In the perennial struggle to find the right balance in budget priorities between the size of the future force and the capability of the force, US Army leadership is coming down on the side of technology.
Chief of Staff Gen Mark Milley and Acting Secretary of the Army, Ryan McCarthy are using the Association of the US Army (AUSA) annual conclave here in Washington DC to announce new priorities and processes that preview its plans for future annual budgets, currently running at $137B per year. Their announcements support SecDef Jim Mattis' Oct 5 guidance to "fill holes in capacity and lethality while preparing for future sustained investment."
As it develops its PresBud 2019 budget submission and plans for 2019-2023, the Army is reprioritizing funding into six signature modernization efforts:
- Precision Fires
- More launch systems (MLRS (LMT), HIMARS (RTN))
- More missiles that go on them (ATACMS (RTN))
- New missiles (Long Range Precision Fires (RTN)) munitions (various) and capabilities (hypervelocity).
- Next Generation Combat Vehicles
- Optionally manned variants; manned-unmanned teaming
- Better defenses: Active protection systems, reactive armor, signature management
- More efficient: power generation, artificial intelligence, hybrid energy
- More lethal: directed energy
- Future Vertical Lift
- Develop the new technology that will eventually (over 20+ years) replace all current helicopters
- Near term focus is Bell (TXT) V-280 tilt-rotor vs. LMT/BA coaxial rotor to be demo'd in 2018
- Network
- To the dismay of GD, Army relooking at its plans for a mobile backbone; a do over for its ~$420M/year WIN-T Incr 2 program?
- Air and Missile Defense
- Greater emphasis on Counter UAS and Short Range Air Defense (SHORAD)
- THAAD (LMT) and directed energy
- Soldier Lethality
- Individual and squad level weapons, body armor, radios, sensors, exoskeletons
- Greater emphasis (more $) on training, simulation technologies
The Army also announced a streamlining and delayering of its modernization bureaucracy, breaking up TRADOC by integrating its futures-oriented requirements and resources processes together with the Army labs into six cross-functional groupings that report to a new four star who reports directly to SecArmy.
The obvious question is "if this is what you are going to do, what is it that you're not going to do?" More to come as I'll be on the floor of the AUSA event all day Monday and Tuesday researching that topic from Army and vendor vantage points.
Clients participating in my "booth walk" of the 720 companies on hand at AUSA, will meet personally with GD's EVP for Combat Systems, Mark Roualet and GD's President for Land Systems, Gary Whited, TXT CEO Lisa Atherton and Bell TXT CEO Mitch Snyder as well as BAE USA President Jerry DeMuro. (Contact Hedgeye sales) If you can't be there, contact me directly for specific questions that I may be able to research for you on the spot.
