Industry Insight

By January 26, 2015Commentary
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Looking beyond the ‘bathtub’ toward 2025 and beyond

By Mr. Mark Signorelli

Editor’s Note: This is the first in an occasional series of viewpoints from industry on how it can work with the Army and DOD to preserve essential capabilities for the warfighter.

Mr. Mark Signorelli

Mr. Mark Signorelli

As the defense industry experiences the most challenging environment of the past three decades, we are forced to look to the future. We see the bottom of a sizable bathtub directly in front of us. A mere eight years ago, the defense industry was at its peak; today, our combat vehicle industrial base is at its lowest levels in our production history.

In 2008, during the war surge and at the height of Mine Resistant Ambush Protected (MRAP) vehicle production, our BAE Systems facility in York, PA, was operating at the company’s highest-ever production levels. BAE Systems and the defense industry surged at short notice to meet the challenge of mass-producing MRAPs because the industrial and engineering bases were warm and operating at sustainable levels. That peak production was clearly unsustainable, however, and for the past six years, the industrial base has been in a steady decline.

Workload Vehicle Programs Chart

LESS WORK TO DO: Production throughout the combat vehicle industrial base has dropped dramatically since the MRAP spike in 2008. This graphic, for example, represents with different colors the workload for the variety of vehicle programs at BAE Systems’ York, PA, production facility. In response, BAE Systems is working to maintain the resources it will need to prepare for future work. (SOURCE: BAE Systems)

Today, the same York facility, which produces the M109A7 and M992A3 vehicles for the Paladin Integrated Management program, as well as upgrades for the M88 fleet and the Bradley Family of Vehicles, is at one-third of the production workload that it had six years ago.

Defense companies have begun shifting their focus to preserving key skill sets for the future, i.e., “sustaining the industrial base.” BAE Systems’ goal, for example, is to ensure that the experts who know how to support, sustain and design combat vehicles are available when the time comes to upgrade vehicles, to integrate future technology on existing platforms or to design the vehicles of the future. The skill sets in our engineering team, our manufacturing plants and those of our suppliers are rare; it takes years to develop the expertise to sustain world leadership in combat platforms for the U.S. military. As an example, fully training and certifying an expert ballistic welder, a skill that is already becoming scarce within the industrial base, requires an investment of at least three years. How will we ensure that that skill is available and that the capability to train future generations survives?

IDENTIFYING THE CHALLENGES
As we deal with increasing pressure to right-size the business, we see very significant challenges in three areas: our production capability and capacity; our integrated engineering design, development, integration and test capabilities; and our supply base. With less work coming into the plants, we are already seeing the impact on the key skill sets and our supply base.

BAE Systems has consolidated the assembly lines in our York plant into one building, compared with multiple buildings during production peak, and shut down the Bradley turret line. Our suppliers are examining whether they can stay in business and, if so, whether it’s worth the cost of doing business in the defense market, or if they should retract to their commercial business areas. Our engineering team is struggling to determine the minimum staff necessary to maintain core and critical capabilities in a market where there is little need for highly skilled and experienced systems engineering, design and integration skills. Without sufficient workload, we will lose critical skills and capabilities such as turret design, manufacturing and integration.

One critical skill set is engineering, especially systems engineers, design engineers and integration and test engineers, who are essential to the development of future vehicles. They bring a body of knowledge in unique combat vehicle design and performance that industry cannot reconstitute from the commercial engineering base.

MRAP Armored Vehicle

ARMOR ROLLBACK: A Soldier from the 1173rd Transportation Battalion directs an MRAP armored vehicle before it leaves the ship that delivered the MRAPs to a port in Kuwait, Nov. 25, 2014. BAE Systems and the defense industry surged at short notice to meet the challenge of mass-producing MRAPs. That was possible because the industrial and engineering bases were warm and operating at sustainable levels. For the past six years, however, the industrial base has been in a steady decline. (Photo by MSG Paul Tuttle)

Industry and the Army have been working closely to sustain key skills, but we are on the razor’s edge; we can’t relax, or we will lose the “secret sauce” that has sustained our industry and our defense. Recent remarks by the Hon. Heidi Shyu, assistant secretary of the Army for acquisition, logistics and technology, about sustaining a research and development (R&D) effort highlight the criticality of this effort not just for the Army but the defense industry that supports the Army. “I think collaboration is really essential,” she said, adding, “No single person or organization possesses a monopoly on innovative ideas. It is critical for us to collaborate with industry, academia, federally funded R&D centers and other government organizations to solve difficult problems. So my vision is that we will collaborate across the board to spur innovation.”

We believe that the Army and industry have to team on important R&D efforts to sustain critical engineering capabilities in both the Army R&D community and in industry. The Army’s Future Fighting Vehicle program, which engages BAE Systems, General Dynamics, the U.S. Army Tank Automotive Research, Development and Engineering Center and the Program Executive Office for Ground Combat Systems, is a good example of how we can work together to support the Army’s long-term needs and sustain industry’s unique capabilities.

FROM NEW BUILDS TO UPGRADES
Over the past several years, as budgets have grown more constrained, we have seen an increasing shift away from new programs to restoring the capabilities of current systems and upgrading them with new and emerging technologies. A prime example of this is the M109A7 program, which marks a significant upgrade over the vehicle’s predecessor, the M109A6 Paladin Self-Propelled Howitzer. The program has restored space, weight, power and cooling capacity lost from previous upgrades, while providing growth potential for emerging technologies.

The design includes components common with the Bradley, including the chassis, engine, transmission, suspension and steering system; improves survivability; and leverages technologies developed during the Non-Line-of-Sight Cannon program, such as a 600-volt onboard power system. The state-of-the-art “digital backbone” and power generation capability provide significant growth potential for future payloads as well as accommodating existing battlefield network requirements. The Army and industry accomplished all of this by leveraging existing designs and capabilities, without developing new technologies.

This shift to upgrades as we sustain our current fleet offers the chance to integrate new technologies incrementally over time rather than waiting for an all-new vehicle to integrate existing, and by then potentially outdated, capabilities. How we choose technologies, and our ability to integrate them at Technology Readiness Levels 6 and 7, may hold the key to maintaining the effectiveness of our vehicles over time rather than focusing all efforts on new or advanced technologies and vehicles.

We are leveraging investments made across the Army and industry’s broad portfolio to develop solutions that can be used to modernize existing platforms and advance new capabilities. These advances have the potential to redefine the Army’s fleet of combat vehicles. Technologies such as hybrid electric drive (HED) provide electrical power to support emerging technologies such as high-energy lasers, radio frequency emitters and electromagnetic systems in ways we could never have imagined on board a combat platform. HED provides that electricity without adding an entire power system to the vehicle, saving significant space and weight while enhancing overall system performance. Incorporation of future power generation technologies is also much simpler with HED technology. Anything that generates electricity can be plugged in to power the system, such as directed-energy weapons.

M109A7

WHEN UPGRADING IS ENOUGH: The M109A7 Self-Propelled Howitzer, a prime example of the shift in focus away from new programs to restoring and upgrading the capabilities of current systems, is in low-rate initial production at BAE Systems’ York, PA, facility. The company plans to deliver the first of these vehicles to the Army this spring. (Photo courtesy of BAE Systems)

SUPPORTING THE SUPPLIER BASE
Equal to the challenge of sustaining our engineering and technology capabilities is the challenge we face with our manufacturing and supplier base. At BAE Systems, we have leveraged the advances in lean and flexible manufacturing processes and practices that allowed us to surge in support of the Middle East conflicts so that we can “gracefully” manage the downturn. We have consolidated production lines and programs; we have identified critical employees with unique and core skills; we have built a manufacturing organization that benefits from a diverse throughput to sustain capability while operating at significantly lower workloads than in the past. As we look to the future, this same lean thinking will enable us to flexibly adjust our workforce and facilities in support of new requirements, although not with the same surge capacity the Army has enjoyed in the past.

Similarly, we have worked with our supplier base, largely grounded in small businesses that serve unique defense requirements. These include businesses that have unique capabilities unavailable anywhere else. We have helped them streamline their processes and production lines and identify alternate work to sustain capability; we have mentored and guided troubled businesses; and we have encouraged diversification to manage risk. Despite these efforts, we are seeing a transition of that supplier base away from the defense industry, as their order books will no longer support their core business needs. This critical but often overlooked component of the industrial base may prove to be the hardest to sustain, and in the long run may represent the greatest cost and availability to reconstitute when we once again need it.

CONCLUSION
Ultimately, we all face the same challenge. It is not an Army issue or an industry issue; it is our issue. We are inextricably linked. The question is: “How do we live to fight another day?” There are not many acquisition programs out there today, but there are exciting opportunities in technology development and integration that will provide the Army with the future capabilities to meet needs we do not understand today.

The defense industry as a whole is going to continue to experience challenges; how we collectively face them will determine our mutual success or failure. Although these challenges will not mean the end of our major factories or a catastrophic failure of our supply base, we are navigating through a growing number of significant issues more strategically than in years past in order to secure a future for new technologies and programs.

We remain optimistic. There are exciting new technologies that will enable a new generation of capabilities we could not have imagined 20 years ago; they are real, they are here and they are ready to support an Army that will protect us as we face a dangerous future. Our challenge, as well as the Army’s challenge, will be maintaining our ability to seize on these exciting technologies and build new capability into the Army of the future.

Although this is a difficult period, we know that there will be a bottom and that the needs of our services will result in a rebound in the defense industry. The skills and experience that supported the country’s needs in the surge are still supporting the industrial base.

BAE Assembly Line

STAYING WARM, STRATEGICALLY: BAE Systems’ York, PA, facility, which produces and upgrades vehicles such as the Bradley, M88 and M109A7, is at one-third of the production workload that it had six years ago. The company is working with the Army to maintain critical skill sets during the defense spending downturn, which is resulting in a significant dip in production across the industrial base. Meanwhile, BAE Systems has consolidated the production lines in the York plant from multiple buildings into one. (Photo courtesy of BAE Systems)

MR. MARK SIGNORELLI is BAE Systems’ vice president and general manager, Combat Vehicles, focused on tracked and wheeled vehicle markets serving both U.S. and international customers. He joined BAE Systems through the former United Defense in 1997 after serving 21 years as a field artillery officer in the U.S. Army, a career that culminated with an assignment as assistant deputy director for operations in the National Military Command Center. Before that, he served in a wide variety of command and staff positions in III Corps, the 1st Cavalry Division, Eighth U.S. Army, U.S. Field Artillery School and 72nd Field Artillery Brigade. During Operations Desert Shield and Desert Storm, Signorelli served as the 1st Cavalry Division artillery operations officer in Saudi Arabia, Kuwait and Iraq. He holds a B.S. in zoology from the University of Florida.


Industry Insight is an occasional column in which Army AL&T magazine gives members of the defense industry a chance to share their perspectives from “the other side of the fence.” If you’re a defense industry professional and would like to provide insight from your perspective, send an email to armyalt@gmail.com and describe the commentary you’d like to write. Army AL&T editors will provide further direction.

This column was originally published in the January – March 2015 issue of Army AL&T magazine.

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