EADS calls A400M buyers' signals positive-report

* EADS chairman welcomes buyers' signals on costs
* Meeting set for end of week in Berlin

Defense News ~ FRANKFURT, Jan 17 (Reuters) - The chairman of Airbus parent EADS (EAD.PA) on Sunday welcomed signs by its partners in the Airbus A400M military plane project that they are ready to talk about additional costs which threaten the deal.
"That its a very positive sign," Louis Gallois said in an interview with Frankfurter Allgemeine Sonntagszeitung (FAS), confirming he had knowledge of a planned meeting.
"We are ready to work constructively towards a solution that is acceptable to all sides," he said.
The buyers of the 180 Airbus troop transporters, seven European governments, pledged this week to seek a joint deal with Airbus.
EADS had complained it was been left out of crucial meetings and had set a Jan. 31 deadline for an agreement to avoid scrapping the plane.
"The A400M even at a higher price is cheaper, more modern and more flexible than the (U.S.) American competition," Gallois said in the FAS story.
The Handelsblatt business daily in pre-release abstracts of a story due to be published on Monday said that the meeting between governments and Airbus was likely to take place at the end of the week in Berlin, citing government sources.
The paper added that the governments are ready to offer a compromise under which they would be willing to forego some of the handling characteristics sought by the military -- a step which could significantly reduce the plane's production costs.
There was no comment immediately available from the German Defence Ministry, which has been negotiating on the project.
The A400M's future has been threatened by an 11 billion euro ($15.87 billion) or 55 percent blow-out in development and production costs, overshadowing a successful maiden flight carried out last month.
The planes had been due for delivery in 2009 but the maiden flight only took place last month and delivery is now set for 2012.
Gallois said the planned development schedule had been too tight initially and no comparable plane had needed less than 12 years to come to fruition.
"...with about 10 years for the A400M, we will be ready in very good time," he said.
He said that 40,000 jobs depended on the plan, including 11,000 in Germany.
He also said a civilian plane, the long-haul A350, was planned to be delivered from 2013 onwards and while there were no delays at this stage, the schedule was ambitious.
(Reporting by Vera Eckert; Editing by Erica Billingham)

US Navy's future linked to flexible weapons - chief

* Navy needs more ships
* Affordability critical to future success
* LCS ships to change Navy operations
By Andrea Shalal-Esa
Defense News ~ WASHINGTON, Jan 17 (Reuters) - Increasing pressure on the overall U.S. defense budget means the Navy must focus even more buying flexible and affordable weapons systems that can adapt to changing threats and needs, the Navy's top officer said.
Chief of Naval Operations Admiral Gary Roughead, calling himself "a capacity guy," said his top priority was to proceed with plans to buy dozens of smaller, relatively inexpensive littoral combat ships (LCS) to expand the Navy fleet from 287 to 313 and meet growing demand for naval forces.
He said he was also focused on cutting costs across the board, which means reining in any efforts to add new "bells or whistles" to existing programs, streamlining maintenance and keeping the new F-35 fighter jet development program on track.
Roughead declined to comment on the Navy's budget for fiscal year 2011, which begins Oct. 1, but said shaping the budget was always "a tough drill" given competing demands. "You always want to be able to do more, but I'm not dissatisfied."
Industry executives are anxiously awaiting the fiscal 2011 Pentagon budget on Feb. 1, amid signs that defense spending is beginning to flatten out after eight years of strong growth.
Roughead said the flexibility and affordability of weapons systems would be the key to their future success, especially given mounting demand for naval forces.
"The stuff that we buy is going to be around for a long time so we need to get as much flexibility out of it," Roughead said during a trip to Alabama to commission a new aluminum three-hulled ship built by General Dynamics Corp (GD.N), the second of two competing designs for the new class of warships.
Roughead lauded what he called the "eye-watering" performance of both the General Dynamics vessel, and a more traditional steel monohull design built by Lockheed Martin Corp (LMT.N) that entered service in September 2008.
Both ships will revolutionize Navy operations since they have a smaller crew and carry interchangeable packages that will allow them to rapidly switch missions, including hunting for mines or enemy submarines, or providing disaster relief.
Roughead said he was pressing the Navy to award a contract to one of the teams as soon as possible. "It doesn't make any difference to me if it's the LCS-1 design or the LCS-2 design. I've seen enough of both that I'm satisfied. Now it's about getting the cost down and getting the numbers."
He said the LCS concept of modular mission sets would be used in future ship designs, although few new programs are likely to start development in coming years. For instance, work on new command and control ship will not begin until next decade.
Roughead said he was already exploring ways to use an LCS-type approach on new DDG-51 destroyers the Navy will build after truncating its more expensive DDG-1000 destroyer. Sending those ships out with one helicopter instead of two would leave space for a separate interchangeable mission set, he said.
The Navy is also looking at putting payload tubes on its Virginia-class submarines, which would allow them to perform more missions and make them more flexible, Roughead said.
"If you can give me 20 ships that can do 80 percent of what four ships can do, I'll go for the 20," said Roughead, who became the Navy's top uniformed officer in September 2007.
The Navy needed self restraint and more of a "good enough" approach rather than continuing to chase technology, he said, adding that maintaining a highly skilled shipbuilding workforce was as important to U.S. national security as the ships themselves.
Roughead said a greater focus on smaller ships like LCS and a new Joint High Speed Vessel built by Australia's Austal (ASB.AX) in Mobile, would help the military respond to changing threats and needs, such as the Haiti earthquake.
Given budget concerns, it made sense for now to continue building DDG-51 destroyers, rather than embarking on a costly program to develop a new cruiser, he said, adding that new programs should be based on common hulls to save money.
He said he also remained a strong proponent of amphibious ships, two of which are en route to Haiti to help with the recovery effort, saying they offered just the kind of flexibility the Navy and Marine Corps needed.
Roughead said he also continued to look for other ways to save money and overhead on weapons, including talks with the Air Force on combining separate program offices for the Global Hawk unmanned plane built by Northrop Grumman Corp (NOC.N).
At the same time, he said it was critical to keep the pressure on the $300 billion Lockheed F-35 fighter jet program, which is developing three separate variants for the Air Force, the Navy and the Marine Corps and has seen its costs rise.
The Navy expects to spend more than $20 million each to upgrade its existing F-18 fighters to bridge the time until the carrier variant of the F-35, or Joint Strike Fighter, is available.
He declined to comment when asked if the Navy could decide to buy fewer F-35s if problems emerged with that program, saying only: "I think the most important thing is that we stay focused and keep the pressure on getting the JSF."

(Editing by Maureen Bavdek)

US Navy commissions newest warship, others coming

* "Looks like something out of Star Wars"
* Wants contract for next ships as soon as possible (Adds quotes and details from ceremony)
By Andrea Shalal-Esa

Defense News ~ MOBILE, Alabama, Jan 16 (Reuters) - The U.S. Navy commissioned its newest warship on Saturday, a 379-feet (115.5- metre) aluminum three-hulled vessel built by General Dynamics Corp (GD.N), one of two designs vying for billions of dollars of follow-on orders.
Chief of Naval Operations Admiral Gary Roughead told reporters as he traveled to the ceremony that the new class of fast, flexible shallow-water warships would be useful for a wide range of missions, including responding to humanitarian disasters like the earthquake in Haiti.
Roughead said the first Littoral Combat Ship (LCS) built by Lockheed Martin Corp (LMT.N), a more traditional steel monohull ship which is in Norfolk, Virginia, awaiting deployment to the Caribbean, could be used to quickly move supplies from the U.S. military base at Guantanamo, Cuba, to Haiti.
"Right now we're working a lot of different options, but if the LCS would be of value in Haiti, then that's where it's going to be," Roughead said, noting the ship's shallow draft made it well-suited to bolster the U.S. military effort there.
Regardless of which design wins, the Littoral Combat Ships will dramatically shift the way the Navy will operate, featuring interchangeable mission packages to hunt for mines, fight pirates or other enemies in small boats, or track enemy submarines -- depending on what is needed at the time.
If he had more of the new ships -- which carry manned and unmanned helicopters -- already available, they would be deployed like a "swarm of bees" around Haiti, Roughead said.
Independence, whose namesake was commissioned in 1776, was the second of a new "revolutionary" class of ships because of its small crew size and the modular, interchangeable combat systems it will carry, Roughead told the ship's crew and hundreds of guests who braved the pouring rain to attend the ceremony on the dock in Mobile.
"It is truly unique in the world," Roughead said, telling reporters later, "It doesn't even look like a ship. It looks like something out of Star Wars to me."
The ships have a core crew of just 40 people, part of the Navy's drive to cut the number and cost of people aboard its ships. Even adding in a mission package and air crew, the staffing will be just 78 -- far less than comparable ships .
The Navy expects to release around Jan 22 a final request for proposals for the competition between General Dynamics and Lockheed, whose first LCS ship was commissioned in late 2008.
The contract, valued at well over $5 billion, will be 10 ships at a rate of two each year over the next five years, as well as the computer system to run five more ships. The Navy plans to buy a total of 55 of the faster, more agile ships.
Roughead said he was pleased with LCS, and said it was critical to his plan to increase the size of the U.S. Navy to 313 ships from 287.
He said he was pressing Navy officials to award a contract for the next batch of LCS ships "as soon as we possibly can" after allowing industry to review the terms of the competition and submitting their bids.

(Editing by Philip Barbara)

Alcoa Defense Hails the Commissioning of New Aluminum Navy Littoral Combat Ship

Defense News ~ WASHINGTON--January 16, 2010, (BUSINESS WIRE)--Alcoa Defense, the defense industry’s leading supplier of aluminum, titanium and other light alloys, today hailed the commissioning of the first General Dynamics Littoral Combat Ship (LCS), the USS Independence. Designed and built by a team led by General Dynamics and Austal USA in Mobile, AL, the ship’s all-aluminum trimaran hull allows it to be faster and more agile than a conventional Navy ship. The ship’s amahs, or side pontoons, provide buoyant support on each side of the vessel’s center hull and give it maximum stability, even when turning at high speeds.
“Through our work with Austal, we are helping to make the General Dynamics LCS lighter, faster and stronger,” said Dave Dobson, president, Alcoa Defense. “We provide design and engineering support for the General Dynamics LCS as well as the Lockheed Martin LCS. Alcoa Defense enhances their vessels by maximizing the performance of light alloys.”
The USS Independence is one of two rival designs for a revolutionary new class of high-speed, affordable warships with multi-mission capabilities. The other LCS design, the USS Freedom from Lockheed Martin, was commissioned on November 8, 2008. Both ships make use of aluminum, which helps ensure high-speed operations, a shallow draft, and increased maneuverability in potentially dangerous coastal environments in which they will operate. The USS Freedom has an all-aluminum superstructure and steel hull, and the Navy is planning to deploy her two years earlier than planned.
Additionally, through partnerships with subcontractors, Alcoa Defense is helping to streamline the manufacturing process for the General Dynamics LCS and the Lockheed Martin LCS, while simultaneously making aluminum shipbuilding more affordable. Most lead supply contracts have not yet been finalized for either of the LCS ships.
The USS Independence is a 416-foot (127-meter) trimaran, with a massive center hull and two side hulls that increase its stability and give it a 7,300-square-foot flight deck -- nearly twice the size of that on the larger DDG-51 destroyer. Built for use in coastal or littoral waters, the ship can reach sprint speeds of more than 45 knots (52 mph).
About Alcoa Defense
Alcoa Defense partners with industry leaders to design systems and materials that increase the speed, reach, agility and survivability of today's and tomorrow's strategic platforms. Through an unmatched combination of defense and commercial engineering, Alcoa (NYSE:AA - News) delivers multi-product, lightweight and cost-effective solutions for programs ranging from the F35 Joint Strike Fighter to the M777 howitzer to armored tactical and fighting vehicles. More information can be found at www.alcoadefense.com.

Contact:
Alcoa
Kevin Lowery, 412-553-1424
Mobile 724-422-7844