Brazil's Global Player

LONDON - Take a regional flight from an airport in the U.S., Europe or Asia and there's a good chance you will be flying on a jet developed and built by Embraer.
In little more than a decade, the Brazilian company has grown from a state-owned aerospace also-ran into a privatized global player in the regional and business jet markets.
Now Embraer is turning its attention to defense and security. It has high hopes for growth in the business unit it created last year to pursue its ambitions in the sector, Luiz Carlos Aguiar, the first president of the new Embraer Defense and Security operation, said at the recent Latin American Aerospace and Defense (LAAD) show in Rio de Janeiro.
"By the end of the decade, we want to grow business in the sector to represent 20 percent of total Embraer revenues, taking into account our other businesses are going to also grow," Aguiar said.
In 2010, defense accounted for revenues of $670 million, 12.5 percent of the company's $5.5 billion in annual sales.
On top of sales, Embraer reckons its aviation support services business last year earned military revenues of $150 million. Much of that came in Embraer's traditional military markets involving the Super Tucano trainer and light attack aircraft and various adaptations of civil jet airliners into specialist platforms for airborne early warning and other tasks.
The company also is heavily involved in modernizing Brazilian military aircraft, including A-4 fighter jets for the Navy and AMX and F-5 fighters for the Air Force.
Still, company officials said, the traditional airframe business will continue to provide the core of Embraer's defense and security business for the foreseeable future.
The company is developing the KC-390, a jet-powered rival to Lockheed Martin's C-130 Hercules airlifter, and will also assemble a new fighter jet if the Brazilian government ever gets around to picking a winner.
The KC-390 is being built for the Brazilian and other air forces; first flight is scheduled for 2014.
The company also is expecting a decision from the U.S. Air Force (USAF), which is choosing between the Super Tucano and Hawker Beechcraft's AT-6 for a light attack requirement.
That could mark Embraer's long-sought foothold in the U.S. defense market. Company officials thought they had one when the U.S. ordered the ERJ-145 in 2006 as a surveillance aircraft, but that deal was canceled through no fault of the Brazilian company.
Now its U.S. priority is the light attack requirement.
"It's very important to win this campaign," Aguiar said. "We did a great job in the U.S. when we demonstrated our capability, and it's very well rated by the USAF. Better relations following [U.S. President] Barack Obama's visit here will help the process a lot."
If it wins, Embraer has a deal with contractor Sierra Nevada, an aerospace company based in Sparks, Nev., to build the aircraft.
Embraer also is transforming more generally under the government's 2008 national defense strategy to bolster local industries.
The first four months of operation at Embraer Defense and Security has seen the business already signal the intended direction of travel with moves to acquire radar, unmanned air systems and C4I and systems integration capabilities.
Much of that change became evident at the LAAD show, where in the space of two days, Aguiar announced the he had struck a deal with Elbit Systems' local subsidiary AEL Sistemas to jointly develop tactical UAVs, and then acquired 50 percent of local systems integration and C4I provider Atech Negocious em Tecnologias.
Part of the deal with Elbit, an Israeli company, involves Embraer becoming a minority stakeholder in AEL itself.
A few weeks earlier, Aguiar, who had previously been Embraer's chief financial officer, made the new business unit's first acquisition when it took a 64.7 percent stake in the radar division of Orbisat.
The UAVs, radar and particularly Atech's capabilities all reinforce a key Embraer objective to secure the lead position on a pair of massive Brazilian land border and maritime surveillance programs.
Together worth around $10 billion, the first of those programs could kick off next year and run for the next decade.
Uncertainties There are some uncertainties about the timing of these and other defense programs with the new government of Brazilian President Dilma Rousseff reviewing major requirements here, including the long-running scrap between Boeing, Dassault Aviation and Saab for the fighter deal.
This year's defense budget has taken a big hit, and although the cut is said not to be directed at programs, executives at LAAD were nervous about the collateral damage the cutback could cause.
Rebecca Barrett, Forecast International's Latin American military markets analyst, said that Brazil needs to protect its strategic interests.
"This should be reflected in the defense budget and government's spending pattern during the Rousseff administration," Barrett said. "In that regard, programs that will be used for surveillance and the protection of Brazil's borders and off-shore oil assets will be top priority."
The analyst said the Brazilian defense budget for next year is set at 60.2 billion real ($38.4 billion). Forecast International says that figure will rise moderately to 64 billion real by 2015.
Aguiar told reporters at LAAD that, for the short term at least, Embraer's main focus would be on building the business at home rather than buying foreign assets.
"Acquisition has not traditionally been how Embraer has grown," Aguiar said. "Acquisition in country is a good way of learning as it is easier to do something close to us. We have a small team looking [at M&A opportunities], and not only in Brazil, but there is nothing in the short term."

Embraer

Headquarters: São Paulo, Brazil
Employees: 17,000
2010 revenue: $5.5 billion total; $670 million in defense revenue, including $150 million from military aviation support services.

Team Players Sensors, Data Links Will Tie Latest Apache into Net, Data Links Will Tie Latest Apache into Net

The U.S. Army is set to field the fastest, most maneuverable AH-64D Apache Longbows in its history, but it might be the sensors inside the attack helicopter's black boxes that end up defining it.
Pilots will have a window into each perspective on the battlefield - from the soldiers on the ground, the unmanned aerial systems (UAS) flying nearby, or a Kiowa scout helicopter already on station. It is part of the larger Manned Unmanned Teaming Level 2 project the Army is pursuing to integrate the influx of sensors populating Army aircraft underbellies.
Block III Apaches feature performance upgrades to help the aircraft fly and hover in mountainous terrains found in Afghanistan, and improve maneuverability bled off the aircraft by adding weight to the D-model Longbows.
Engineers added a 701D engine, composite rotor blades and an Improved Drive System of the 21st Century Face Gear Transmission, which provides the aircraft more power. These upgrades will give pilots 6K/95 hover performance: the helicopter can hover at 6,000 feet even when the temperature hits 95 degrees Fahrenheit.
What some in the aviation community find more exciting are the upgraded antennas and computing power added to the Block III. Feeds from UAS and nearby helicopters will be fed into the Apache's digital cockpit. Apache pilots can also record feeds and send them to other Apache, Kiowa and UAS pilots as well as troops with the One System Remote Video Terminal.
The first Block III Apache will roll off Boeing's production line in October, said Col. Shane Openshaw, the Apache program's project manager. Five combat aviation brigades - the 1st, 10th, 101st, 3rd and 229th - will fly Block IIIs by 2013.
The first Block III Apaches will be sent to the 101st Combat Aviation Brigade. The addition of the Block III will allow the service to retire the A model by 2013.
The 101st will become the first full-spectrum combat aviation brigade in the Army, adding a Grey Eagle UAS company and two Shadow platoons. Incorporating the Block III Apaches will help fast-track that process, Openshaw said.
"The 101st will effectively be writing all the tactics, techniques and procedures to be utilized through the system. We've learned a lot through VUIT-2, but this has even more capability," said Lt. Col. John Vannoy, product manager for Apache Sensor Systems.
VUIT stands for video from unmanned aircraft systems for interoperability teaming.
Aviation leaders want soldiers on the ground to walk Apache pilots onto targets, as both look at the same video that is broadcast from an RQ-7B Shadow UAV. And if the Apache is called to a different target, the pilots can send that same video to another Apache or Kiowa, replacing them in the fight.
Security of that data has been an additional concern the past couple years. Block III Apaches will have Tx/Rx encryption that will allow them to protect the signals being sent via the Ku-band digital antennas. Encrypting the data has added to the challenge of making sure everyone is on the same page, said Col. Gregory Gonzalez, head of the Army's UAS Project Office.
"Encryption of all these data links just changes things to an enormous degree, because then you have to make sure all the data links work but make sure you have the right crypto for it," Gonzalez said.
The Apache's new Ku-band antennas have a longer range - 15 versus 12 kilometers - than the VUIT that preceded the newer Apaches. The system also takes half the time to boot up. It took up to five minutes; now pilots can start it in less than three.
Block III Apache's additional computing also comes with a bonus: Its total system weight is 49 pounds lighter than VUIT.
The Army will test the Block III Apaches and how effectively the service has advanced in integrating UAS with manned aircraft this September at Dugway Proving Ground, Utah. Shadows, Grey Eagles, Kiowas and Apaches will fly in the Manned/Unmanned Systems Integration Capability exercise running through different battlefield scenarios with troops on the ground.
"This gives us a chance to show the maturation of the TTPs [tactics, training and procedures] we've developed over the past few years and test out a few new ones to make this work even better," said Tim Owings, Army UAS deputy program manager.
Getting helicopter pilots on board for the manned-unmanned teaming concept and an exercise like this has allowed the Army to turn the corner towards integrating each aviation asset more seamlessly on the battlefield, Gonzalez said.
"The manned aviation community started off not caring about unmanned systems, then they were pretty agnostic about it, now they are not only hopeful but they want what we can provide them," Gonzalez said.

New Wrinkle for Gates' Successor

The job facing the next U.S. defense secretary just became a little more daunting.
In addition to overseeing operations in Iraq, Afghanistan and now Libya, the successor to Defense Secretary Robert Gates will likely walk into the job at the end of the summer just as the Pentagon wraps up a "fundamental" review of its missions and capabilities to help identify $400 billion in savings in security spending over the next 10 years.
If the Defense Department wants the review to influence its 2013 budget submission, it will have to complete it this summer, defense analysts say. This means the next secretary will have to implement a plan in which he or she had little input.
The Pentagon maintains that a schedule for the review has not yet been established.
"It is going to take some time for it to be done thoughtfully and properly," Pentagon spokesman Geoff Morrell told reporters after President Obama's April 13 speech on his deficit reduction plan.
In an April 18 email, Morrell said, "We haven't yet determined who is going to head up this effort and what its mandate will be, let alone how long it will take."
And Gates said during an April 21 press briefing that he has had only one meeting to discuss how to structure the review.
The administration has said that while the review will have no effect on the 2012 budget, it should be completed in time for the 2013 budget submission.
Defense experts said that if the White House truly wants to shape spending choices for 2013, the review needs to be completed before August, when the budget is already largely built by the services.
"If this is really going to influence the FY 13 budget, then they're going to need to finish the review by June or July," said Todd Harrison, a senior fellow for defense budget studies at the Center for Strategic and Budgetary Assessments.
Under this schedule, the review's conclusion would coincide with Gates' departure, which many believe is only a few months away.
"It's a little hard to understand why an outgoing defense secretary would be doing a strategic review for the next several years at this point in his tenure," the Lexington Institute's Loren Thompson said.
It looks as if the new defense secretary will not only pick up the strategic review right away, but will also take over the job just as DoD analyzes the services' multiyear spending plans and crafts its guidance.
"The new defense secretary is going to have a steep learning curve," and that probably means Deputy Defense Secretary William Lynn will end up doing a lot of the heavy lifting, Harrison said. "He would ideally provide a lot of the continuity between Gates and whoever follows him."
To meet Obama's call to cut $400 billion in security spending over 10 years, Gates has said the country will have to accept risk in certain mission areas and capabilities.
Yet the White House and analysts note that the reduction in planned spending means only keeping the defense budget roughly flat in real terms.
Still, there are large parts of the defense budget that are growing much faster than inflation.
During his April 21 press briefing, Gates named two: military health care and fuel costs.
With or without the $400 billion in cuts, these costs will begin to crowd out the Pentagon's investment accounts, which in turn will force the Pentagon to make tougher choices, Harrison said.
QDR As Guide To help make these choices, DoD will turn to the last Quadrennial Defense Review (QDR), released inFebruary 2010, as the jumping-off point for the new review, Gates said April 21.
"It will start, probably, with the QDR and in the terms of the scenarios, and then try to translate that into what are the programmatic implications as you begin to reduce the mission sets," Gates said.
When the QDR was published, it was criticized for not prioritizing future missions and capabilities and making none of the difficult trades the Pentagon is now being asked to consider.
But the Pentagon will have to rely on this previously established baseline, especially if it wants to turn the review around quickly, Thompson said.
Even so, it's not an encouraging sign that the QDR might be used as the framework for the new review, Harrison said. "They may be better off just starting with a clean sheet of paper because what they fundamentally need to get out of this is different than what the QDR produced," Harrison said.
This time around, the Pentagon needs to lay out all of the roles and missions it currently is responsible for or has some role in; prioritize that list; and then start trimming from the bottom, he said.
Gates is overseeing the early stages of the review, but he is also signaling that his departure is near.
Asked if he was worried that the Libyan war would be a stalemate when he left office and if NATO should be doing more, Gates said, "Well, the worry will be my successor's."

'Military Compound' Downed in Tripoli: NATO

BRUSSELS - The building in Tripoli destroyed April 25 by NATO was a "military compound" where "there were various houses and residences, as well as administrative and technical command and control nodes," said Lt. Gen. Charles Bouchard, commander of the NATO military mission in Libya, in a video link to NATO Headquarters on April 26.
The Canadian Air Force general said all targets NATO engages "are legal, authorized targets" and assured reporters that "the intent is to engage command-and-control nodes."

Asked if NATO was hunting Col. Moammar Gadhafi, Bouchard said the mission was "to bring an end to violence against the [Libyan] population. It's about command-and-control nodes, not individuals."
After another question, he said "it was not about regime change."
Of the three core areas of the alliance's mission - the maritime embargo, enforcing a no-fly zone, and protecting civilians and civilian-populated areas - Bouchard indicated the latter was "probably the toughest." The mission's commander expressed concern that pro-Gadhafi forces were shielding themselves with men, women and children. He also reiterated that NATO's mission was to create an environment where dialogue can take place and where Libyans can decide on their own future. He insisted that efforts to bring about peace were not just military but political and diplomatic.
Asked for an update on progress because NATO said about 30 percent of the pro-Gadhafi regime's firepower had been destroyed, Bouchard said, "This is not a number game" and "is not about the number of tanks destroyed" but is "about bringing effects, reducing the capacity and will of pro-Gadhafi forces to engage civilians."
Bouchard hailed pro-Gadhafi troops who had switched to the anti-Gadhafi side, had sought refuge in neighboring countries or had not reported for duty.
He also said NATO was working on stopping the movement of weapons.
Asked about the introduction of U.S. Predator drones, Bouchard said he welcomed any assistance.
"These weapon systems can engage at close quarters and more will follow," he said.

USAF To Hold Separate Contests for 2 Helos

The U.S. Air Force said April 25 that it will hold separate competitions for its Common Vertical Lift Support Platform (CVLSP) and HH-60 recapitalization programs.
The CVLSP program is designed to replace the service's geriatric fleet of Bell UH-1N Huey helicopters, which provide transportation to security forces at nuclear missile bases and help to evacuate lawmakers during emergencies. The HH-60 recapitalization program is the Air Force's effort to replace 112 increasingly decrepit HH-60G Pave Hawk combat search-and-rescue helicopters.

Service officials anticipate that both programs will draw industry bids based on aircraft derived from helicopters in production.
Maj. Gen. Randal D. Fullhart, the Air Force's global reach programs capability director, said that the service anticipates releasing a draft Request for Proposal in the summer, with the final RfP in the fall. The CVLSP fleet will consist of 93 aircraft spread among Air Force Global Strike Command, the Air Force District of Washington and other major commands.
"We're proceeding toward an initial operating capability for common vertical lift support platform program in 2015." Fullhart said.
For the HH-60 replacement program, Fullhart anticipates a request for proposals will be released in 2012. The Air Force did not say how many aircraft it would buy.
Industry welcomed the announcement.
"Sikorsky welcomes a competition to offer the proven H-60M Black Hawk aircraft for both the HH-60 Recap and CVLSP missions," said Tim Healy, Sikorsky's director for Air Force programs.
Healy said that the Air Force would derive significant savings from "Sikorsky's mature H-60M multi-year production line for the U.S. Army, and an established logistics support and aircrew/maintainer training effort."
If the company was selected for both missions, Sikorsky estimates a "conservative savings of $3 billion … over the 25-year operational life of 205 HH-60 Recap/CVLSP aircraft."
AgustaWestland also plans to compete for both tenders. It plans to bid its AW-139M helicopter for the CVLSP, and the larger AW101 for the HH60 replacement program.
"We're enthusiastic and look forward to working with the Air Force as they develop their specs for the CVLSP program and HH-60 recap, and we anticipate being very competitive," AgustaWestland vice-president for strategy Dan Hill said.
"We're ready."
Said John Williamson of The Boeing Co.: "Boeing looks forward to fully supporting the recently announced acquisition strategy to recapitalize the U.S. Air Force helicopter fleet."

Raytheon Wins Army Deal for Excalibur Ia-2 Shells

PHOENIX - Tucson-based Raytheon Missile Systems has been awarded a $172.6 million contract to manufacture thousands of artillery shells for the U.S. Army.
The money will allow the company to start full-rate production of the Excalibur Ia-2, a longer-range shell than previous versions of the projectile.

According to the contract, Raytheon will provide the shells by the end of January 2013. Raytheon has been building the projectiles since 2007.
Excalibur is a 155-millimeter precision-guided artillery round that is in use with the Army and U.S. Marine Corps. It uses GPS precision guidance to come within about 30 feet of its target to limit collateral damage, Raytheon said.
Excalibur Ia-2 has a range of nearly 26 miles when fired from U.S. howitzers. The previous version, the Ia-1 has a range of 14 miles.
The projectiles give soldiers lifesaving options when close air support is unavailable, the company said, adding that more than 300 rounds have been fired in battle in the past year.
"War fighters need Excalibur because it provides a level of precision they simply cannot get with other artillery rounds," said Col. Michael Hartig, of the U.S. Army Fires Center of Excellence, in a statement.
He said the weapon's GPS precision is ideal for all types of terrain, including urban settings and areas where soldiers and Marines are close to the target.
In August 2010, the Army awarded Raytheon a contract to complete the design of the next generation: Excalibur Ib.
It is expected to leverage current technology but reduce costs by an estimated 50 percent.
Work for the contract will be performed in Tucson, 10 other U.S. cities, Sweden and the United Kingdom.

DoD Axes Joint Strike Fighter's Alt Engine

The U.S. Defense Department has formally terminated the General Electric/Rolls-Royce F136 alternative engine for the tri-service Joint Strike Fighter (JSF).

General Electric says the F136 program has completed 80 percent of its developmental phase. (GE Aviation)

According to a Defense Department news release, the companies, along with Congress, were notified of the decision April 25.

Pentagon procurement czar Ashton Carter issued a stop-work order March 24 to the companies to halt their work on the alternative engine, which the Defense Department had determined is "unneeded and wasteful."
That action, which saved the Defense Department $1 million per day, was put in place prior to a final resolution of the F136's disposition in the FY2011 budget.
After Congress voted earlier this month to enact a full-year continuing resolution in which there were no funds allocated to the F136, Carter ordered the engine to be terminated.
General Electric spokesman Rick Kennedy said in a written statement that the company was disappointed but would comply with the termination notice. However, the company is not backing down from continuing the fight to save the engine.
"[General Electric] and Rolls-Royce will work closely with our Congressional supporters during the 2012 budget process in pursuit of incorporating the engine into the program, and preserving competition," Kennedy said, echoing earlier comments by General Electric CEO and chairman Jeffrey Immelt.
In a letter to GE Aviation employees, Immelt vowed to continue to fight to save the engine program.
"I can assure you we are not giving up. We will fight to bring competition to the 2012 budget debate," he said.
Immelt said that the government would forgo billions in long-term savings by canceling the F136, which he said has completed 80 percent of its developmental phase.
"We will keep the core technical team together as we continue the fight, and reassign the other highly skilled employees of the F136 team to other Aviation programs," Immelt said.