Teal Group aerospace analyst Richard Aboulafia, a smart and perceptive guy prone to irreverent humor, combines all of those attributes in a witty take today on the Marine Corps modern penchant for gee whitz and exorbitantly costly weapons.
SecDef Robert Gates’ cancellation this month of the USMC’s Expeditionary Fighting Vehicle (EFV) is the latest DoD move against an “exquisite” weapon. The new definition of exquisite: an expensive way to meet the overly-exacting requirements of a relatively small user group. “Exquisite” is the new “gold plated.” I don’t cover land vehicles, but I haven’t met many experts who defend the EFV against charges of exquisiteness. But other USMC programs might be vulnerable to the new exquisite aspersion, too. In fact, a USMC aero systems bubble might lurk in Teal Group’s market forecasts
Aboulafia's bottom line is with the Pentagon's growing budget squeeze, some Marine aviation programs near and dear to the heart of Fort Worth, Texas could yet find themselves the target of budget scrooges far more concerned with current and future price tags rather than mesmerized by claims of exquisite combat capability.
The Marines still have grand plans, especially for these budget-constrained times. F-35B procurement
will cost at least $60 billion. MV-22 procurement will come to around $40 billion. Both are very expensive to operate, too. The UH-1Y/AH-1Z program comes to $12 billion. The CH-53K, a sudden new priority, will cost around $26 billion. The Marines, in short, still plan to procure the kind of baroque aeronauticalmenagerie that the USAF and bluewater USN were forced to abandon years ago (see my October 2010 letter for more on this).
Each V-22 pays for one larger CH-53 and one smaller H-60, a considerable gain in lift.
TealGroup’s USMC aero forecasts remain intact, for now. The USMC still has a lot of political clout.
But if this is a bubble, the most vulnerable company is Bell Helicopter Textron. Their half of the
V-22, and all of the AH-1Z/UH-1Y, constitute 60% of company aircraft revenue in our ten year forecast.
The current Aboulafia missive is not yet on his website so we'll attach it here for your reading pleasure.