Defense Business Brief: Russia touts weapons in Middle East; Army moves to boost artillery round production; Lockheed to start installing hypersonic missiles on destroyers; and more.

By admin On Feb 21, 2023

IDEX, the International Defense Exposition held every other year in Abu Dhabi, is one of the few remaining places in the world where American and Russian arms makers share the same venue. (Recall that Russia was booted from the Farnborough Air Show in England last year.)

So on the week marking one year since Vladimir Putin ordered his forces to invade Ukraine, some 200-plus Russian weapons are reportedly on display at IDEX. Executives touted their battle-tested weapons, though Russia’s invasion has highlighted its weapons shortcomings.

A lot of the language used by Russian companies—such as talk of technology transfer, joint research-and-development projects, and offsets—was incredibly similar to that of Western companies, who have similarly looked to the Middle East to boost sales.

Heavily sanctioned by the U.S. and European nations, Russia’s deputy prime minister touted that trade between Moscow and Abu Dhabi rose 68 percent to $9 billion in 2022, according to Russian state media.

And last week, Russian firms were at Aero India, a major international air show, competing against American companies to sell weapons to New Delhi.

“[Russia’s] appearances at these venues suggest that as much as sanctions and export controls have imposed costs on Russia’s defense sector, they have not asphyxiated it,” Capital Alpha Partners Byron Callan wrote in a recent note to clients.

Spotted at IDEX: Palmer Luckey, founder of Anduril, the defense startup snapping up defense contracts and assembling a leadership team of noted national security professionals, was among the American executives in attendance. Anduril displayed both drone and counter-drone tech.

IDEX news: GM Defense signed an agreement with UAE’s Tawazun Council, which the company called the “first step toward a formal partnership to develop future products in the areas of advanced mobility and power solutions.”

More than 30 companies were part of the first-ever Israel pavilion at IDEX. It’s the latest step in strengthening relations between Israel and UAE following the 2020 signing of the Abraham Accords.

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General Dynamics Ordnance & Tactical Systems and American Ordnance will compete to manufacture 155-millimeter M795 projectiles. The two companies “will compete for each order of the $993,790,373 firm-fixed-price … contract to produce 155 mm rounds, which includes delivery orders for un-definitized contract actions to increase load, assemble and pack capacity to produce an additional 12,000-20,000 rounds per month.” It’s the latest step taken by the Army to boost procurement of the rounds, which the U.S. has been giving to Ukraine.

Lockheed Martin received a $1.1 billion contract to integrate the Conventional Prompt Strike hypersonic weapon system onto Zumwalt-class guided missile destroyers. “Under this contract, prime contractor Lockheed Martin will provide launcher systems, weapon control, All Up Rounds, which are the integrated missile components, and platform integration support for this naval platform,” the Lockheed said. “The company, along with industry partners including subcontractors Northrop Grumman and General Dynamics Mission Systems, is on track to provide the CPS surface-launched, sea-based hypersonic strike capability to sailors by the mid-2020s.”

The Army chose Humvee-maker AM General to build about 20,000 Joint Light Tactical Vehicles and 10,000 trailers. Until now, the JLTV, which replaces the Humvee, has been solely manufactured by Oshkosh Defense. It’s a major score for AM General. “We see it as a major unexpected reversal,” Cowen analyst Roman Schweizer wrote in a note to investors.

With the Biden administration poised to send its fiscal 2024 budget proposal to Congress in early March (Bloomberg reports that the budget will be sent to lawmakers on March 9, with detailed budget books being released on March 13), Sen. Elizabeth Warren, D-Mass., is calling for the end of so-called unfunded priority lists.

The lists, which the military services and combatant commands are legally required to send to Congress, “have become wasteful and inefficient tools that increase spending beyond DOD’s core priorities,” Warren wrote in a recent letter to Defense Secretary Lloyd Austin. The necessity of the lists has been debated for more than a decade.

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