Alphabet, Google’s parent company, announced its plans to sell Boston Dynamics, the legged-robot maker, as a result of internal disagreements and concerns about the Company’s ability to develop a marketable product within the next few years. Alphabet acquired Boston Dynamics and six other companies in 2013, as part of an acquisition spree to develop a robotics unit dubbed Replicant.
Boeing, which is facing competitive pricing pressure from Airbus’ increasing market share, announced it will consolidate its 747 and 767 jet programs as part of a broader cost cutting initiative. Elizabeth Lund, who is the general manager of the 777 program, will head the newly combined programs in addition to the 777 program.
Almost five months after the Air Force awarded Northrop Grumman a contract to provide the Long Range Strike-Bomber (“LRS-B”), Air Force secretary Deborah Lee James finally disclosed seven major contractors who will join Northrop in building, what is now officially designated, the B-21. James announced that Pratt & Whitney will build the B-21 engines at its facility in East Hartford, Connecticut.
Honeywell International announced that it is no longer pursuing an acquisition of United Technologies, roughly two weeks after it placed a $90 billion bid (excluding debt) for the target. Honeywell believes that a strategic combination will create value for both shareholders as both firms have complementary business portfolios; however, United Technologies has been unwilling to negotiate, stating the transaction would receive heavy anti-trust regulatory scrutiny and create resistance among customers.
The chairman of the Senate Armed Services Committee (“SASC”), Senator John McCain, stated he will not authorize the Long Range Strike-Bomber (“LRS-B”) if the procurement is on a cost-plus basis. Senator McCain expressed concern of the additional costs associated with the contract structure and voiced opposition to hear the Air Force’s perspective on the matter. Following the Senator’s remarks, the Air Force revealed the contract will be divided into two parts, cost-plus and firm fixed price.
The Government Accountability Office (“GAO”) denied Boeing and Lockheed Martin’s protest of the Pentagon’s award of the Long Range Strike Bomber (“LRS-B”) contract to Northrop Grumman. However, Boeing still has the option of pursuing the matter in court, and has suggested it’s considering doing so. Northrop Grumman was initially awarded the contract on October 27, 2015, but the decision was soon after protested.
The Securities and Exchange Commission (“SEC”) has launched an investigation to determine whether Boeing properly accounted for the costs and expected sales of the 787 Dreamliner and the 747 jumbo aircraft. The probe, prompted by a whistleblower’s complaint, concentrates on projections made by the Company about the long term profitability of two of its best known jetliners. Both aircraft are renowned for the technological advancements they introduced into the aerospace industry.
This week, Defense Secretary Ash Carter previewed the GFY2017 defense budget request in anticipation of the full release next week. According to Carter, the $583 billion budget takes a “long view” approach, as the U.S. prepares for challenges decades down the road. The planning of the budget was driven by several key factors including the rise of Russia and China, the threat of North Korea, Iran’s influence in the Gulf Coast, and the current fight against the Islamic State.