Armed Services Committee – Hearing (9:30 AM, Thurs, 19 July) Full committee hearing on the nominations of Gen. Mark Welsh III, for reappointment to the grade of general and to be chief of staff of the U.S. Air Force; Marine Corps Lt. Gen. John Kelly to be general and commander of the U.S. Southern Command; and Lt. Gen. Frank Grass to be general and chief of the National Guard Bureau. Witnesses: The nominees testify Location: 216 Hart Senate Office Building
House of Representatives:
House Armed Services Committee – Hearing (10:00 AM, Wed, 18 July) Full committee hearing on “Sequestration Implementation Options and the Effects on National Defense: Industry Perspectives.” Witnesses: Robert Stevens, chairman and CEO of Lockheed Martin; Sean O’Keefe, chairman and CEO of EADS North America; David Hess, president of Pratt and Whitney; and Della Williams, president of Williams-Pyro, testify Location: 2118 Rayburn House Office Building
House Veterans’ Affairs Committee – Hearing (2:00 PM, Wed, 18 July) Disability Assistance and Memorial Affairs Subcommittee hearing on “Invisible Wounds: Examining the Disability Compensation Benefits Process for Victims of Military Sexual Trauma.” Witnesses: TBD Location: 334 Cannon House Office Building
House Armed Services Committee – Hearing (3:00 PM, Wed, 18 July) Oversight and Investigations Subcommittee hearing on “Withdrawal from Afghanistan: Historical Lessons.” Witnesses: Joseph Collins, professor of national security strategy at the National War College and author of “Understanding War in Afghanistan”; Mark Moyar, historian and author of “Triumph Forsaken: The Vietnam War, 1954-1965″; retired Army Lt. Col. Lewis Sorley, historian and author of “A Better War: the Unexamined Victories and Final Tragedy of America’s Last Years in Vietnam”; ; and Olga Oliker, director of the RAND Corporation’s International and Security Policy Department, testify Location: 2118 Rayburn House Office Building
House Foreign Affairs Committee – Hearing (2:00 PM, Thurs, 19 July) Terrorism, Nonproliferation, and Trade Subcommittee hearing on “When Regimes Fall: The Challenge of Securing Lethal Weapons.” Witnesses: Lincoln Bloomfield Jr., chairman of the Henry L. Stimson Center, former assistant Secretary of State for Political-Military Affairs; Steven Bucci, senior research fellow for defense and homeland security at the Heritage Foundation; and Leonard Spector, deputy director of the James Martin Center for Nonproliferation Studies, Monterey Institute of International Studies, testify Location: 2172 Rayburn House Office Building
House Armed Services Committee – Hearing (10:00 AM, Fri, 20 July) Strategic Forces Subcommittee hearing on “Nonproliferation and Disarmament: What’s the connection and what does that mean for U.S. security and Obama Administration policy?” Witnesses: Former Assistant Secretary of State Stephen Rademaker; Kori Schake, research fellow in Stanford University’s Hoover Hudson Institution; and Scott Sagan, professor of political science at Stanford University, testify. Location: 2118 Rayburn House Office Building
House Armed Services Committee – Hearing (11:00 AM, Fri, 20 July) Oversight and Investigations Subcommittee hearing on Navy shipbuilding and impacts on the defense industrial base in a time of fiscal uncertainty. Witnesses: Navy Vice Adm. Kevin McCoy, commander of the Naval Sea Systems Command; and Sean Stackley, assistant secretary of the Navy for research, development and acquisition, testify Location: 2212 Rayburn House Office Building
Think tanks and other news events:
Woodrow Wilson International Center for Scholars: How to Build a 21st Century Border, Washington, DC (2:00 PM, Mon 16 Jul) Description: A discussion on developing efficient and secure border management strategies. As one of the architects of the 21st Century Border initiative, Alan Bersin, Assistant Secretary of International Affairs and Chief Diplomatic Officer for the Department of Homeland Security, will deliver a keynote address. The panel will then seek to identify the key challenges and opportunities regarding both the security and economic dimensions of border management. RSVP online. Participants: Alan Bersin, Assistant Secretary and Chief Diplomatic Officer, Office of International Affairs, Department of Homeland Security, Chappell Lawson, Associate Professor of Political Science at MIT, Director of the MIT International Science and Technology Initiatives, Erik Lee, Associate Director of the North American Center for Transborder Studies, Christopher Wilson, Associate, Mexico Institute Location: One Woodrow Wilson Plaza, 1300 Pennsylvania Ave., NW, Washington, DC 20004
Government Executive: Building a Leaner Government of the Future, Washington, DC (7:30 AM, Wed 18 Jul) Description: Budget strains have always been a major concern for government managers who must adhere to mandates that seek greater efficiency and make program decisions regarding the investment and management of resources. Today, however, agencies are operating in a far different environment. The Budget Control Act of 2011 stipulates nearly $1 trillion in cuts over the next 10 years. And if the government fails to reduce the deficit as mandated, those cuts could reach upwards of $1.2 trillion through the “sequestration” process. Regardless of which road Congress takes, one thing is clear: federal agencies will need to dramatically rethink their service delivery models for the short-and-long term. RSVP online. Participants: Lisa Schlosser, Deputy Administrator, Office of E-Government and Information Technology, Office of Management and Budget, Peggy Sherry, Chief Financial Officer, Department of Homeland Security, Bobby Smart, Director of Policy and Resources, Office of Warfighting Integration and Chief Information Officer, U.S. Air Force, Steven Kelman, Weatherhead Professor of Public Management, Harvard University’s John F. Kennedy School of Government Location: Ronald Reagan Building, 1300 Pennsylvania Ave NW, Rotunda Room – 8th Floor, North Tower, Washington, DC 20004
Center for a New American Security: A Conversation on U.K.-U.S. Defense Cooperation with U.K. Secretary of State for Defense Philip Hammond, Washington, DC (12:00 PM, Wed 18 Jul) Description: On Wednesday, July 18, CNAS will host The Right Honourable Philip Hammond MP, the United Kingdom’s Secretary of State for Defense, for a conversation on U.K.-U.S. Defense Cooperation. William Lynn, CEO of DRS Technologies and former U.S. Deputy Secretary of Defense, will provide introductory remarks and moderate the conversation. RSVP online. Participants: The Right Honourable Philip Hammond MP, Secretary of State for Defense, United Kingdom, William Lynn, CEO, DRS Technologies, Former U.S. Deputy Secretary of Defense Location: The Willard InterContinental Hotel’s Willard Room, 1401 Pennsylvania Avenue, N.W., Washington, DC 20004
The Atlantic Council and the National Defense University: The Future of US European Command, Washington, D.C. (9:00 AM, Thu 19 Jul) Description: ACUS and NDU are co-hosting a major conference to present the conclusions of a comprehensive project on the future of the United States European Command (EUCOM). This year-long study, co-chaired by Hans Binnendijk, Robert Hunter, Harlan Ullman, and Barry Pavel, was conducted to provide EUCOM with an assessment of the intended, likely, and uncertain consequences of recent events and trends in defense policy. The conference will feature a presentation of multiple issue briefs that assess the following conditions and circumstances and what they mean for the future of EUCOM. RSVP by emailing email@example.com. Participants: Charles L. Barry, Senior Research Fellow at the National Defense University, Hans Binnendijk, Senior Fellow at the Center for Transatlantic Relations and Member of the Atlantic Council, Isabelle Francois, Distinguished Visiting Research Fellow at the National Defense University, Robert Hunter, Director of the Center for Transatlantic Security Studies at the National Defense University, Boyko Noev, Member of the Strategic Advisors Group of the Atlantic Council and Senior Fellow of the European Program at the Center for the Study of Democracy, and Kori Schake, Research Fellow at the Hoover Institution at Stanford University and Member of the Atlantic Council, amongst others Location: Atlantic Council, 1101 15th Street, NW, 11th Floor, Washington, DC 20005
Fred Wellman, President ScoutComms, brings us his weekly review of defense industry news via The Scout Report. Fred served over twenty years as an Army officer in both aviation and public affairs. You can follow Fred on Twitter @ScoutComms.