08 January 2010

BUB: US Defense

This evening's Battle Update Brief focuses on the US Defense establishment:

Secretary Gates will be sticking around a while.


Defense Secretary Robert Gates, the most prominent Republican in President Barack Obama's inner circle plans to remain in his Cabinet post for at least another year.
Gates told Obama in December that he would stay on at least through the end of 2010, Pentagon spokesman Geoff Morrell said Thursday. The White House had no immediate comment.
Gates held the top defense job for two years under President George W. Bush. Obama had asked Gates to stay on shortly after Obama won the 2008 presidential election. The move was meant to maintain stability in a time of two wars and made good on an Obama promise to include Republicans among his close advisers.
Gates' tenure in the Obama administration was never spelled out but was assumed to be for at least one year. A year into the Obama administration, Gates appears to be a key adviser and has showed no sign that he intended to be a short-timer.

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A CBS poll shows that while Americans have a high opinion of their forces, they're not sure they're ready for more action.
Asked to assess the condition of the U.S. military, two in three Americans offer an A or B grade, a new CBS News poll finds. But with wars being fought on two fronts, a majority also say the military is currently spread too thin to respond effectively to another military threat.
Twenty-eight percent of Americans offered an A grade when asked to assess the condition of the military, while 39 percent gave it a B, the largest percentage for any letter.
Twenty-two percent, meanwhile, offered a C grade. Just five percent volunteered a D grade, and even fewer – two percent – gave the condition of the military an F.

Which just goes to show that polling the general public - most of whom couldn't tell Army guys from Air Force guys without a photo assist - isn't the best gauge of military readiness.
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And a defense industry veteran offers a good historical overview of how the defense/aerospace industry became the gang-of-5 pseudomonopoly it is today.
In the decades since, the aerospace industry has morphed into the defense industry, which since the Cold War has gradually consolidated into a handful of look-alike conglomerates, each capable of making airplanes, ships, satellites, rockets and missiles, and the electronics needed to operate them.

The entrepreneurial engineers and flyboys of the early years, and the swashbuckling executives of the Cold War, have largely given way to button-down corporate managers -- General Dynamics' last two chief executives have been a lawyer and a former utility executive, while the heir apparent at Lockheed Martin is a former partner at the accounting firm Ernst & Young. And while they all keep one eye on their government customers, the other is fixed permanently on Wall Street, where investors now expect double-digit earnings growth.

Along with all those changes, the industry's center of gravity has shifted toward Washington. With fewer, bigger companies vying for fewer, bigger contracts, competition has as much to do with politics and marketing as it does with having the best technology. And with so many contract awards now challenged by the losers and so many programs plagued by cost overruns, top executives are devoting increasing amounts of time and attention to government officials and processes. It was surely not lost on Wes Bush, the new Northrop chief executive, that the two biggest and most profitable competitors in recent years are headquartered in Bethesda (Lockheed) and Falls Church (GD). Can Raytheon be far behind?

While all this is great for the Washington economy, I wonder, however, whether it's really good for America. What made the American aerospace and defense industry the best in the world was its knack for taking risks, thinking big and delivering a steady stream of innovative gee-whiz products. But if you talk to people who have been around the industry for a while, you get the sense that too much of that innovative edge has been lost. Some of that is the inevitable result of downsizing and consolidation, and some of the blame can be laid at the feet of a customer that seems to care more these days about reducing risks, cutting costs and adhering to proper procedure. But it only makes matters worse when top executives remove themselves far from the front lines, explaining that what matters most is marketing and finance.

"They've forgotten what made us great," a former Northrop executive told me Thursday. "If you really valued innovation, if you cared about quality and reliability and systems engineering, then you'd say: 'Don't come to Washington. Stay close to the people who are actually designing and producing. Challenge them, inspire them, lead them. The rest will take care of itself.' "


By: Brant

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