🔷 Industrial Decay

Fixing the Defense Industry

The Pentagon recently released the much-anticipated 2023 National Defense Industrial Strategy (NDIS). Ok, so only geeks like us were waiting with anticipation. Note to Pentagon: WTH did you throw the ‘2023’ label on it and release it in 2024?

Anyway, we dug through the 60-page document so you don’t have to. The plan has 4 strategic priorities

• Resilient supply chains that can securely produce the products, services, and technologies needed now and in the future at speed, scale, and cost.

• Workforce readiness to provide for a sufficiently skilled, and staffed workforce that is diverse and representative of America.

• Flexible acquisition that result in reduced development times, reduced costs, and increased scalability.

• Economic deterrence to deter…using economics?

We admit, the last one is a bit wonky. We also admit we’re no experts in this realm. So…we found someone who is.

Dr. Chris Michienzi was the CTO in the Pentagon’s Industrial Base Policy office and has first-hand experience (and scar tissue) about the withered US defense industry and efforts (past, present, and future) to restore it to what America needs. OBTW, she also led the effort to surge US munitions production for Ukraine after Russia’s 2022 invasion.

You can read her recent op-ed here, but ultimately everything you’re reading here is a long windup for a soft pitch: listen to our latest podcast where we chat with Chris to break down this new strategy and discuss some of the monumental hurdles that need to be overcome to make this a reality.

As hard as you might think restoring the defense industrial base is—listen to the interview, and you’ll realize it’s 100X more difficult than you thought.

Grab it the show on Spotify, Apple, YouTube or wherever you consume content.

In That Number

3000

Collins Elbit Vision Systems (CEVS) has delivered its 3,000th F-35 Gen III Helmet Mounted Display System (HMDS) for the Joint Strike Fighter program. (click for pic!)

TRIVIA

On this day in 1931, a law was passed making “The Star-Spangled Banner” the official national anthem of the United States. The song was written while watching a large flag above a fort under siege survive an attack, which is obvious when you hear the words. But…which war was it?

A) Revolutionary War (1775-1783)
B) War of 1812 (1812-1815)
C) Mexican-American War (1846-1848)
D) Civil War (1861-1865)

On the Radar

KAI outlined its roadmap to bring manned-unmanned teaming (MUM-T) to South Korea’s air force.

• The Merge’s Take: KAI is one of the companies leading the national effort, so what they say should carry a ton of weight. In the near term, keep an eye on phase 2 of the plan, which runs from 2025 to 2028. They plan on using an FA-50 light combat fighter as a testbed to control up to 4 in-development AI drones called KUS-LW (i.e., the US calls them CCA, Combat Collaborative Aircraft). From there, they plan on extending that to twin-seat KF-21 fighters in 2029+.

The Army continues to make force structure changes. The latest announcement calls for reducing 32,000 jobs, including 3,000 special operations forces, and adding 7,000+ jobs into priority units suited for contested operations.

• The Merge’s Take: Keep an eye on the Multi-Domain Task Forces (MDTFs), the Army’s ‘inside force’ focused on anti-access/area-denial (A2/AD). The service plans to have 5 MDTFs and equip them with hypersonic weapons, long-range strike munitions, air defenses, and ISR drones.

Anduril is teaming up with South Korea’s Hanwha for the US Army’s S-MET robot transport competition. Expect this to happen fast—the Army wants 600+ of these robots ASAP once the winner is decided.

• The Merge’s Take: The tech is cool, but this is less about innovation and more about business strategy. Anduril is “priming” it for the US competition (a key part of their narrative), but subcontracting defense giant Hanwha to help bring their mature robotic vehicle into the US defense market. Side note: Anduril isn’t doing the autonomy either—they are subcontracting that to Forterra, a US self-driving company you’ve probably never heard of—but has robust autonomous transport experience with various terrains (and deployed in combat zones).

A joint effort between the Space Force and National Reconnaissance Office to develop space-based GMTI (Ground Moving Target Indication) is approaching Milestone B in the program’s development stage.

• The Merge’s Take: Milestone B is the step that approves a design to enter the Engineering and Manufacturing Development (EMD) phase. It’s one of hundreds of defense tech programs that are waiting on Congress to pass a budget for FY24—a fiscal year that is now almost half over.

• The Merge’s Spicy Take: Don’t be too sympathetic. Recall that in 2018, the Air Force pushed to retire the E-8C JSTARS and replace it with space-based GMTI. Those planes were retired in 2023, but this program—which only started in 2024—hasn’t even started building the replacement capability. By the time this gets in orbit and operational, there’s likely to be a 7+ year capability gap.

Replicator is still in limbo. The Pentagon submitted a budget reprogramming request to Congress on January 31st, but still no word. Recall that the first tranche of Replicator is the plan to rapidly field thousands of drones in the Pacific by August 2025, and would do so without needing additional money from Congress—but it does need approval from Congress to rearrange funds that have already been appropriated.  

• The Merge’s Spicy Take: Another month to build has been lost to bureaucracy. This has never been a technology problem, as we illustrated here.

They Said It
“We believe that the reintegration of Boeing and Spirit AeroSystems’ manufacturing operations would further strengthen aviation safety, improve quality and serve the interests of our customers, employees, and shareholders”

— Boeing statement on its plan to buy back the airframe manufacturing operations it sold off in 2005. This is being driven by a string of quality control issues surrounding Boeing’s 737 commercial segment

Why you’re reading about it here: Spirit AeroSystems does defense airframe manufacturing too—which includes the new B-21 stealth bomber.  

Knowledge Bombs

• Singapore is adding 8 F-35A fighters to its existing order for F-35B variants

• General Atomics’ XQ-67A OBSS drone completed its maiden flight; the Air Force labeled it a second generation of autonomous collaborative platforms (ACP)

• The Marine Corps’ XQ-58A Valkyrie completed its 2^nd of 6 planned test flights  

• Top Ace’s A-4 Skyhawk aggressor jet now has an IRST sensor, and ICYMI they are also flying Air Force jamming pods on their commercial F-16s

• Lockheed Martin is looking to buy Terran Orbital for $600m—a third of the spacecraft maker’s value when it went public in 2022.  

• Sweden cleared its final hurdle to join NATO

• Raytheon conducted the first test shot of the extended-range AIM-120-based missile called the AMRAAM-ER

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ANSWER
B, the War of 1812. OBTW, the original flag still exists and you can see it on the top floor at the National Museum of American History in Washington D.C. And yes, it’s amazing to see in person.