After Retired Vice Admiral Bob Harward turned down President Trump’s offer to be National Security Advisor, the President selected Lieutenant General Herbert Raymond (“H.R.”) McMaster to replace Retired Lieutenant General Michael Flynn. Ret. Lt. General Flynn resigned amid reports he communicated with Russian officials and could be vulnerable to blackmail.
Two days before President Trump’s visit to Boeing’s South Carolina facility for the debut of Boeing’s 787-10 Dreamliner aircraft, 74% of the workers at the facility voted against unionization. Union organizers with the International Association of Machinists and Aerospace Workers were unsuccessful in their efforts to unionize the workforce. Workers in Boeing’s South Carolina facility currently earn ~1/3 less than unionized counterparts.
Navy and Marine F-18 availability has dropped from traditional in-service levels of ~70% to under 40% due to decades of reduced aircraft procurement and the limitation of aviation support services from the 2013 budget sequestration. Reduced procurement dates back to the end of the Cold War when the Navy bought fewer F-18s than originally expected and the Marine Corps didn’t buy any because of beliefs in decreased future military operations and anticipation for the new Joint Strike Fighter.
This past week, Defense Secretary James Mattis officially introduced his plan for rebuilding the U.S. Armed Forces to address President Trump’s national defense strategy. Mattis issued a memo to Pentagon budget planners announcing his desire to “build a larger, more capable, and more lethal joint force” and provided guidance for the FY2017 budget amendment, the FY2018 President’s Budget request, and the FY2019 – FY2023 Defense Program.
Boeing, Lockheed Martin, Northrop Grumman, and Raytheon all announced year-end earnings this week, with only Boeing receiving a positive market reaction from the earnings calls. Boeing beat forecasted quarterly earnings and raised guidance on its 2017 cash flow and profit compared to 2016, even as the company faces questions transitioning from the 777 to the 777X program.
On Friday, the Senate confirmed General James Mattis to be the new Secretary of Defense hours after President Donald Trump’s inauguration. Earlier that day, Trump signed legislation granting Mattis a one-time exemption from the law requiring the Secretary of Defense to not be employed by the armed services for at least seven years.
Earlier this week, the Senate began confirmation hearings to vet President-elect Donald Trump’s Cabinet nominees. General James Mattis, the Secretary of Defense nominee, received broad bipartisan support after taking a strong stance against Russia and vowing his support for the Iran nuclear agreement. General John F. Kelly, Trump’s nominee for Secretary of Homeland Security, also received widespread support after insisting that his top priority would be to secure the southern border.
President Elect Trump has made strong remarks about indicating a desire to increase the U.S. Navy’s ship count by 28%, from its current 274 to 350. Based on these remarks, the U.S. Navy stands to be a substantial ‘winner’ in gaining additional funding in the coming years. Trump’s recent comment referring to China as an enemy of the U.S. would create an increased need for a strong presence in the Pacific Ocean.