RichardAboulafia.com 

:: January 2011 Letter ::

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Dear Fellow Defense Budget Worrywarts,

The word “exquisite” usually connotes good things – beautiful, ornate, something expensive that rescues us from doom on Valentine’s Day, etc. But in the new parlance of our budget-conscious times, DoD has given the word a new and unwelcome meaning. As with the Lord of the Rings term My Precious, exquisite is a pretty word that suddenly has a sinister meaning.

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.

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 aeronautical menagerie that the USAF and blue water USN were forced to abandon years ago (see my October 2010 letter for more on this). The long wait for these new systems means the USMC has had to operate its equally expensive past generation of equipment – CH-46, AV-8B, EA-6B, the Amphibious Assault Vehicle – far longer than planned. With their high operating costs and very limited user group, these have become retro-exquisite legacies.

How did these costly USMC plans survive? It’s been a long road. After their legendary beach assaults in World War 2 and Korea, the Marines spent decades thinking large-scale amphibious operations would one day be relevant again. In the ‘70s and ‘80s they were largely marginalized by the Army/USAF role in the all-important NATO/Warsaw Pact confrontation. In the first Iraq War, the USMC hoped for a Kuwait landing, but the fast progress of ground forces obviated that idea. So, “the death of the EFV is a blow to the psyche of the corps,” noted Politico.com. And for a service that prides itself on its people, the USMC got awfully dependent on hardware for its self-image.

Over the past decade the USMC found salvation through a very different mission. They’ve become quite adept at counter-insurgency warfare (COIN), a people-intensive skill learned in Vietnam and countless small wars before that. The Marines’ impressive work in Afghanistan, a country not known for beachfront property, and in the Iraqi cities of Fallujah and Ramadi, have allowed the Marines to defend their large budget and force structure. Ironically, these landlocked missions, plus an extremely strong group of congressional supporters, has let the USMC keep their cherished amphibious plans intact.

But today, the US is out of Iraq, it will be out of Afghanistan in a few years, and large-scale COIN operations look very 2001-2011. Meanwhile, some key members of that USMC congressional caucus are gone, particularly Jack Murtha. This force’s most cherished systems could easily become someone else’s bill-payers.

While killing the EFV, SecDef Gates also put the F-35B on double secret probation, which could easily be a prelude to something much worse. The Simpson-Bowles deficit reduction commission recommends axing it altogether. Simpson-Bowles also recommended capping the V-22 program at its currently-funded level (around 250 MV-22s).

The problem is that it’s difficult to take a small bite out of a bubble. All of these USMC systems kind of reinforced each other. Ending the V-22 would mean taking H-60s, yet the completely insane UH-1Y program only made sense as a way to avoid taking any H-60s, so it could die too. Killing the F-35B means the service could take F/A-18E/Fs. If the USMC takes F/A-18E/Fs, it can take EA-18Gs, obviating the need for EA-6Bs or an F-35B jammer variant. If there’s no F-35B, the service may as well retire its AV-8Bs, a conclusion the UK reluctantly reached last year with its Harrier fleet. That means depending on big carriers for air support, just like before the Harrier changed everything.

Another problem concerns scale. Many of the systems in question were designed for the ultimate amphibious landing. They added speed and range, allowing an attacking force’s ships to stay further away from coastal defenses. Yet “exquisite” connotes smallness, and in these cases that’s accurate. Add up the planned deployable lift capacity of EFVs, V-22s, UH-1Ys, etc., and you’re talking about a few battalions, at most. With a limited amphibious assault capability like this, we’re a long way from Inchon, let alone Iwo Jima. We’re closer to Grenada. On the positive side, replacing exquisite stuff with workaday equipment would protect force structure. Each V-22 pays for one larger CH-53 and one smaller H-60, a considerable gain in lift.

Teal Group’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. Rolls-Royce, the V-22 engine and F-35B lift fan maker, would take the second biggest hit. Sikorsky would gain most, with a likely H-60 acquisition and a greater need for the CH-53K if V-22 goes. For Lockheed Martin and Boeing, Marine systems are neutral. Killing the F-35B would increase F-35C requirements (and possibly help stabilize the program). Boeing would lose the V-22, but probably gain F/A-18E/F/G work if F-35B died.

Criticizing USMC systems in fiscally constrained times isn’t hard. Their price tags alone make you think “exquisite.” Also, aside from SOCOM’s CV-22s, nobody else is going to buy these things, and their export potential is extremely limited. But I’ll offer a limited defense. All people who love aviation can agree: aircraft that combine vertical and horizontal flight are the coolest things, ever. That means V/STOL and STOVL jets, and tiltrotors. They may be exquisite, but they’ve always implied a new gilded era of military capability and civil transport convenience, the World of Tomorrow. (For an interesting pro-V-22 history, see Richard Whittle’s Dream Machine, published last year).

While credit goes to the UK for creating Harrier, it’s the USMC that’s provided 95+% of the R&D cash for vertical/horizontal systems for the past 40 years. They just might not be able to buy very many of them. And if they can’t, no one can. There’s something rather sad about that.

Once again, our future ain’t what it used to be. Until it is again, Teal’s January Aircraft updates include the MiG-29, ERJ 145, AW 101, S-92, C-212, Superjet, and the DoD contracts appendix. Have a great month.

Yours, ‘Til We Hear The Term “Exquisite Corpse Programs,”
Richard Aboulafia
 

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