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Defense business brief: Army IED hunters leave the Middle East. Senate approves takeover tax. The Department of Defense invests in a black powder plant. more.

A year after the chaotic U.S. withdrawal from Afghanistan, there is another example of how the Pentagon’s future priorities are shifting away from fighting insurgents.

A small fleet of Army Dash-8 reconnaissance planes, which have been searching for roadside bombs over Afghanistan and Iraq for more than a decade, completed their final mission for U.S. Central Command on July 31, the service said this week.

The fleet, controlled by the defense company Leidos, was equipped with hyperspectral, electro-optical/infrared, and high-resolution imaging sensors. The Army is now considering “moving the sensor function to other efforts.”

The aircraft “has proven to be one of CENTCOM’s most popular assets,” which oversees US military operations in the Middle East and Afghanistan, the Army said in a statement.

In recent years, the Pentagon has moved away from weapons designed for counterinsurgency and toward new types of technology aimed at countering China.

The Inflation Control Act passed by the Senate, A stripped-down version of President Biden’s Build Back Better social safety net includes a 1% excise tax on stock buybacks. Senate Finance Committee Chairman Ron Wyden, who drafted the bill, said in a statement that the tax would “encourage large corporations to invest in their employees rather than wealthy managers and shareholders.”

Capital Alpha Partners analyst James Russier said in an August 5 note to investors, “The excise tax on share buybacks is the tax efficiency of returning capital to investors in this way.” a little lower,” he wrote.

Here’s how much defense companies have spent on share buybacks in the first six months of 2022.

Lockheed Martin: $2.4 billion

Raytheon Technologies: $1.8 billion

Northrop Grumman: $640 million

General Dynamics: $1.1 billion

L3Harris Technologies: $729 million

Boeing: None

But even if a buyback tax were enacted, we wouldn’t expect much change in share buybacks. Byron Callan, an analyst at Capital Alpha Partners, said in his Aug. 7 note to investors, “Even if excise taxes on share buybacks were enacted, I don’t think management would curb these. ‘ said.

The Senate bill Include language that allows companies to write off R&D expenses. But there is still hope that lawmakers will pass the bill later this year.

According to accounting firm Grant Thornton, “While there remains significant bipartisan support for restoring full cost coverage back to 2022, the provision still requires legislative action.” “The best opportunity may be a year-end bipartisan agreement on other expiring and expiring tax ‘extender’ provisions. “

The Pentagon announced this week that it will invest $3.5 million A Louisiana plant that produces black powder used as a weapon propellant.

“A $3.5 million investment by the Department of Defense will allow the Estes Energetics-owned facility to restart through its Goex subsidiary after production was halted in the accident,” the Department of Defense said. “The total cost of the project is $5.3 million over two years, and he will be able to resume production at our Minden, Louisiana facility within two years.”

The Pentagon said the funding will allow Goex to hire up to 30 additional workers. Black power is used in cannons, firearms, rockets, pyrotechnics and other weapon systems.

Northrop Grumman partners with Firefly Aerospace Replacing Russian and Ukrainian engines in Antares rockets with motors from American start-ups. Northrop Vice President and General Manager Scott Rea, Launch and Missile Defense Systems, said in a statement.

make a move

Named by the Aerospace Industry Association Stephen Jordan Tomaszewski Senior Director of the National Security Space. According to the AIA, Tomaszewski previously worked for The Aerospace Corporation, “providing objective technical advice to senior DoD officials in the Office of the Undersecretary of Defense for Information Security.”

Barry PavelA founding director of the Atlantic Council’s Scowcroft Center, he will leave the think tank to join RAND Corporation as vice president and head of the National Security Research Division. Matthew Kronig The Atlantic Council said in an email that it will become the acting director of the Scowcroft Center while it searches for a permanent director.

Fix: Due to an editorial error, last week’s Defense Business Brief incorrectly stated that the 2021 F-35 sale to Finland had failed. The web version of the newsletter has been updated.


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