Zachary Turke’s Post

When it comes to Aerospace, Defense & Security fields, numerous OEMs and prime contractors have tried and failed to acquire or merge, creating antitrust fault lines that will be difficult to cross. National interests in Europe have continued and likely will continue to thwart cross-border conglomeration, while the U.S. Defense Department appears to be firmly opposed to outsize contractor power. Besides, while grandiose couplings in commercial aerospace might appear less problematic from an industry perspective, aggrandizing moves are likely to raise strong antitrust concerns in the U.S. Justice Department. To find out more about the five big M&A deals that never happened in Aerospace, Defense & Security fields, follow the link for commentary from Stephen Perry, Oaklins’ Aerospace, Defense & Security (ADS) specialist!

With the recent #supplychain issues, insights from current conflicts and United States Department of Defense Modernization efforts, we are having more and more discussions around the defense industrial base (DIB) especially around recent issues of the DIB compacity with Ammo like ASA(ALT) strategy on "producing 70,000 to 80,000 shells per month by the end of calendar year 2024 or early 2025 ( https://lnkd.in/eceXUf_R )" and Kinetic System production efforts driving the DIB like BG Frank Lozano and US Army Program Executive Office for Missiles and Space "Coyote Interceptors" effort ( https://lnkd.in/eCP8sVcf ). When we look at DoD focused products or contracts like related to a Tank or Missile System, there is usually "one 'consumer' or buyer, specifically the U.S. government." Dr. Jerry McGinn, Ph.D. opinion piece in National Defense Magazine looks at the DIB in a lens of "competition is the lifeblood of the defense industrial base" and how "merger and acquisition activity" could enable the DIB in support of DoD. He also touches on the demand on the DIB with increased "experimentation and prototyping opportunities" and the ability to enable the DIB with #agile acquisition practices like with "Coyote Interceptors." 🤔 Final thought from Dr McGinn: "To foster competition, federal agencies should harness the strength of their positions as monopsonists and vigorously pursue initiatives like those outlined above (Reference Dr McGinn Article) to help unlock new levels of competition across the defense and wider government contracting markets."

The Federal Drive with Tom Temin gets more now from Democratic Congressman, John Garamendi, ranking member of the House Armed Services Subcommittee on Readiness. "There’s a major effort within the Department of Defense now to push this entire effort to bring new companies into the contracting for the military. Hopefully will be more successful than the past. And by my most recent count, there are five different organizations within the Department of Defense to do this, but it is frankly not working, in part because it’s easier to do what you did yesterday. And there is a risk to step outside the norm, and there’s a risk to bring in a new company. For example, the manufacturing of certain armaments is now being done by the major defense contractors who have did it before, and the government is spending millions upon millions to expand the capacity of those companies. Could those millions of millions be used to expand the capacity of new contractors? Of course they could. But that’s a risk. That’s a risk to the people that are within the Department of Defense, the acquisition teams. That they may wind up unsuccessful. The power of the big companies is such that, yeah, they’re going to screw up and they certainly have done that multiple times. But they’re big. And in that bigness there’s protection not only for the company, but also for those who do the contracting within the Department of Defense."

The Federal Drive with Tom Temin gets more now from Democratic Congressman, John Garamendi, ranking member of the House Armed Services Subcommittee on Readiness. "There’s a major effort within the Department of Defense now to push this entire effort to bring new companies into the contracting for the military. Hopefully will be more successful than the past. And by my most recent count, there are five different organizations within the Department of Defense to do this, but it is frankly not working, in part because it’s easier to do what you did yesterday. And there is a risk to step outside the norm, and there’s a risk to bring in a new company. For example, the manufacturing of certain armaments is now being done by the major defense contractors who have did it before, and the government is spending millions upon millions to expand the capacity of those companies. Could those millions of millions be used to expand the capacity of new contractors? Of course they could. But that’s a risk. That’s a risk to the people that are within the Department of Defense, the acquisition teams. That they may wind up unsuccessful. The power of the big companies is such that, yeah, they’re going to screw up and they certainly have done that multiple times. But they’re big. And in that bigness there’s protection not only for the company, but also for those who do the contracting within the Department of Defense."

However, the KEY REALITY is: Both DoD (military & civilian) and Defense Industry are facing the inexorable fact that their mutual Personnel workforces are: - Shrinking - Understaffed - Lacking of in-depth knowledge of: - Policies, - Procedures and - Processes - Possess nominal understanding of. Commercial Business fundamentals, including: - Finance - Accounting - Research & Development - Marketing & Sales - Intellectual Property Rights, Patents and Copyrights - Corporate Responsibilities & Liabilities - Profit Motivations #whitehouse #uscongress #ussenate #ushouseofrepresentatives #statedepartment #departmentofdefense #defenseindustry #defensecontractors #aerospace #jointchiefsofstaff #usarmy #usnavy #usmarinecorps #usairforce #usspaceforce #uscoastguard #NATO #AUKUS #QUAD #japan #korea #australia #unitedkingdom #canada #newzealand #netherlands #norway #sweden #finland #denmark #france #germany #italy #transpacificpartners

Mark Schweikert GAICD, BA, M.Def.Studs makes some great points about the practicalities of conducting Test & Evaluation (T&E) early in the Capability Lifecycle (Preview T&E) in his article published today on ASPIs The Strategist: https://lnkd.in/gnteC5TB Practical application of early T&E and testing of assumptions are critical steps for most (not all) major acquisitions. Paper-based evaluations should attract greater scrutiny and testing of assumptions in particular in areas of force integration.

Not a great picture of Boeing, but glad to see very recent news: "The Boeing Company announced Tuesday they have named Admiral Kirkland H. Donald, U.S. Navy (Ret.) as special advisor to Boeing President and CEO Dave Calhoun...Admiral Donald and a team of outside experts will conduct a thorough assessment of Boeing's quality management system for commercial airplanes, including quality programs and practices in Boeing manufacturing facilities and its oversight of commercial supplier quality. His recommendations will be provided to Calhoun and to the Aerospace Safety Committee of Boeing's Board of Directors" "Boeing’s transformation from an engineering-led powerhouse to a company grappling with the consequences of a culture shift underscores the importance of balancing commercial objectives with unwavering commitments to innovation, quality, and safety in the highly competitive and dynamic field of aerospace manufacturing." #aviation #airlineindustry #airlinesandairplanes #airlines #boeing #aviationsafety https://lnkd.in/gMr7As88

Meet Sean Butt 👔 Sean is a Senior Associate at Raw Selection, a Diligent Executive Search Firm! Sean says " I think one of the fascinating aspects of the Private Equity industry is that you work with so many talented individuals who go into an organization and change it for the better. But more than that, there are always acquisitions happening, and that changes the landscape of various adjacent industries, whether it's aerospace defense, manufacturing, or for example the HVAC sector. This enables any aspect of the industry worldwide." To find out more about Sean, watch this video: https://lnkd.in/eJyiQDNj #rawselection #privateequity #executivesearch #portfoliocompanies

Honeywell International recently finalized a ~$2 billion deal to acquire aerospace and defense technology company CAES Systems from private-equity firm Advent International. This move comes as the aerospace and defense industry garners increased focus amidst escalating geopolitical tensions worldwide. This acquisition follows a previous $5 billion deal where Honeywell purchased Carrier Global's security business in 2023. The company has allocated $25 billion in upcoming years for mergers and acquisitions, among other strategic initiatives. For more insights on this latest development, refer to the attached WSJ article.

Govini is proud to publish a new data-rich paper on U.S. defense acquisitions, production capacity, and deterring China, powered by http://Ark.ai. Learn more here: https://lnkd.in/ezJic2_t Jeffrey Nadaner, Tara Murphy Dougherty, David Bradshaw #Govini #ArkAI #DefenseAcquisition #DefenseTech #AI #BigData #NationalSecurity #DeterringChina #USProductionCapacity #DefenseIndustrialBase