BAE Systems Investor Brief - February 2008
04 Mar 2008
In This Month’s Brief:
MAJOR PROGRAMMES UPDATE
- Tenix acquisition
- New lighter weight armour for MRAP vehicles
- Next generation MRAP II test vehicles
- Swedish SEP program cancelled by Supreme Commander
- Assembly starts of Taranis unmanned combat air vehicle
- Fuel testing on the first F-35 Lightning II STOVL variant
- BAE Systems partners for MARS tankers
CONTRACT AWARDS THIS MONTH
- Recce Pods for F-16
- EPIC contract
- FBI contract win
- Evaluating missile defence system on US passenger aircraft
- Weapon system for CV-22 Osprey
- Contract for C-130J radar warning receivers
- Air Force to get updated air planning systems
- US$90 million to provide spare parts to the Indian Army
- US$91.4M contract for M113 reset
- Contract modification to prepare Bradley combat vehicles
- US$75 million 'Spares By The Hour' support programme contracts
- Swedish government approves Gripen Thailand deal
GENERAL NEWS
New facility to open in Cordova, Alabama
On 7 March 2008, BAE Systems will hold a dedication ceremony celebrating the opening of its new Cordova, Alabama facility. The new facility will manufacture large components of the advance gun systems and the Mk57 VLS, both armaments that will go aboard the U.S. Navy's newest destroyer, the DDG 1000.
Congressman Ellison visits Armament Systems
Representative Keith Ellison (D MN-5) visited BAE Systems in Minneapolis on 11 February for briefings and demonstrations of the facility’s modelling and simulation capabilities in the Virtual Integration Centre and prototype production capabilities in the Systems Integration Facility (SIF).
The Congressman saw the mission module for the Non-Line-of-Sight Cannon system being assembled in the SIF and also saw the M326 QuickStow™ mortar system and the vehicle emergency escape windows.
MAJOR PROGRAMMES UPDATE
BAE Systems Australia's proposed acquisition of Tenix Defence is a key step towards developing an effective, skilled and sustainable defence industry in Australia. The key driver for this acquisition is to grow and enhance the capability we can provide to the Australian Defence Force (ADF). It will allow us to broaden and deepen our partnership with our customer, whilst also investing in the development and sustainment of Australia's defence industry.
New lighter weight armour for MRAP vehicles
BAE Systems delivered the first 2,000 armour panels, weighing 100 tons, to the US Army on 22 January. This lighter weight expanded armour was developed by BAE Systems and will be used on Mine Resistant Ambush Protected (MRAP) vehicles already in service.
BAE Systems Anniston, Alabama facility is currently adding 21,875 ft2 of manufacturing space to its facility and anticipates hiring additional employees as a result of a US$7.6 million contract awarded last September from the US Army TACOM Life Cycle Management Command, to provide 20,000 of these lighter weight expanded armour panels for the MRAP Vehicles.
Next generation MRAP II test vehicles
BAE Systems has been competitively selected to develop and produce prototypes of the next generation of Mine Resistant Ambush Protected (MRAP) II vehicle with the award of a US$5.7 million contract from the MRAP Joint Program Office.
As one of only two contractors chosen, BAE Systems will produce Category I MRAP II test vehicles based on the company’s Caiman 6x6 design and Category II MRAP II test vehicles based on the company’s RG33 6x6 vehicle.
Six Category I MRAP II vehicles, along with improved armour solutions, will be provided to the customer in March 2008 for testing under the contract’s initial delivery order.
Swedish SEP program cancelled by Supreme Commander
The Swedish Supreme Commander has decided to cancel the Swedish SEP program (known in US as Thor), a programme managed by BAE Systems AB. SEP is a modular armoured, tactical vehicle system under development together with the Swedish Armed Forces. The decision is now under political review.
Assembly starts of Taranis unmanned combat air vehicle
Assembly of the first major components of Taranis, the demonstrator at the centre of the £124m Unmanned Combat Air Vehicle (UCAV) programme has commenced at Military Air Solutions Warton site.
Specialist jigs have been set up in a dedicated assembly hangar which will be home to Taranis until it prepares for its first test flights in 2010.
BAE Systems is leading a team comprising Rolls-Royce, QinetiQ and GE Aviation (formerly Smiths Aerospace) in developing the UK MoD Taranis Technology Demonstration Programme which brings together a wide range of expertise on flight dynamics, autonomous systems and stealth capability.
Fuel testing on the first F-35 Lightning II STOVL variant
Fuel testing, led by Military Air Solutions, has now been carried out on the first F-35 Lightning II short take off and vertical landing (STOVL) variant. The testing was performed at programme partner Lockheed Martin's plant in Fort Worth, Texas. The F-35 fuel team based at Warton flew out to the US at the beginning of January to lead the testing, which is an important milestone for the aircraft on the road to gaining mid year flight qualification for first flight.
BAE Systems partners for MARS tankers
A consortium led by BAE Systems Surface Fleet Solutions has submitted an innovative response to the MOD’s Pre-Qualifying Questionnaire (PQQ) to design and build up to six Fleet Tankers for the Royal Fleet Auxiliary.
BAE Systems will partner with BMT Defence Services and Daewoo Shipbuilding & Marine Engineering to bid for the contract for the ships, the first part of the Military Afloat Reach and Sustainability (MARS) programme.
BAE Systems will act as Lead Contractor and Programme Manager, BMT will be the Design Partner and the ships are planned to be built by DSME in Korea. While it is intended that the Vessels would be constructed in Korea, a unique feature that the Consortium offers, in terms of flexibility, is the ability to provide UK build options, should such an approach become necessary.
CONTRACT AWARDS THIS MONTH
E&IS has been selected to supply six Recce Pods for the UAE’s F-16s with associated ground stations, support and training worth US$80m. The contract detail is currently being negotiated, with final award anticipated this quarter.
Technology Solutions & Services has been awarded the Enterprise Platform Integration Contract (EPIC) from the Space and Naval Warfare Systems Command on behalf of its organizational partner, the Navy’s Program Executive Office for Command, Control, Communications and Intelligence systems. The scope of the contract includes integration, engineering, procurement, fabrication, assembly, test, inspection, delivery, and limited installation of integrated C4I capabilities aboard new construction ships.
BAE Systems Information Technology’s Civilian Solutions has been announced as a strategic partner to Lockheed Martin, providing biometrics, IT security engineering and systems integration expertise to the Federal Bureau of Investigation.
The program aims to build the world’s largest computer database of peoples’ physical characteristics to reduce terrorist and criminal activities by improving and expanding biometric identification and criminal history information services through research, evaluation and implementation of advanced technology.
Evaluating missile defence system on US passenger aircraft
BAE Systems has received a US$29 million award from the US Department of Homeland Security to test an infrared aircraft missile defence system on passenger aircraft to evaluate the system’s compatibility with daily passenger airline operations and maintenance. The award continues E&IS work to evaluate IR countermeasures to protect civilian aircraft against shoulder-fired missiles.
Weapon system for CV-22 Osprey
An interim all-quadrant defensive weapon system for the CV-22 Osprey aircraft will be developed by E&IS. The contract awarded by the US Special Operations Command calls for rapid development, installation, testing, and qualification of a weapon capability that provides defensive fire protection to all quadrants of the aircraft.
Contract for C-130J radar warning receivers
Electronics & Integrated Solutions has been awarded a US$28.1 million US Air Force contract to provide radar warning receiver systems for new-production C-130J transport aircraft. The AN/ALR-56M radar warning receiver detects a broad range of incoming radar signals and identifies and characterizes their origin as friend or foe, alerting the pilot when it detects threats to the aircraft.
Air Force to get updated air planning systems
Electronics & Integrated Solutions has been awarded a US$42.5 million contract by the US Strategic Command to develop and maintain new capabilities for the air vehicle planning system. The system provides rapid, automated mission planning for the Air Force’s bombers, cruise missiles, manned and unmanned reconnaissance aircraft, and air-refuelling tanker support aircraft.
US$90 million to provide spare parts to the Indian Army
BAE Systems AB has been awarded a contract for spare parts to the Indian Army worth approx US$90 million. The spare parts will help the Indian Army to keep in service the 400 155 mm artillery guns that was delivered from Sweden to India during the 1980s.
US$91.4M contract for M113 reset
BAE Systems was awarded a US$91.4 million contract modification from the US Army TACOM Life Cycle Management Command to reset up to 1074 M113 Family of Vehicles (FOV).
Under the reset program the family of M113 vehicles are brought back to combat ready condition. In addition, the vehicles will receive add-on armour and nuclear, biological and chemical modifications. Work on the contract will be performed at BAE Systems Anniston, Alabama facility and is expected to be completed by 31 December 2008.
This modification, when combined with the previous contract awarded in June 2007 worth US$18.77 million, brings the total value of the contract to US$110.1 million.
Contract modification to prepare Bradley combat vehicles
BAE Systems has received a US$7 million contract modification from the US Army to prepare almost 1,700 Bradley combat vehicles to receive electronic warfare systems capable of jamming the detonation of roadside bombs.
Under this contract, the Company will manufacture and install the A-Kits, which are the assemblies used to mount the system, onto 1,691 Bradleys. The system, called the Counter Remote Controlled Improvised Explosive Device (RCIED) Electronic Warfare (CREW)-2, is manufactured by Syracuse Research Corporation and is designed to counter a wide range of RCIEDs.
US$75 million 'Spares By The Hour' support programme contracts
Regional Aircraft has enjoyed continuing success with its JetSpares and MACRO ‘spares by the hour’ customised spares support packages, winning new business worth over US$75 million.
The biggest contract, which was signed during the last few days of 2007, was with Ireland’s CityJet, the wholly-owned Air France subsidiary, while extension business has also been secured with Titan Airways of the UK and Blue 1 of Finland.
Swedish government approves Gripen Thailand deal
On 25 January, the Swedish government authorised FMV, the Defence Materiel Administration, to enter into an agreement with the air force in Thailand for the transfer of an integrated air surveillance system comprising Gripen new generation fighters and the Erieye radar surveillance system.
The initial agreement covers six Gripen aircraft, the Erieye radar surveillance system and the accompanying data-link systems. The order amounts to some SEK 3.8 billion (approx. US$600 million). Delivery is planned to take place in early 2011.
