The contract period runs May 1, 2024, through April 30, 2029, with an option to extend it to April 30, 2034.

“This contract will accelerate innovation and continue leading the development of the Command and Control, Battle Management and Communications (C2BMC) system,” Lockheed said in a statement. “Under the new C2BMC-Next scope, the system will be upgraded with the latest 21st Century Security technology for faster, multi-domain coordinated responses to emerging threats.”

The C2BMC system connects a wide variety of systems and radars that together form a global missile defense architecture that protects the homeland as well as U.S. and allied forces worldwide from long-range missile attacks.

Work under the new C2BMC Next contract includes bringing in allies and partners, according to the company.

“Part of C2BMC-Next will be enhancing global integration, exploring possibilities of linking this decades-long proven, operationally-fielded system with allied nations for the first time,” the American firm’s statement noted.

“With C2BMC’s already well-established lines of reliable communication — operating 24/7, 365 days a year in more than 30 locations across the world — the ability to securely collaborate with other countries, across multiple domains, from any location in near real-time will be a game changer for the defense industry,” according to Erika Marshall, Lockheed’s vice president for C4ISR, which stands for command, control, communications, computers, intelligence, surveillance and reconnaissance.

The effort under the contract will also include providing C2BMC with technology “that will provide greater Space Domain Awareness,” according to the company’s statement. “Through the connection of sensors, and diffusion of data at a level that hasn’t been done before, this enhancement will allow operators to see a complete view of the battlespace around the world.”

Lockheed has been the prime contractor for C2BMC since 2002. The system, first fielded in 2004, has gone through numerous upgrades, which are spiraled in to adapt to threats. C2BMC was designed to focus from a strategic level down to an operational level.

Recent upgrades since 2021 gave the Ground-Based Midcourse Defense, or GMD, system a single, composite, real-time picture of threats by tying into and fusing data from a broader set of sensors to include satellites as well as ground- and ship-based radars, according to the company.

The GMD system is a U.S.-based capability designed to defend the homeland against intercontinental ballistic missile threats, particularly from North Korea and Iran. The system is made up of interceptors buried in the ground at Fort Greely, Alaska, and Vandenberg Space Force Base in California.

MDA also linked C2BMC to the Army’s Integrated Battle Command System, which provides threat pictures down to the tactical level, as part of recent upgrades. IBCS, which reached full-rate production in 2023, is the command-and-control system for the Army’s air and missile defense architecture.

More enhancements included giving C2BMC the capability to pass data back-and-forth with IBCS and other sensors, including space sensors.

The recent upgrades and upcoming development work done under the contract over the next several years will help the system support the Joint All-Domain Command and Control initiative. JADC2 is the Pentagon’s warfighting strategy focused on building an overarching network to fight advanced adversaries like China and Russia. This would require high-bandwidth, resilient communications as well as the ability to share massive amounts of data to help commanders rapidly make decisions.

Lockheed will perform the majority of its work under the new contract in Huntsville, Alabama, and Colorado Springs, Colorado.

For the long-range plan to be carried out, the first step is executing the FYDP plan through fiscal 2029, per the president’s budget request, which provides plenty of insight into the expectation for ship construction timelines and statuses.

These ship-by-ship details provide insight into recent performance, the changing of expectations and the difficult road ahead for the long-range plan.

The plan outlines an ambitious increase in the number of active battle force ships to meet the goal of an eventual 381 ships (plus 134 unmanned vessels). It shows increasing deliveries effectively across all ship categories through the late 2030s in a baseline plan, and provides an alternative with fewer procurements, but both begin with the assumption that FY25-FY29 FYDP expectations will be met.

Navy leaders recently executed a 45-day review of shipbuilding performance, which highlighted several delays to big-ticket programs. Our analysis of some of these major programs, including the outcome of the 45-day review, shows that the steadily increasing construction spans, paired with an outlook of increasing demand on shipbuilders, will not aid improvement.

Submarines

The Columbia-class submarine is the highest-priority shipbuilding program, and building it according to plan is required for the Navy to stay at the threshold of 10 ballistic missile submarines. Columbia construction has been historically prioritized to the detriment of the Virginia class so that Columbia can use more attention and resources from the shared shipbuilder (ideally to shield Columbia from delays).

According to the recent shipbuilding review, the first boat, SSBN-826, is now 12 to 14 months behind schedule.

While the second boat is not yet officially delayed, it is hard to imagine the construction spans dropping from what is now nearly 100 months for the first boat down into the 70s for SSBN-827 and all subsequent units. Given the second boat is only scheduled to begin construction in FY24, it is too early to see the extent to which SSBN-826 issues will impact SSBN-827 and beyond. One would expect delays for SSBN-827 and onward, especially considering the two boats being built in FY24 are planned to grow to six by FY28.

The Virginia-class program has experienced large delays over recent years as production has ramped up. But for what it’s worth, the Navy has begun incorporating more realistic expectations in its plans.

Since 2019, the months required to build each ship has risen from 68 months per boat to 85 months for the four most recently delivered boats, and is planned to be 95 months on average for all boats currently under construction.

This increase in construction months has been in line with a ramp-up in production as the number of ships being built has risen from 12 in 2019 to 15 in 2024, and is expected to climb to 18 by the end of the decade. Per the FYDP, planned boats are expected to remain around 95 months on average, which appears to be reasonable given recent history.

With the higher-priority Columbia program now officially experiencing delays — which may become more severe — and with Virginia construction ramping up to 18 boats at a time, maintaining the same level of efficiency will be a victory in itself.

Destroyers

Procurement of the Arleigh Burke-class destroyer is planned to continue until FY32, when procurement for the next-generation destroyer DDG(X) should begin.

Between those boats recently delivered and those that have already begun construction, the average actual or planned construction is roughly 70 months per boat and has been trending upward.

The nuance is that the performance is largely unique to the shipyards. DDG-51s are split between General Dynamics’ Bath Iron Works and HII. Those ships under construction or completed by HII average 62 months per boat, while those by General Dynamics average over 75 months per boat.

This disparity in performance is also reflected in the Navy’s forecast, where HII is expected to drive improvement to the program with constructions spans eventually dipping below 50 months, while General Dynamics boats are never expected to break 70.

Whether the issues at Bath Iron Works are due to the beleaguered DDG-1000 program still being wrapped up there or other causes, naval planning is clearly not expecting much to change in terms of DDG-51 construction, besides allocating fewer boats to build going forward.

Meanwhile, HII will be expected to improve construction time by a double-digit percentage while taking on the lion’s share of the work, going from six ships under construction in 2024 to at least nine by the end of the decade.

Aircraft carriers

CVN-79 and CVN-80 are each delayed by more than two years compared to original delivery plans, while CVN-81 is still on schedule. This is largely attributed to CVN-81 being procured in a two-carrier contract, which allowed for procurement efforts to be spread over a much longer period since contract signing.

This gives CVN-81 a longer planned construction span and means less work has been completed, even though construction has technically been ongoing for a few years.

It is still yet to be known if CVN-81 will really be built to schedule, given the keel laying is still a few years away.

Frigates

It’s early days for the Constellation-class guided-missile frigates, but the program is already looking at delivery delays.

Coming out of the recent shipbuilding review, it has been reported that the lead ship, FFG-62, is now expected to be delivered 36 months late. This puts the total construction time for the boat at more than seven years, nearing double the original estimate of four years.

Issues have been attributed to shipbuilder Marinette Marine now managing three programs, including the Littoral Combat Ship program and the Saudi Multi-Mission Surface Combatant. The Navy has stated that it’s taking steps to improve the process.

Given the second ship was only slated to begin the construction process in December 2023, it’s too soon to identify the extent to which these issues will continue — not only for the lead ship, but spread to the next ships beginning construction.

According to the latest plans, the shipbuilder is expected to go from potentially three ships underway in 2024 to more than 10 of the class under construction by 2028, while simultaneously bringing construction spans back down to planned levels. Assuming some level of delay continues for even just the first few hulls, the profile of small surface combatant deliveries and fleet size outlined in the 30-year plan has the potential to shift.

The problems plaguing U.S. shipbuilding have been attributed to multiple factors, from the cutting down of the industrial base in the 1990s to the impacts of COVID-19 on the supply chain in recent years.

Whichever issues can be argued for recent performance on these specific programs, construction performance has not been trending in the right direction, and much of the plan for the upcoming years looks ambitious given where things stand.

For industry to execute the plans in the FYDP, and therefore follow the path that provides the Navy with the capability it needs, major improvements will have to be made.

The shipbuilding community has its work cut out for it.

Theo Egan is a co-founder of Tamarack Defense, a data analytics and advisory firm.

The investments by state-owned Eurenco over the next two years will double propellant production, Macron said during his visit, timed to the kickoff of new production capacity construction. The company will also resume production of the explosive powder used to make propellant charges, after France shut down powder production in 2007 and switched to imports.

The site of the shuttered powder production had become a wasteland. The investment in Bergerac “is, for me, the image of this industrial reconquest and military sovereignty that we want for ourselves and for Europe,” Macron said. The site started production of artillery powder during the First World War.

The target is for the Bergerac site to produce 1,200 metric tons of explosive powder a year, equivalent to 500,000 modular propellant charges, the Armed Forces Ministry said in February.

France has concluded that if it wants to accelerate artillery shell production and secure supply, it needs to control the entire process, including powder, the president said. Currently, French shell production relies on powder manufactured in Sweden.

Eurenco will increase the workforce in Bergerac to 450 in the next 18 to 24 months, after already growing the number of employees to 250 from 200 previously, according to Macron.

The company was awarded about €76 million in subsidies as part of the European Commission’s Act in Support of Ammunition Production to increase production capacity in France and Sweden. Eurenco says it will boost powder production tenfold, double production capacity for modular charges by 2026, and double its ammunition and explosives loading production by 2025.

France needs to increase propellant production both to aid Ukraine as well as for its own defense, Macron said. He said the Caesar 155mm howitzers supplied to Ukraine by France and Denmark rely on propellant to be effective.

Macron added that the world has changed with Russia’s aggression against Ukraine, and said that won’t end even if the war ends tomorrow.

“There’s been a massive rearmament in Russia in recent times, and because you can see military spending and orders increasing all over Europe, and geopolitics changing all over the world,” Macron said. “We’ve set off for a long-term geopolitical and geostrategic shift, in which the defense industry will play a growing role.”

The announcement freezes the assets of General Atomics Aeronautical Systems and General Dynamics Land Systems held within China. It also bars the companies’ management from entering the country.

Filings show General Dynamics operates a half-dozen Gulfstream and jet aviation services operations in China, which remains heavily reliant on foreign aerospace technology even as it attempts to build its own presence in the field.

The company also helps make the Abrams tank being purchased by Taiwan to replace outdated armor intended to deter or resist an invasion from China.

General Atomics produces the Predator and Reaper drones used by the U.S. military. Chinese authorities did not go into details on the company’s alleged involvement with supplying arms to Taiwan.

Beijing has long threatened such sanctions, but has rarely issued them as its economy reels from the COVID-19 pandemic, high unemployment and a sharp decline in foreign investment.

“The continued U.S. arms sales to China’s Taiwan region seriously violate the one-China principle and the provisions of the three China-U.S. joint communiqués, interfere in China’s internal affairs, and undermine China’s sovereignty and territorial integrity,” China’s Foreign Ministry said in a statement.

It insists that the mainland and the island to which Chiang Kai-shek’s nationalist forces fled amid civil war in 1949 remain part of a single Chinese nation.

Sanctions were leveled under Beijing’s recently enacted Law of the People’s Republic of China on Countering Foreign Sanctions, aimed at retaliating against U.S. financial and travel restrictions on Chinese officials accused of human rights abuses in mainland China and Hong Kong.

General Dynamics’ fully owned entities are registered in Hong Kong, the southern Chinese semi-autonomous city over which Beijing has steadily been increasing its political and economic control to the point that it faces no vocal opposition and has seen its critics silenced, imprisoned or forced into exile.

The two companies did not immediately respond to requests for comment.

China has threatened action against foreign companies and governments that aid Taiwan’s defense and the U.S. military presence in the region, leading to commercial boycotts and diplomatic standoffs.

China banned American firms Lockheed Martin and Raytheon from the Chinese market in retaliation for the use of one of their planes and a missile to shoot down a suspected spy balloon that flew over the continental United States last year. Similar balloons have frequently been discovered floating over Taiwan and into the Pacific Ocean.

Despite their lack of formal diplomatic ties — a concession Washington made to Beijing when they established relations in 1979 — the U.S. remains Taiwan’s most important source of diplomatic support and supplier of military hardware from fighter jets to air defense systems.

Taiwan has also been investing heavily in its own defense industry, producing sophisticated missiles and submarines.

China had 14 warplanes and six naval vessels operating around Taiwan on Wednesday and Thursday, with six of the aircraft crossing into Taiwan’s air defense identification zone — a tactic to test Taiwan’s defenses, wear down its capabilities and intimidate the population.

So far, that has had little effect, with the vast majority of the island’s 23 million people opposing political unification with China.

A tender published by the Defense Acquisition Program Administration earlier this month lists a budget of 49.63 billion won (U.S. $36.56 million) for multipurpose variants of the ground robots.

The vehicles will be purchased domestically, said the notice, via a competitive tender. After contract signature, production of an unspecified quantity will proceed till December 2026.

The bid marks the first major acquisition program for Seoul’s ground troops to procure operational UGVs, Kim Jae Yeop, a senior researcher at the Sungkyun Institute for Global Strategy in Seoul, told Defense News. The vehicles are envisioned to carry out reconnaissance, transportation and lightly armed missions alongside manned ground formations.

According to Kim, there are two leading candidates for the bid: Hyundai Rotem and Hanwha Aerospace. “Both companies are important Korean defense contractors, especially for land systems, and have been proceeding with their own UGV development programs,” he said.

Hyundai Rotem confirmed to Defense News that it will participate in the tender, though it declined to specify what platform it will offer.

As for its credentials, a spokesperson noted that the company “was the sole bidder selected for a rapid demonstration acquisition project after initially proposing it to the Korean Army” in November 2020.

That $3.6 million project, a precursor to today’s procurement effort, involved battery-powered HR-Sherpa-based 6x6 UGVs. “Hyundai Rotem’s UGV is the only vehicle that has been in actual operation for more than two years in various terrains in Korea,” the company spokesperson said.

Hanwha Aerospace also has been active in the UGV field, and the company can point to overseas experience. For example, the U.S. military chose Hanwha’s Arion-SMET 6x6 UGV to participate in a Foreign Comparative Testing program that occurred in Hawaii last December. It was the first Korean UGV ever evaluated for potential adoption by the United States.

The Arion-SMET, its name standing for Small Multipurpose Equipment Transport, weighs 1.8 tons, and its batteries permit a road range of 100km. South Korea’s army tested it in 2021, and it was demonstrated to U.S. Forces Korea the following year.

In separate news, the Defense Acquisition Program Administration approved a two-year pilot project, beginning in the third quarter of this year, for a UGV-based air defense system for the Marine Corps. A prototype is to be ready by the second half of 2026.

Armed with a 40mm weapon, the vehicle is meant to automatically detect, track and destroy intruding drones. The new platform is intended to replace existing manned antiaircraft systems, thus streamlining personnel numbers.

Nearby Japan is also adopting UGVs. According to a Rheinmetall press release issued April 8, the German company will supply three Mission Master SP vehicles. Japan is slated to receive these UGVs equipped with cargo, surveillance and remote weapon station payloads in January 2025.

Fluor, an engineering and construction company based in Irving, Texas, will receive about $409 million to finish the project within five years, the company announced April 10.

Tinian is part of the Commonwealth of the Northern Mariana Islands, an American territory north of Guam and about 1,500 miles east of the Philippines. The Air Force launched bomber raids against Japan from Tinian during World War II. Since then, the island’s jungle has grown over the finished runways.

For years, U.S. Indo-Pacific Command — the military organization responsible for the region — has wanted to rebuild them. Its goal is part of what the Air Force calls Agile Combat Employment — divvying U.S. forces into smaller groups around the region. More, smaller groups would make American positions harder to target, the argument goes.

The top military and civilian leaders in the Air Force visited the island earlier this month to survey work on the airfield. Since January, airmen have started to clear hundreds of acres of jungle so that construction work can begin.

Indo-Pacific Command sends lawmakers an annual wish list of projects it deems necessary to deter a conflict in the region. This year’s list included $4.8 billion for infrastructure, though about a fifth of these construction projects show up in the Pentagon’s budget request for fiscal 2025.

Pentagon and military leaders in the Pacific sometimes disagree on where to spend money in the region and what work is even possible in the short term. That’s particularly true when it comes to construction. Materials and workers are much more expensive on Pacific islands than in the continental United States, and projects require bureaucratic rigmarole to start.

The result is often a path paved by delays, a Republican congressional aide told Defense News in January.

“The money takes very long to show up,” the aide said. “Then simultaneously you’re dealing with horrific bureaucratic problems.”

As a U.S. territory with existing sites to build on and mostly flat land, Tinian should be one of the easier places for the Defense Department to work, the aide said.

“It’s not a complicated project.”

These were no ordinary metal widgets, argued Massie, who is a program manager for additive manufacturing — another term for 3D printing — at Naval Sea Systems Command. The three parts were built with 3D printers and delivered in less than a year, ready to go on ships.

“Metal additive manufacturing is ready for prime time,” he said.

Earlier this month, the Navy finished a 45-day review of its shipbuilding programs to assess delays caused by the coronavirus pandemic. It found many, including key vessels like aircraft carriers and submarines, were far behind schedule due to a lack of workers and a brittle supply chain.

For both issues, 3D printing could be the answer. To wit, the Navy says work at its Additive Manufacturing Center of Excellence in Virginia is crucial to its plans for building submarines. Sailors on select ships, too, are using the equipment to build parts they need at sea.

Even still, Massie was cautious about the technology.

“We’re definitely still at the interim phase,” he told Defense News.

The needs are perhaps most clear for the Navy, and yet even for that service, the technology — and the path to using it more widely — is still growing. Describing his command’s additive manufacturing strategy, Massie listed three challenges.

The first is getting more companies on contract.

In March 2023, his office issued a statement of need for 3D-printed parts. Using a shortcut procurement tool known as an other transaction authority, eight vendors signed contracts within six months, and then parts — including those on the display table — arrived in about nine months.

Still, the Navy needs to send a clearer signal to companies, Massie noted. Eight vendors is a start, he explained, but it’s not enough.

The second challenge is simplifying the process by which the Pentagon buys 3D-printed materials.

The other transaction authority illustrates two sides to the existing process. On one hand, Massie said, it shows how quickly the Defense Department can move to buy parts. On the other, it shows that the department is still learning how to buy them.

“We’re not quite there yet, but eventually it will look and feel a lot like procuring traditional materials,” he said.

The final issue involves testing the parts once they’re acquired. It’s one thing to design materials in a lab, but anything the Navy would use on a ship must undergo testing in the field. Officials have identified parts considered low risk for such testing, and service members are working to integrate them onto ships.

“Ideally you just go order the parts from supply and it’s approved and it gets right in,” Massie said. “But the reality is it’s not going to be that easy for us.”

Speaking with reporters last week, Chris Kastner, the chief executive of the shipbuilder HII, described similar challenges.

The biggest role his company will play in 3D printing, Kastner said, won’t be building the parts themselves. Instead, it will be regulatory — getting approval from the Navy to use such parts on ships.

Kastner said he expects those approvals to increase.

“It’s here, it’s happening,” he said of 3D printing. “I would like it to happen much more quickly and [there be] more of it.”

Last May, the Pentagon described in a letter what parts it thinks are safe enough to build with 3D printers and then test on vessels, Massie said.

James Pluta, also a program manager for additive manufacturing at Naval Sea Systems Command, said those approvals are a sign of how comfortable the Defense Department is with the technology.

“Every year or so we’re getting newer guidance ... from leadership that says we don’t just want you to use additive manufacturing, we want you to use it at all opportunities” for these low-risk items, Pluta said.

Speaking on the show floor, he cited examples of ships that needed parts too small to order alone — or below a threshold called the “lowest replaceable unit” — but without which sailors would lose a key capability, such as flying aircraft. In each example, the Navy used 3D printers to rush parts to those sailors, who then fixed the issue.

This year, the Navy plans to focus on installing such materials ashore. But next year, Pluta said, the service has money to install printers on ships, submarines and carriers — around 40 to 50 for polymer parts, and 10 or so for metal ones.

“Over the next year or two,” Pluta said, “we’re going to start to see confidence levels in 3D-printed parts [on ships] increase.”

The Virginia-based defense contractor teased a photo of the novel unmanned underwater vehicle, or UUV, on April 8, coinciding with the first day of the Navy League’s Sea-Air-Space conference in Maryland. The image — darkened along the edges and sporting a sparse backdrop — shows its glider-like body and a rounded nose. Little can be seen of its tail, and its dimensions are unclear.

The Defense Advanced Research Projects Agency in 2020 kicked off the Manta Ray program with the thought of creating a large underwater drone that can operate independently of manned vessels and ports once underway. DARPA later tapped Northrop and PacMar Technologies to design and build preliminary versions.

“At Northrop Grumman, we’re creating a new type of unmanned underwater vehicle,” Todd Leavitt, a company executive, said in a statement at the time. “Our design can carry large payloads over long distances without the need for maintenance or refueling.”

Northrop harnesses machine learning to aid Space Force missile parsing

The U.S. military is increasingly interested in uncrewed technologies and their battlefield application. The Navy is seeking to establish a so-called hybrid fleet, augmenting sailors and Marines with smart machinery and their specialty equipment. Defense News previously reported the service was maturing its manned-unmanned teams in three phases: prototyping and experimenting from fiscal 2024 to 2028; buying and using in fiscal 2029 through 2033; and becoming fully operational in the years thereafter.

Key considerations for Manta Ray development include communication capabilities, high-efficiency propulsion systems and low-power means of threat detection and classification. Having a drone that can survive on its own for protracted periods of time would reduce logistical demands and free up manpower.

Northrop is the third-largest defense contractor in the world when ranked by defense-related revenue. The company earned $32.4 billion in 2022, according to Defense News Top 100 analysis.

During a panel discussion at the Navy League’s annual Sea Air Space conference being held this week at National Harbor in Maryland, Chief of Naval Operations Adm. Lisa Franchetti described the Navy having 88 ships on contract, 66 in construction, and 57 planned for acquisition across the five-year budget planning period. Commandant of the Coast Guard Adm. Linda Fagan spoke of being in the midst of “the largest acquisition that we’ve had since World War II.”

“We know we need a larger Navy; every study since 2016 has shown that, and I think the most effective way to work on that right now is to invest in our industrial base. Franchetti said. “Invest in the workforce. Invest in, alongside our industry partners, in the infrastructure necessary to really set the conditions to speed up the production and the throughput of the ships and submarines.”

Franchetti told Defense News these investments would take time to pay off — but the Navy needed to start budgeting the dollars now, and Congress needed to pass the spending plans on time.

“These investments need to be made, and then they’re going to take time to percolate through the system,” she said. “Getting a budget on time, not having a [continuing resolution], would be very helpful for us to maintain the momentum that we’re trying to achieve. But again, I think it’s going to take a couple of years before we see these investments really paying off in the ability of the of all of our shipbuilders to really produce at the scale that we need them to.”

The Navy in its fiscal 2025 budget requested $3.9 billion to support the submarine industrial base and $227 million for the weapons industrial base, among its efforts aimed at increasing throughput at factories and shipyards.

The CNO said she recently visited several shipyards, and common challenges are recruiting and retaining enough workers, having enough small businesses in the supplier base, and grappling with much longer lead times for material than had existed before.

The Navy can devote government dollars to helping address these issues, she said. But in tandem, she said it was important to focus on “process improvement, data analytics, having a better understanding of seeing where the choke points are,” and making sure the spending is actually leading to faster ship and submarine production.

This need to increase output comes as the Coast Guard is recapitalizing a number of ship classes, with the Polar Security Cutter being the top focus to replace its lone heavy icebreaker, the Polar Star.

“We compete for the same industrial base space, both new construction and repair, with the Navy. And it just is critical for the nation that we’ve got that kind of reliable access and commitment to the new ship capacity, and then repair capacity and maintenance capacity for the ships” in the Coast Guard’s fleet, Fagan said.

Until there’s more construction and repair capacity to meet Coast Guard needs on a relevant timeframe, Fagan said Congress provided the Coast Guard some funds in FY24 to pursue another option: buying a commercially available icebreaker, which would hit the fleet much faster than the Polar Security Cutter program that Fagan hopes will start cutting steel this year.

Buying a commercial icebreaker would be “an acknowledgment of the need to have a ship with additional capacity that we are able to operate in the high latitudes” today, she said — and while there hasn’t been a larger conversation about the Coast Guard continuing to buy off-the-shelf solutions from industry, Fagan said she believed “it is probably a righteous topic to focus on.”

For the Maritime Administration’s part, as it tries to build more dual-use ships that could carry ground forces to a fight overseas, Administrator Ann Phillips touted the benefits of a new vessel construction manager concept that’s kept its National Security Multi-Mission Vessels on budget.

“What’s innovative about this is we started with a firm fixed-price contract, 100% designed and … a very small change order budget, which we have not spent all of,” she said, noting the strict set of requirements the program was sticking to.

Whereas many of the Navy’s shipbuilding programs are running behind schedule and over budget, Phillips said her five NSMVs are “on budget. We’re nearly on time … And we think this particular strategy has great promise for other things.”

The vessel construction manager concept will likely be applied to a future sealift ship, for which Phillips said MARAD was given $12 million in FY24 to begin designing alongside the Navy.

The air-launched weapon can reach speeds up to Mach 10, which equates to about 7,700 mph.

Less than a month earlier, the U.S. had sent a Patriot air defense system to Ukraine to help it fend off the barrage of complex missiles Russia was using. But the system had never proved itself against a missile like the Kinzhal.

Even so, the Patriot system blocked the incoming missile, defusing the weapon and several others, according to U.S. officials.

Since then, the Patriot system has continued to successfully intercept a wide range of Russian weaponry. It has shot down Russian aircraft like Su-34 fighters flying nearly 100 miles away, and intercepted missiles as far as 130 miles away, according to Oleksandr Musiienko, head of the Kyiv-based nongovernmental organization the Center for Military and Legal Studies.

The success of the RTX-made Patriot system in Ukraine comes as the U.S. Army aims to replace the Patriot with an integrated air and missile defense system better able to connect with other equipment on the battlefield and equipped with a more capable radar.

But the Patriot system’s dominance in Ukraine has attracted fresh attention and potential customers from around the world. What might have looked like an aging system not long ago now appears to be a workhorse that could be used for years to come.

“Patriot has prove[d] to be a very reliable system,” said Ben Hodges, a retired three-star general who commanded U.S. Army forces in Europe following Russia’s annexation of Crimea. “The Ukrainians learned very quickly how to operate it, and even more impressively they learned very quickly how to employ it to great effect.”

“Nations are much more alive to the [air and missile defense] threat,” he added.

The successor

The Patriot system was first introduced to counter threats to the United States during the Cold War. But it faced significant battle when forces deployed the system in the Middle East during the Persian Gulf War and the Iraq War.

In those early years, the Patriot experienced major failures. In 1991, for example, the system failed to intercept an Iraqi Al Hussein Scud missile, which hit barracks in Saudi Arabia and killed 28 U.S. soldiers. The system was then involved in three friendly fire incidents in 2003 during the Iraq War; in one case, a Patriot shot down a British Royal Air Force Tornado jet, killing its two crew members.

Despite these failures, the U.S. Army has long relied on the system. Indeed, its Patriot units for years maintained the highest operational tempo across any units in the service with the longest deployments. Despite the incidents in Iraq, it was heavily used there and successfully countered ballistic missile threats.

And plenty of other countries also use the system, which is made up of eight truck-mounted launchers, a ground radar, a control station and a power generator. The launchers can each hold four interceptors.

According to Raytheon, an RTX company that manufactures the Patriot system, 19 countries have purchased the weapon and there are more than 250 Patriot fire units around the world. Tom Laliberty, Raytheon’s president of land and air defense systems, told Defense News in a recent interview the U.S. owns 85-90 of those, with the rest distributed among the other 18 customer countries.

“The system has just been continually improved based on feedback we get from the now 19 countries that use Patriot,” he said.

Russia’s 2014 annexation of Crimea led to a sales burst. Eastern European countries jumped to buy Patriot systems to enhance their own defenses. Romania, Poland and Sweden signed on as new customers in the years between Russia’s annexation of Crimea and the country’s full-scale invasion of Ukraine in 2022.

But during the same time, the U.S. Army started making plans to replace the Patriot, seeking a capability with a more flexible command-and-control system and a radar capable of full coverage. The Patriot radar’s existing configuration creates blind spots for the system.

The Army is slated to build a new Patriot battery to replace the one sent to Ukraine and to secure one more battalion’s worth of systems. But the service will gradually replace individual elements of the Patriot system over the next several decades. Eventually, all of those upgraded elements will become a new system known as Integrated Air and Missile Defense.

The first piece to be replaced will be the Patriot’s command-and-control system, which will be swapped out with the Northrop Grumman-developed Integrated Battle Command System. IBCS, approved for full-rate production last year, will enable the system to connect with a variety of other sensors and shooters on the battlefield.

Next, the Patriot system’s radar is slated to be replaced with the Raytheon-developed Lower Tier Air and Missile Defense Sensor, or LTAMDS. The first set of prototype radars is undergoing tests with the Army; they are expected to offer 360-degree coverage.

In recent months, the sensor completed four successful live-fire demonstrations at White Sands Missile Range, New Mexico.

The Army’s Integrated Air and Missile Defense system will be designed to tie into a broader air defense architecture using IBCS. The service is also expected to be able to easily improve the technology through software updates.

Patriot heats up

But the system’s success in Ukraine has made clear there remains interest for the Patriot in its current state.

Switzerland purchased five batteries and 75 missiles in November 2022, and Romania plans to buy additional fire units. At least two other European countries are close to announcing plans to buy Patriot, according to Laliberty, who declined to identify them.

Germany announced in March it would buy more Patriot systems to augment its air defense capabilities. Raytheon won a $1.2 billion contract that buys radars, launchers, command-and-control stations, spares and support, according to a company statement.

Slovakia has publicly expressed interest in buying Patriot systems following a NATO-owned Patriot system’s deployment to the country in 2022.

Raytheon’s production lines are churning out five fire units for the contract with Switzerland, Laliberty said, and the company anticipates an additional 12 will be under contract within the next 18 months.

“Given that our capacity supports the production of 12 fire units a year, there is sufficient capacity to support current as well as future contracts as they materialize,” he noted.

Raytheon also received a contract in January to replace the U.S. Patriot battery donated to Ukraine. That was paid for with fiscal 2023 supplemental funding approved by Congress.

Now, the company is focused on boosting production of the missiles the Patriot system uses as interceptors. The PAC-3 Missile Segment Enhancement weapons, made by Lockheed Martin, are the most capable missile variant used by the system.

In 2018, Lockheed’s annual rate of building those missiles was 350. The company planned to increase that to 500 annually. But Russia’s full-scale invasion of Ukraine in February 2022 has put new pressure on this effort, and the U.S. Army has provided funding to get Lockheed to 550 missiles per year. In December, the firm said it reached a rate of 500 per year.

The company built an 85,000-square-foot facility equipped with automated systems to build PAC-3 MSE missiles and is now preparing to produce 650 a year by 2027.

Boeing, which supplies the seeker for the PAC-3 MSE, is also planning to accelerate production, according to Jim Bryan, the company’s director of integrated air and missile defense.

Bryan said Boeing last year added 35,000 square feet to its factory, enabling a 30% production increase.

Many of the expansion efforts by Lockheed and its suppliers preceded government funding. The companies are banking on both an increase in U.S. government spending in the coming years as well as a rise in orders from international customers.

“From a demand future, we continue to see it. We meet with customers all the time, and we think we’ll be adding new customers to the MSE line,” Brenda Davidson, Lockheed’s vice president of PAC-3 programs, told Defense News. “The areas of Asia-Pacific and the Middle East continue to be very, very important to us.”

‘Patriot has a place’

Indeed, those two regions have existing Patriot customers that continue to rely on the system. And geopolitical hot spots, such as the Taiwan Strait and the Red Sea, are driving demand for air defense more broadly — regardless of which system is available.

Increasingly savvy ballistic missiles and emerging hypersonic missiles are creating new challenges for air defense systems. The U.S. Army has named air defense one of its highest priorities, and is adjusting its funding accordingly.

In the fiscal 2025 budget released in March, the Army asked for $602 million in research and development efforts for Integrated Air and Missile Defense and $2.8 billion in procurement, which covers modernized capabilities beyond the Patriot system.

For Patriot modifications alone, the Army planned to spend $1.7 billion between FY24 and FY28, according to FY24 budget documents. Now, the Army is requesting an additional $2.29 billion across the same time period to modify and upgrade its Patriot capability, according to FY25 documents.

The head of U.S. Army Space and Missile Defense Command, Lt. Gen. Sean Gainey, said the service has sought to reduce pressure on Patriot air defense units, but has been stymied by today’s demands.

“Prior to the recent increase in deployments, we were continuing to move along a path to regain some of that readiness,” he told Defense News in March. The “demand has limited our ability to regain a lot of that readiness back.”

He said the Army hopes international allies will help as they increasingly buy air defense capabilities.

“It’s going to be a challenge as long as we have the high demand moving forward on our soldiers. But leveraging our partners and leveraging our modernization goals are the ways that we can eventually, sometime in the future, start alleviating some of that pressure,” Gainey added.

Hodges, however, said there remains just one U.S. Patriot battalion committed to Europe.

“I have seen and heard a lot more conversation about” air and missile defense integration among allies and partners in Europe, he noted, “but I have not seen marked increases in capabilities, nor have I seen a large-scale, theaterwide, joint, multinational air [and] missile defense exercise that presents the same sort of challenge a Russian attack would bring.”

“None of us has enough capacity to defend much of what must be protected. So integration and regional approaches are necessary,” Hodges added.

For his part, Gainey said some European countries are interested in adopting the U.S. Army’s modernized capability, including the Lower Tier Air and Missile Defense Sensor as well as the Integrated Battle Command System. Poland, for example, is the first country to field the latter.

“Patriot has a place,” Gainey said. “They will still operate out there hand in hand until we fully modernize the air and missile defense force.”

The United States, where Patriot manufacturer RTX is based, is trying to contend with the rapid use of Patriot Advanced Capability-3 Missile Segment Enhancement missiles in its military operations while ensuring it has enough stockpiled in the event of a Chinese invasion of Taiwan. (Beijing considers the island nation a rogue province and has threatened to take it back by force.)

Missile production is increasing in the U.S., particularly the Lockheed Martin-made PAC-3 MSE missiles, the most capable variant. The company is making hundreds of them over the next two years.

Lockheed was building 350 MSE missiles a year in 2018 and was working to ramp up its production to 500 missiles a year prior to Russia’s full-scale invasion of Ukraine in February 2022.

Lockheed is now fully funded by the U.S. Army to build 550 missiles a year at its Camden, Arkansas, production line. In December, Lockheed hit a rate of 500 per year, Brenda Davidson, the company’s vice president of PAC-3 programs, told Defense News.

The business built a new 85,000-square-foot facility to make PAC-3 MSE missiles complete. The location features a variety of automated systems that make production a smoother and more efficient process, Davidson said.

While the Army has yet to fund another missile production increase, Lockheed decided in the latter part of 2022 that it would continue to invest internally to be able to build 650 a year. “Lockheed could see the demand out there,” Davidson said, adding that the company plans to hit that number in 2027.

Additionally, Lockheed has worked to stabilize its supply chain as much as possible, Davidson said. Aerojet Rocketdyne supplies the solid-rocket motor and is co-located in the same industrial park as Lockheed in Camden. Boeing supplies the seeker and has spent its own capital to keep up with demand.

Lockheed has also added a variety of second-source suppliers to mitigate risk in the supply chain, Davidson said, and is funding sub-tier suppliers to ensure they have the right tooling and test equipment — and are on the same page in terms of what the program requires.

It’s unclear if the U.S. Army sees a need to ramp up its Patriot missile production beyond 650 missiles a year. But Emily Harding, deputy director of the International Security Program at the Center for Strategic and International Studies, said the Pentagon must encourage industry to continue investments that allow for the rapid production of much-needed missiles.

The department, she explained, should essentially tell industry: “Even if, let’s just say for a second, that peace breaks out across the globe tomorrow, we will still fulfill those contracts, so please build them.”

During a December defense conference in Washington, D.C., Army acquisition chief, Doug Bush, sent out a subtle signal, stating that while the draw on Patriot “has been manageable for Ukraine because they have other systems that are helping as well ... the long-term challenge of just having Patriot missiles for a Pacific scenario is the other reason we are asking Congress for support of that investment.”

The Army is “providing stuff out of stock. The build-back time is the concern,” he added.

The service needs supplemental funding, Bush said, in order to ramp up capability like the PAC-3 MSE weapon, noting the pending supplemental request to replenish American stockpiles of weapons and equipment sent to Ukraine includes $750 million to help Lockheed increase capacity by more than 100 a year over its current capacity.

The Senate passed a supplemental funding bill, which included a Ukraine aid package, that would contribute to ramping up the PAC-3 MSE capability, but the legislation is held up in the House.

While stalled during the first half of the fiscal year, the Army will be able to move forward to cement a multiyear contract for PAC-3 MSE missiles through the recent passage last month of the fiscal 2024 defense appropriations bill.

Lockheed continues to place its bet through internal investments and work with suppliers that have long-lead times to deliver subcomponents and parts, Davidson said. And the company continuously talks to the Army about how much more the business could and should ramp up production, she added.

Even without Army funds, “demand for PAC-3 MSE just continues to increase,” Davidson said, noting the company signed six letters of approval last year from international customers.

Lockheed is also pitching the PAC-3 MSE to the U.S. Navy, and is spending $100 million to integrate the missile with the service’s Aegis combat system.

The company plans to test this spring whether it can fire the missiles from a vertical launch system tied into Aegis’s command-and-control technology and the SPY-1 radar. If successful, the hope is the Navy or Pentagon will conduct further tests that could lead to an initial operational capability on a ship.

Seeker supply, rocket motor boost

Boeing, which supplies the seeker for the PAC-3 MSE missile, is also spending money internally to align with Lockheed’s production increase plans, according to Jim Bryan, Boeing’s director of integrated air and missile defense programs.

While Boeing had made some incremental expansions, the company decided last year that “the demand signals were strong enough that [it] went out ahead of any government funding to invest” in a 35,000-square-foot factory expansion for its seekers, which equates to a 30% production capacity increase, Bryan said.

Bryan added that Boeing can build seekers to keep up with the planned 650 missile production rate using the facility it has, but the new location will feature added efficiencies such as the addition of a variety of automated systems to include inspections and robotic soldering.

The new facility also sets up the company to meet “much higher” demand signals above 650, Bryan added.

Meanwhile, orders for solid-rocket motors used on a wide variety of munitions is straining current suppliers Northrop Grumman and Aerojet Rocketdyne. However, the solid-rocket motor industry is growing with some newcomers.

Still, PAC-3 MSE production is weathering that flex in supply and demand, according to Davidson. Aerojet Rocketdyne makes the solid-rocket motors that go with PAC-3 MSE missiles right next door to Lockheed’s missile production line in Camden.

Aerojet opened a 51,000-square-foot facility in the same industrial park in 2022, where it is producing the PAC-3 MSE propulsion system. All of those manufacturing activities are under one roof and is positioning the company, acquired by L3Harris Technologies in July 2023, to significantly increase production rates, Aerojet Rocketdyne has said.

“As we continue to modernize and expand, we have been building in the ability to surge beyond current requirements, including adding manufacturing space and equipment,” Ross Niebergall, Aerojet Rocketdyne’s president, told Defense News in a written statement.

Aerojet has increased rocket motor production from about 70,000 in 2021 to 115,000 in 2023 — a more than 60% increase — the company said. These motors range from ones that can fit in the palm of your hand to the size of a small car. The increases, the company stressed, are tied to contract requirements.

Challenges still remain, Niebergall added. “Solid rocket motor production relies on several important components and materials, and regardless of the number of solid rocket motor providers that exist, we each require these same components and materials — and more significantly, the suppliers who produce them.”

The company is working to partner with suppliers to come up with solutions and ensure they have what they need in terms of capacity and flexibility to support production, according to Niebergall, and it is spending money to support suppliers.

“Thanks to significant internal and government investments, we’re expanding and modernizing key production locations across the country, investing in digital engineering, and pursuing collaborations,” Niebergall said.

Foreign contribution

Meanwhile, in Europe, countries have realized amid Russia’s invasion of Ukraine that they need a greater magazine depth for air defense forces, according to Tom Laliberty, Raytheon’s president of land and air defense systems.

Four NATO countries — Germany, Romania, Spain and the Netherlands — are coming together to buy 1,000 PAC-2 GEM-T missiles and will do a large amount of production in those countries, primarily Germany.

By pooling their resources, the countries get an economic order discount, and since they are being bought collectively, the missiles will be distributed based on priority of need, Laliberty explained.

Raytheon went under contract at the beginning of the year with NATO. While some components will still be made stateside, Raytheon is expanding its supplier base in Europe to build critical GEM-T components and will build an all-up round integration and test facility with Germany’s MBDA.

MBDA subsidiary Bayern-Chemie will become a new rocket motor manufacturer for the missile, and another company in Spain will build a new control actuation system.

Overall, Raytheon’s production of PAC-2 GEM-T missiles is ongoing, with a contracted backlog of approximately 1,500 missiles, including the NATO order and an estimated near-term demand of an additional 1,000 missiles. The company is producing roughly 20 missiles a month and, with the added capacity being through international initiatives, is on a path to reach 35 missiles a month by the end of 2027, according to Laliberty.

The California-based company has already folded the autonomous flight software into three classes of quadcopters, its own V-Bat drone, the F-16 fighter jet and the Kratos-made MQM-178 Firejet drone.

Up next are two more Kratos products, the XQ-58 and BQM-177, according to Brandon Tseng, the president of Shield AI. The firm has not picked a third candidate.

“We want to put our AI pilot on every aircraft under the sun. The V-Bat is fantastic for what it does, but we also recognize we’re not going to build every single aircraft,” Tseng told C4ISRNET on April 8 at the Navy League’s Sea-Air-Space conference. “We’ll work with any original equipment manufacturer who wants to play ball.”

The U.S. Defense Department is increasingly interested in the confluence of artificial intelligence and unmanned technologies. Autonomous drones and machinery with control beamed in from afar can explore places deemed too dangerous for troops, assist with targeting, and introduce additional firepower.

The department in fiscal 2025 sought $1.8 billion for AI — the same amount as the year prior. It also recently launched the Replicator initiative, which seeks to deploy thousands of attritable systems to counter the perceived mass of China.

Hivemind’s ability to integrate with different aircraft is the result of Shield AI’s “software infrastructure, design tools and pipelines,” Tseng said, describing it as the “secret sauce.”

“Google has invested billions of dollars into the Android operating system. Tesla has invested billions of dollars into Tesla’s self-driving, which they’re putting on car to car to car to car,” he added. “We’ve invested a lot into a software ecosystem, where we can quickly put it on aircraft to aircraft to aircraft.”

The secretary is rightly focused on the need for increased investment to facilitate greater innovation and production capacity for strategic competition with China. The management teams of some large defense primes, on the other hand, buy back shares as an efficient way to return value to shareholders after considering the attractiveness of investment opportunities available to the company.

Changing this situation and spurring increased investment in the defense market requires addressing the incentive structures that guide market behavior, including stock buybacks.

Before examining market incentives, it is worth noting that the U.S. government decided many decades ago to largely privatize the defense-industrial base. While the DOD retains a modest number of government-owned arsenals, shipyards and depots, the vast majority of the systems developed and services conducted for the DOD are performed by for-profit companies. These companies have developed the innovations and capabilities that have made U.S. forces the best in the world.

This industrial base includes approximately 200,000 small, medium and large companies, the vast majority of which are privately held. Including those traded on foreign exchanges, there are only about 100 companies that are publicly traded. And only a very small fraction of those companies use share buybacks consistently as a strategic management tool.

Secretary del Toro captures the essence of the anti-buyback argument, which has been articulated by Pentagon leaders for years: “You can’t be asking the American taxpayer to make even greater public investments while you continue, in some cases, to goose your stock prices through stock buybacks, deferring promised capital investments, and other accounting maneuvers.”

Why do defense companies continue to pursue stock buybacks? It is principally the large mature defense primes such as Lockheed Martin, Northrop Grumman and HII that buy back stock. These firms are profitable, generate significant cash flow, have a relatively low cost of capital and are not highly leveraged.

Lack of capital is not a problem hindering investment at the largest defense primes. The issue revolves around the capital allocation decision. If large defense primes are not making significant investments, it is because they believe that this incremental dollar is unlikely to materialize into a profitable contract in the future. For that to change, these primes need to see a better return for the earnings they intend to retain and reinvest. Those returns could come through an increased number of growth opportunities, a greater frequency and volume of competitions, or margin improvement.

In contrast to the large mature primes, smaller publicly traded companies such as AeroVironment and Kratos do not typically buy back shares. They are instead investing in growth, as they see significant opportunities in their own market segments and beyond as the DOD spends heavily in unmanned systems, advanced electronics, autonomy and other areas central to the National Defense Strategy. If similar, larger incentives existed for the larger primes, then that is where capital would be allocated.

Bigger budgets obviously help incentivize investment, but changing how the DOD buys through practices such as open architectures, multiyear contracts and multiple production lines will likewise create more contract opportunities and therefore that stronger demand signal that industry needs to invest.

The DOD is heading in that direction in several important ways, and more emphasis there would be productive. Adopting some of the recent recommendations of the congressional commission on defense planning, programming, budgeting and execution reform, for example, could substantially contribute toward improving incentive structures.

Another promising avenue the DOD can use to incentivize investment by the larger primes revolves around program performance. Secretary del Toro has justly emphasized in his recent remarks that “industry must deliver platforms and capabilities on time and on budget for the sake of our warfighters who are in harm’s way.”

How about, for example, rewarding contractors with substantial profit-margin expansion opportunities for delivering ahead of terms, and punishing them more severely for missing the mark? The beauty of a commercially viable defense industry is that its participants are responsive to incentives.

Ultimately, management at for-profit companies are stewards of others’ capital. Browbeating the financial practices of industry alienates firms large and small. Let’s work instead to change some of the incentive structures in the defense market. Addressing these will help foster the innovation and investment we need in our industrial base as well as reducing stock buybacks along the way. And it is ultimately that vibrant public-private partnership we need to confront today’s daunting national security challenges.

Jerry McGinn is the executive director of the Greg and Camille Baroni Center for Government Contracting at George Mason University and a former senior U.S. Defense Department acquisition official. Mikhail Grinberg is a partner at Renaissance Strategic Advisors and a member of the center’s advisory board. Lloyd Everhart is a research manager at the center.

U.S.-based Saildrone and Thales Australia, a division of France-based Thales Group, on April 8 said they would outfit the former’s Surveyor unmanned surface vessels with the latter’s BlueSentry towed arrays capable of detecting and classifying crafts on or below the waves.

The announcement coincided with the start of the Navy League’s Sea-Air-Space conference here.

The Department of Defense has long sought an unmanned or autonomous ability to surveil stealthy submersibles; DARPA, for example, more than a decade ago launched the Anti-Submarine Continuous Trail Unmanned Vessel effort. Navy leadership has since advocated for a hybrid fleet, with sailors and Marines augmented by smart machines and the equipment they carry.

Defense News last year reported the Navy pictured its manned-unmanned fleet maturing in three phases: prototyping and experimenting from fiscal 2024 to 2028; buying and using in fiscal 2029 through 2033; and becoming fully operational in the years thereafter.

Epirus directed energy to face off against vessels in US Navy testing

Troy Stephen, vice president of underwater systems at Thales Australia and New Zealand, in a statement said the Surveyor “offers a unique capability within the field of USVs,” adding that his team looks forward to contributing to its “impressive maritime domain awareness” capabilities. Maritime domain awareness provides a deep understanding of the potential repercussions of what’s happening on, below or near the water.

“Thales Australia has a proud history of exporting specialized sonar and acoustic products in support of one of our closest allies, the United States,” Stephen said. “Over two decades, these products have spanned the fields of seismic survey to mine warfare and, more recently, surface ship anti-submarine warfare.”

A Surveyor USV weighs 15 tons and stretches 65 feet. It sports an aluminum hull and keel manufactured by Austal USA.

Chief of Naval Operations Adm. Lisa Franchetti and Assistant Commandant of the Marine Corps Gen. Christopher Mahoney viewed Surveyor construction last month during shipbuilding tours along the Gulf Coast.

“Using unmanned assets helps put more players on the field by freeing up manned assets for more specific and important tasks,” Franchetti said in a statement at the time. “It’s good to see high tech industry partnering with the traditional shipbuilding industrial base to rapidly deliver cutting-edge products at scale.”

Under the deal, part of the Naval Energetics Systems and Technologies program, the Denver-based firm will develop a new design for the Navy’s Mk 104 rocket motor and use its tailored additive manufacturing approach to build a prototype.

Albuquerque-based X-Bow Systems also received a contract, according to a source familiar with the deal. Reuters reported that Aerojet Rocketdyne — the program’s incumbent rocket motor producer — was also awarded a contract.

The Mk 104 supports the Navy’s line of Standard Missiles, which provide a range of surface-to-air defense, ballistic missile defense, and anti-air, land and sea capabilities. Notably, the SM-6 can intercept hypersonic weapons, which fly and maneuver at or above Mach 5 speeds.

“While the Mk 104 is a high-performance motor, legacy models are challenging to manufacture,” Ursa Major said in an April 8 statement. “Using the company’s cutting-edge Lynx production process for SRMs, Ursa Major will leverage additive manufacturing to design a high-performing motor built for manufacturability and reliability.”

The company declined to provide the exact value of the contract, but told C4ISRNET it is worth “single digit millions.”

Ursa Major unveiled its Lynx additive manufacturing approach last November. The process uses tools like 3D printing to quickly build solid rocket motor cases as well as subcomponents for other systems.

Solid rocket motors, or SRMs, are in high demand, but production is limited to a handful of suppliers. Ursa Major wants to help revive that industrial base through its streamlined, rapid production process.

CEO Joe Laurienti told reporters during a briefing last month the company’s production line is “very active,” adding that it builds at least one solid rocket motor a day. The firm is upping its investment in manufacturing infrastructure to hopefully increase that production rate.

Asked about the trend of larger defense primes buying SRM producers in order to shore up supply, Laurienti said he doesn’t think further consolidation is the answer to meeting market demand.

“If every prime and incumbent and new entrant were providing solid rocket motors today, we would not fill the gaps the U.S. has,” he said. “A lot of it is in part due to the inflexibility of manufacturing solid rocket motors. Building a Javelin is extremely different than building a [Precision Strike Missile], which is extremely different than building a [Guided Multiple Launch Rocket Systems]. Our mission is to make those much more similar and common on the manufacturing side.”

Editor’s note: This story has been updated with additional contract information.

In at least one case, an Australian company has even opened up a location inside the gates of a U.S. Army arsenal.

Indeed, Australian defense executives say the AUKUS agreement not only offers the opportunity to expand into the world’s largest defense market, but also a chance to transfer those benefits back to a growing Australian defense industry ready to help if a large-scale conflict breaks out in the Indo-Pacific region.

“All of a sudden America and Australia’s industrial bases naturally just need to be linked,” Rob Nioa, chief executive of Australian munitions company Nioa Group, told Defense News. “Where we ultimately want to be is a company operating in the U.S. munitions base with forward-deployed, production-ready capabilities in the Indo-Pacific region.”

The AUKUS collaboration, unveiled in September 2021, is organized into two pillars of effort. The first focuses on nuclear-powered submarines; the second covers critical technologies like artificial intelligence, quantum computing, hypersonics and autonomy.

Already, Australia has received $1.6 billion in U.S. defense contracts within the context of AUKUS, and Australia is “significantly investing in the United States to support the delivery of these contracts,” Paul Myler, deputy head of mission at the Australian Embassy in the U.S., said during an April 5 Center for Strategic and International Studies event.

The AUKUS pact “is not about making it easier for Australia to buy U.S. kit,” he added. “If we only look at it through a purchase-sale transaction lens, we have failed. This is a radical reimagination.”

But barriers to working together remain, Cynthia Cook, CSIS’ Defense-Industrial Initiatives Group director, told Defense News.

“Some of these relate to challenges that all companies have when marketing to the government, which is getting insight into government requirements and matching their products to a government demand,” she said. “Companies in partner nations can have challenges seeing tenders. And there is the simple challenge of the ‘tyranny of distance’ and the different time zones.”

Building a U.S. footprint

Nioa’s father founded Nioa Group in 1973 out of the back of a gas station in Queensland as a regional sporting firearms shop.

Over the years, the company expanded its customers to law enforcement and defense and its focus to munitions production. The company today provides all of the Australian Army’s artillery ammunition.

Nioa Group also has a business in New Zealand and a joint venture with Germany’s Rheinmetall called Rheinmetall Nioa Munitions, which recently established a munitions shell forging factory in Australia to supply the German military.

Roughly a year ago, the company established the Australian Missile Corp. under a contract with the Australian government to develop a domestic guided weapons enterprise.

Nioa Group has partnerships with some U.S. companies like Northrop Grumman and, in 2023, it purchased Murfreesboro, Tennessee-based Barrett Firearms, which produces the only shoulder-fired 50-caliber gun, the primary anti-personnel sniper rifle used by the U.S. Army and Special Operations Command.

Now, Nioa Group has signed a long-term lease at Picatinny Arsenal, New Jersey, home to the U.S. military’s guns and ammunition development, making it the first foreign company with a footprint on Picatinny’s property. The company took up its tenancy in late November 2023 to collaborate on a variety of armaments supply needs.

“We have existing work that would see us wanting to be inside the wire working with them,” Nioa said.

And Nioa will have the chance to work more with other U.S. companies based there, including Northrop, General Dynamics, Winchester and BAE Systems. Nioa recently named Dan Olson, formerly Northrop Grumman’s weapons systems division vice president, a Nioa advisory board member focused on developing its U.S. strategy.

“Aspirationally, we want to grow in the U.S. market,” Nioa said. “What we now need to do is develop an ammunition footprint in the U.S., and that path is not 100% clear to us, but it will likely come out of us understanding the supply chain constraints in the U.S. and where the U.S. government needs more production for the allied effort.”

Nioa Group is interested in acquiring companies already in the supply chain, he added, and will seek to work with or acquire components that would be needed in Australia as well, Nioa said, which could lead to easier co-production.

While AUKUS is making it easier to establish direct relationships with the U.S. government and partner more deeply with U.S. industry, he said, it’s still too early to see technology being transferred.

“People are a little nervous that actually when it comes time for transferring missile technology or something that despite it being agreed to at a policy level, actually the documents and authorities which will allow the physical transfer, they think is still going to be entrenched,” he said. “There’s a lot of inertia around existing systems.”

Another Australian company is taking a similar approach in the U.S., seeking to expand the technology development work it is doing in Australia in the U.S. and with U.S. partners.

EOS Defence Systems opted to establish a production footprint in Huntsville, Alabama, in 2018 “in response to an ever-increasing U.S. military requirement for [remote weapon station] systems,” according to a company announcement at the time.

The company is perhaps best known for its common remote weapons stations and previously supplied some to the U.S. military in the 1980s. It lost the latest contract to Norwegian company Kongsberg, according to EOS chief executive Andreas Schwer, but the company has three other business sectors it hopes to grow in the U.S.

EOS has been working on lower kilowatt directed energy solutions that could be considered for integration on smaller systems like armored vehicles. He said the company is close to signing two contracts for lasers with international customers and then plans to migrate that technology to the U.S.

EOS also has developed over the last 20 years a ground-based laser that can blind satellites. The company is now developing capability to also disable satellites’ sensors and ultimately the satellite itself. “We see huge export potential,” he said.

AUKUS is allowing conversations and collaboration that would have been very difficult beforehand and giving the company the ability to participate in classified programs, Schwer said.

“AUKUS will make our life easier in terms of exchange of product data or product information, software codes, but also even the hardware to push back and forth, demonstrators, prototypes and stuff like that,” Schwer said. “We have more commercial reason to do more in the U.S.”

Like Nioa Group, EOS already has some partnerships with U.S. companies like Northrop Grumman, but the company is also looking for acquisition opportunities and partnerships, Schwer said.

“We are ready to bring laser technology to the U.S. or our satellite terminals, maybe even under another brand name,” he suggested. “We are currently checking all opportunities before we undertake a formal decision.”

Small business breakthrough

Smaller and newer Australian companies are also evaluating opportunities in the U.S.

3ME Technologies, an Australian company specializing in electrification, is now making a more global push, but hopes to focus on the AUKUS countries, according to chief executive Justin Bain.

The company has converted the Australian Defence Force’s Bushmaster vehicle into a hybrid-electric variant and has worked on projects delivering the battery system and power solutions for counter-drone and directed energy systems. The company particularly specializes in battery safety, critical both in the mining industry and the defense industry, Bain said.

3ME has now begun preliminary discussions with a number of U.S. prime contractors, which could help it grow in the U.S. The firm plans to make its U.S. trade show debut at Sea Air Space this month.

Enabling 3ME’s conversations with U.S. primes is an Australian government program called Going Global, which assists companies that want to link up with U.S. defense prime contractors.

Bain said he sees a strong role for the company potentially establishing a robust high-end battery and electrification supply chain in the Indo-Pacific as the U.S. considers logistics operations in a contested environment in the priority theater.

“The key theme we’re getting out of the U.S. is we need to shore up supply chain in INDOPACOM. We need more support in INDOPACOM. It’s the fact that we exist, we’re here in Australia with the experience and that’s why we want to focus in this area,” Bain said.

Ellen Lord, who served as the Pentagon’s acquisition chief during the Trump administration, said during the CSIS event in April, that working with small Australian companies “is where the real challenge is.”

“What we’re missing is the engagement strategy to bring all these small companies together to understand the art of the possible, to have the contracting officers know what to do with it, because we don’t always do a great job in the Department of Defense in terms of motivating and incentivizing individuals to lean forward and do something differently,” she said.

Hugh Jeffrey, the Australian Department of Defence’s deputy secretary of strategy, policy, and industry, said during a March 5 CSIS event in Canberra, Australia there’s a long history of trying to link the Australian and U.S. defense-industrial bases.

There has been “only limited success,” Jeffrey said, but said he’s optimistic this time will be different.

Already, he noted, the U.S. Congress made significant export control reforms in the fiscal 2024 National Defense Authorization Act, which will enable faster sharing of defense industrial resources with Australia and the U.K. and “most crucially” establish a national exemption for AUKUS countries from some U.S. export control licensing requirements. The U.S. State Department still needs to grant the exemption, contingent on Australia and Britain enhancing their own export control laws.

“My view is that the consensus has emerged on both sides of the Pacific on this issue, that we do need to change things up and that’s why it’s so exciting to see the US and Australia commit to a generational shift in mindset around industrial base integration,” he said.

The company’s Leonidas technology, which pumps out waves of energy capable of frying electronics, will be used in the 2024 Advanced Naval Technology Exercise-Coastal Trident, or ANTX-CT24, according to an April 4 announcement. The trials will examine how high-power microwaves can disable outboard motors, among other applications.

Navy leaders have lamented a lack of directed-energy options aboard warships as Houthi rebels in Yemen pepper the Red Sea and Gulf of Aden with attack drones and Ukrainian forces sink Russian ships with unmanned surface vessels. While the Department of Defense has invested in the nontraditional armaments for decades, few projects have been developed and widely deployed.

The Army in 2022 inked a $66 million deal with Epirus to supply Leonidas in advancement of its Indirect Fire Protection Capability venture, which aims to protect sites from drones, rockets, artillery, mortars and missiles. The company delivered an initial prototype in 2023, Defense News reported.

Chief executive Andy Lowery in a statement said his team was excited to participate in ANTX-CT24 and “demonstrate the effectiveness of long-pulse HPM technology in another threat environment.”

Attack drones at heart of ‘military partnership’ between Russia, Iran

“Epirus can defend against a wide range of threats across domains,” Lowery said. “Our expanded collaboration with the Department of Defense also underscores the growing recognition of the benefits of working with innovative tech companies outside of the traditional defense ecosystem.”

At least 31 directed-energy initiatives are underway across the military, according to a study published by a defense industry advocacy group. Nine — including the Optical Dazzling Interdictor Navy and the High Energy Laser Counter-Anti-Ship Cruise Missile Program — can be traced back to the Navy and Marine Corps.

The ANTX-CT series serves as a test bed for promising technologies and promotes collaboration among industry, academia and the military. High-power microwave equipment has made an appearance before, according to Brendan Applegate, the lead for fleet experimentation and exercises.

“ANTX-CT24 will feature technical demonstrations and experiments across a wide variety of technology areas, including unmanned systems countermeasures,” he said in a statement.

The move comes after increasing collaboration between the two companies. In August 2023, the two artificial intelligence firms announced the joint development of a ViDAR-enabled wide area motion imagery payload called Sentient Observer, which the companies expect to fly this year.

Sentient’s ViDAR is an artificial intelligence-powered electro-optic/infrared sensor that can detect and classify targets within the imagery it collects.

Sentient told Defense News the following month the company was working to integrate its ViDAR with Shield AI’s Hivemind autonomy package for better performance.

“The DOD has asked for an all-seeing eye over tens of thousands of square miles, 24/7, without the need for GPS or communication links. For Shield AI, Sentient Observer is the final piece of that puzzle,” Shield AI president and cofounder Brandon Tseng said in the companies’ announcement.

“The DOD can begin augmenting and replacing their legacy solutions for a distributed, low cost, low risk solution that doesn’t break the bank if an aircraft is shot down,” he added, noting the two companies could pair Sentient’s ViDAR with Shield AI’s Hivemind AI pilot to enable a fleet of unmanned aircraft to collaboratively patrol an area.

Though both ViDAR and Hivemind are platform-agnostic, Shield AI acquired the V-BAT group 3 unmanned aerial vehicle in 2021 and plans to apply the ViDAR and Hivemind combo on this vertical-takeoff drone, the statement noted.

“What stood out to us about Shield AI is that they are the only company in the world with an operational AI pilot, and therefore have the technological expertise and maturity to really deliver on the AI technology workstream underlined in AUKUS Pillar 2,” Sentient CEO Mark Palmer said in the statement, referring to the Australia-United Kingdom-United States nuclear-powered submarine collaboration, whose Pillar 2 is focused on cutting edge technologies.

Under AUKUS Pillar 2, traditional barriers to tech-sharing between these three nations are being reduced such that the three can co-develop or sell autonomy, unmanned, quantum computing, hypersonic and other in-demand technologies to support operations in the Indo-Pacific region.

The companies did not disclose the value of the acquisition when asked by Defense News.

Jennifer Parker, a naval analyst at the National Security College within the Australian National University, told Defense News: “If you think about what Australia is trying to achieve with its continuous shipbuilding, think about the fact that a lack of Australian ownership is not a barrier for being a sovereign defense industrial base, then I think there’s a lot of opportunity.”

Yet one obstacle to a takeover is regulatory approval from authorities like Australia’s Foreign Investment Review Board (FIRB). In an April 2 press release, Austal said it was “not satisfied that these mandatory approvals would be secured.”

Hanwha Executive Vice President David Kim responded: “There is no foundation of the claim that the FIRB would reject Hanwha’s acquisition of the company.” The South Korean company has previously obtained the board’s approval for investments in Australian armored vehicles.

Domestic opportunities certainly abound. Australia’s recent surface combatant fleet review recommended three general-purpose frigates be built overseas and eight in Western Australia. Korea’s FFX-III frigate, which Hanwha Ocean is helping build, is one of four shortlisted designs.

Hanwha’s acquisition of Austal would increase the chances of swaying the competition in favor of that ship design, Parker noted.

Furthermore, announced last November, Austal has a pilot agreement with Australia’s Department of Defence to act as strategic partner in Western Australia. Already, Austal has landing craft and patrol boats in its order book.

Parker highlighted the Korean conglomerate’s desire for a Five Eyes foothold, a reference to the intelligence-sharing club of New Zealand, Australia, Canada, Britain and the United States. “I think that for Hanwha, who wants to get into the Five Eyes market, it sees that the industrial capacity of the U.S., Australia, New Zealand, Canada to build the ships they want is just not there.”

The prize of Austal USA, a supplier of U.S. Navy vessels, presumably enters Hanwha’s calculus, even if this subsidiary has relative autonomy from Austal Australia.

American shipbuilders might be reluctant about a Korean competitor appearing, but Parker wondered whether the U.S. should not be leaning more on South Korea for assistance in producing ships. “We know the U.S. industrial base is struggling to produce ships and submarines … so there’s opportunity there,” she argued.

Parker highlighted different ideas over what “sovereign” actually means when it comes to serving the Australian market. According to the government’s “Defence Industry Development Strategy,” released in February, Australian ownership is not critical to sovereignty. Apart from the public optics of a 36-year-old Australian company being sold, Parker said, “I can’t right now see any significant disadvantage to it.”

Additionally, it could signal to China that Australia is serious about relations with regional partners.

Leaving the door ajar, Austal said it “is open to further engagement if Hanwha is able to provide certainty on whether a transaction would be approved.”

The two companies will jointly build the boats under the deal, inked March 28.

The Indonesian Navy’s future submarines are described as Scorpene Evolved Full LiB submarines featuring lithium-ion batteries, according to Naval Group’s news release. Indonesia’s Scorpenes are to be the first to use such battery technology.

The French shipbuilder stated the lithium-ion technology allows for more efficient energy, a decreased snorkeling rate and a reduced charging time.

The boats will be “built in Indonesia in a PT PAL shipyard, through transfer of technology from Naval Group,” per a joint news release.

Their assembly in Surabaya follows an August 2021 defense cooperation agreement between Paris and Jakarta as well as a memorandum of understanding for two Scorpenes signed by the two shipbuilders in February 2022.

“This step is a high commitment and trust of the Indonesian government in the capability of local engineers to advancing defense technology, especially submarine technology,” according to Kaharuddin Djenod, the president director of PT PAL. “In the future, Indonesia is expected to be able to master submarine technology.”

Germany and South Korea were also vying for this contract. This latest deal confirms Indonesia has abandoned a 2019 agreement to buy a second trio of Nagapasa-class submarines from South Korea.

Collin Koh, a senior fellow at the Institute of Defence and Strategic Studies with Singapore’s S. Rajaratnam School of International Studies, told Defense News it’s interesting Indonesia didn’t choose Korean submarines, given PT PAL gained experience assembling the Nagapasa class and that the type would have ensured commonality in the fleet. However, it’s likely France likely offered the best package and offsets, Koh said.

“I believe Indonesia probably saw benefits from the tech transfer that could enrich the local submarine industry going forward because ultimately Indonesia wants to build its own submarines,” he said, noting the French firm was “way more aggressive in marketing their wares.”

Under the Korean program that saw three Nagapasa-class submarines commissioned from 2017 to 2021, “PT PAL was able to master at least a rather reasonable local capability,” Koh said. However, this French project “will allow it to absorb and grow” other technologies.

PT PAL has already prepared for local construction. In February 2022, it issued a tender for development and construction of a ship lift and transfer system capable of moving 2,000-ton submarines.

“PT PAL is one of the most experienced shipyards in ASEAN with unique skills and capabilities for large ships and submarine construction,” a Naval Group spokesperson told Defense News. “PT PAL has invested in some infrastructure and tools dedicated to submarine construction, and these investments can be fully reused for construction of the Scorpene submarine.”

The companies did not divulge the value of the latest contract nor the delivery schedule, but Indonesia’s Ministry of Finance approved a request for $2.16 billion in foreign loans for two submarines last year.

Crewed by 31 personnel, the 72-meter-long (233-foot-long) platforms have six launch tubes and carry 18 torpedoes or missiles. Depending on exact configurations, the type displaces 1,600-2,000 tons, can remain submerged for at least 12 days, and can operate on missions lasting 80 days.

Should construction commence next year, the first boat could join service in 2033, based on the comparative build rate of India’s Scorpene program.

The Indonesian Navy is seeking 12 submarines in total.

This story was updated April 11, 2024, at 9:28 a.m. ET with comment from Naval Group.

The company announced the deal April 3 without providing details about contract length. A spokesperson declined to say how much the agreement is worth.

Robotic combat vehicles are unmanned systems envisioned to work alongside soldiers, schlepping supplies or surveilling adversaries with sophisticated sensors. The RCVs are also part of a larger Army overhaul dubbed Next Generation Combat Vehicle, which includes the XM30 Mechanized Infantry Combat Vehicle, formerly the Optionally Manned Fighting Vehicle.

Anduril’s digital effort will enable RCV variants to navigate terrain, swap and adopt government-owned and third-party autonomy stacks, and allow remote management of a vehicle’s equipment, according to its announcement.

“Integrating disparate hardware and software is a critical step in the development and validation of any autonomous system,” Zach Mears, an Anduril senior vice president, said in a statement.

Anduril attack drone deemed ‘accurate and effective’ in Dugway trials

The Army in September tapped General Dynamics Land Systems, McQ, Oshkosh Defense and Textron Systems to build RCV prototypes, marking the start of a competition. The service later said it would no longer seek separate light, medium and heavy models, instead pivoting to a single sized platform that could tote specialty equipment such as smokescreen dispensers and electronic warfare tools.

“As the Army evaluates potential payloads, software modules, and autonomy stacks for the RCV program, developing a robust and flexible integration framework will prove critical to the program’s success,” Mears said.

The RCV endeavor is one of growing importance, as Army leadership pushes man-and-machine collaboration.

The service’s fiscal 2025 budget request included millions of dollars for human-machine integrated formations, or H-MIF. Robots and other machinery programmed to execute a machine, or with control beamed in from afar, could significantly reduce risk to humans, potentially reducing casualties.

“We have assessed over the course of the last couple of months that Russia has almost completely reconstituted militarily,” said Deputy Secretary of State Kurt Campbell at an event hosted by the Center for a New American Security.

Campbell’s assessment seems to contradict those of the Pentagon and America’s allies in Europe.

At a meeting of countries that support Ukraine late last month, Secretary of Defense Lloyd Austin said that Russia had suffered more than 315,000 casualties during the war. With a drop in American aid, leading to ammunition shortages on Ukraine’s front lines, Russian forces have advanced. But those too have been costly, the Pentagon has said.

In an interview earlier this year, the chair of Lithuania’s national security committee estimated it would take Russia between five and seven years to reconstitute its forces for a full-scale war.

Still Moscow has surged defense spending since 2022 — up to 6% of national GDP in its 2024 budget. The rise is part of a larger effort by the Kremlin to move its economy, and in particular its defense industry, onto a wartime footing.

Part of its success comes from China’s support, along with that from North Korea and Iran. Both Campbell and another senior administration official, speaking with reporters this week on the condition of anonymity, said that China has helped its partner endure economic and military setbacks in the last two years.

“We’ve really seen the [People’s Republic of China] start to help to rebuild Russia’s defense industrial base, essentially backfilling the trade from European partners” that lapsed when Russia invaded, the official said.

President Joe Biden addressed this concern in a call with Chinese leader Xi Jinping Tuesday, according to a White House readout.

Moscow’s success has added pressure to the government in Kyiv, which this week lowered the draft age from 27 to 25 amid losses on the front lines. Ukraine is still hoping for a giant infusion of American aid still held up in Congress. House Speaker Mike Johnson has so far refused to call that national security supplemental for a vote, though he recently signaled one could come under certain conditions.

Without it, Ukraine’s armed forces will continue needing to ration ammunition and air defense on the front lines and around the country. Still, that doesn’t mean the front lines are verging on collapse, said Chairman of the Joint Chiefs of Staff CQ Brown.

“Does it make it more complicated, more challenging for the Ukrainians without the supplemental — yes,” said Brown at an event hosted last week by the Defense Writers Group. “But they’ve been able to defend fairly well.”

The takeover, announced last year as valued at €675 million (U.S. $726 million), took effect April 2 following approval by regulatory authorities here.

“The acquisition adds strong design and system integration capabilities to Hensoldt’s product and solutions business and creates a national champion in defence electronics,” Hensoldt said in a statement.

Hensoldt is a key player in the trinational Future Combat Air System program of Germany, France and Spain, on which the company has worked with ESG in a national consortium to develop the envisioned weapon’s networked sensors and weapons.

American firm Lockheed Martin picked ESG last year to provide logistics support for Germany’s future F-35 fleet of 35 jets. ESG is on tap for similar work for the Boeing-built P-8 Poseidon maritime-surveillance and submarine-hunting aircraft, of which Germany has ordered eight.

According to a Hensoldt statement, ESG employs about 1,400 people in Germany, the Netherlands and the United States, and it generated sales of about €330 million in 2023.

Hensoldt placed 51st in the most recent Defense News Top 100 list, which ranks global defense companies by defense-related revenue. The firm reported a defense revenue of $1.8 billion in 2022.

Avibras was in debt for 376 million (U.S. $75 million) reals as of April 2023, according to the metalworkers union representing São José dos Campos — where the company has its headquarters — and the surrounding region.

According to Avibras’ April 1 statement, the companies are in “advanced talks to facilitate a potential investment aimed at the economic and financial recovery of Avibras, in order to keep its manufacturing units in Brazil, resume operations as soon as possible, and maintain the supply stipulated in contracts with the Brazilian government and other clients.”

Avibras did not disclose the value of the potential sale.

Of the company’s previously reported debt, the union said 14.5 million reals is related to labor. The union noted salaries were delayed by 10 months, which drove protests by workers in February 2024.

However, Avibras is actively seeking international contracts, having competed, for example, in the Spanish defense program SILAM, in partnership with the Spain-based company New Technologies Global Systems in October 2023.

Last month, the company signed a memorandum of understanding with the Czech company Excalibur International, focusing on jointly developing and manufacturing defense equipment.

A Brazilian company that discussed the potential sale with Defense News on the condition of anonymity due to the sensitivity of the topic said the announcement “has set off a red alert for the defense sector and is a serious risk to Brazil’s sovereignty” because it could lead to the transfer of an “important national technological legacy built over decades” to a foreign entity.

For its part, the Brazilian government has expressed concern about Avibras’ future.

“The government’s biggest concern is the company shutting down,” Carlos Zarattini, the vice chief of the Chamber of Deputies who would participate in the acquisition negotiations, told local media.

Losses for some other self-propelled or towed systems in Ukraine’s war with Russia amount to nearly 30%, the company said in a statement to Defense News, without providing specifics.

The French-built Caesar is the world’s lightest 155mmm self-propelled gun at 18 metric tons, according to Nexter. The howitzer can fire six shells within a minute before packing up and moving away, an artillery tactic known as shoot-and-scoot, and evolving battlefield threats mean that mobility is the Caesar system’s best protection rather than the cannon’s range, Nexter said.

“Use of drones and loitering munitions has become a real threat 40 kilometers (25 miles) from the front, where the Caesar operates,” Nexter said in the statement. “Its light weight and ability to leave its position in less than a minute to avoid counter-battery fire are therefore major assets.”

Ukraine has received 55 of the truck-mounted systems, with 36 supplied by France, including six purchased this year, and another 19 donated by Denmark. Besides the French cannon, Ukraine operates 155mm artillery systems including the towed American M777 and self-propelled systems such as the German Panzerhaubitze 2000, the Polish Krab and Sweden’s Archer.

U.S. Secretary of State Antony Blinken and French Armed Forces Minister Sébastien Lecornu visited the Nexter site in Versailles outside Paris on Tuesday to discuss the French-U.S.-led coalition to supply artillery and ammunition to Ukraine.

France, Denmark and Ukraine have agreed on financing the purchase of 78 Caesar systems for Ukraine in 2024 as part of the coalition, Lecornu said last week. That includes the six already delivered this year.

Nexter has increased monthly Caesar production to six from two before the war, and the target “in the time to come” is 12 cannons per month, Lecornu said in a press conference following the visit. The target is to reach the new capacity within a year, and Nexter has already made investments to boost the output of the system’s components, the company said.

“For the time being, all Caesar production is earmarked for Ukraine and for replenishing stocks of the French Army, which may decide to make further divestments to Ukraine,” Nexter said.

France in December ordered 109 new-generation howitzers from Nexter for about €350 million, with first delivery expected in 2026. The updated cannon will have an armored cabin to protect against mines and small-caliber arms, based on the feedback from French deployments in Afghanistan and Africa’s Sahel region.

The Caesar MkII will get a new 460 HP engine more than double as powerful as the previous 215 HP one, a new six-wheel chassis from military-vehicle maker Arquus, and updated fire control software. The howitzer will keep its 155mm cannon, with a range of more than 40 kilometers, and will remain air-transportable, according to France’s armaments directorate.

After a Ukrainian advantage in artillery fire in the summer of 2023, Russia gained the upper hand, and Lecornu said in January the shell ratio was nearly one-to-six in favor of Russia. Artillery has been the greatest killer in the war in Ukraine, accounting for more than 70% of casualties.

Ukraine’s artillery deficit contributed to recent setbacks on the frontline, including the withdrawal from the city of Avdiivka in the Donetsk region in February. A stronger artillery capability is one of Ukraine’s key needs to win the war, Defense Minister Rustem Umerov said in January.