News Briefs – October 26, 2016


USS Wasp to move from Virginia to Japan

The amphibious assault ship USS Wasp will be moving from Norfolk, Va., to Sasebo, Japan, next year.
The U.S. Navy said in a news release Oct. 24 that the move is part of a rebalancing strategy to increase its presence in the Pacific. It will be part of the U.S. 7th Fleet Forward Deployed Naval Forces.
U.S. Fleet Forces Command did not release a detailed timeline for the move, but said that it’s expected to occur in 2017.
The Wasp arrived in Greece for a port visit Oct. 24 after spending the past four months at sea. Jets aboard the ship have been conducting strikes against the Islamic State group in Libya. AP

If Raytheon gets jet contract, assembly plant in Mississippi

Raytheon says that if it gets an Air Force contract to build 350 training jets, its assembly plant will be in Mississippi.
The Waltham, Mass.,-based company announced Oct. 24 that it has a shovel-ready site in Meridian.
“We anticipate the Meridian facility will create hundreds of new jobs,” spokesman B.J. Boling said in an email.
A Raytheon radar factory in Forest, Miss., has about 800 employees, according to a news release from Mississippi’s congressional delegation.
Three other international partnerships are competing: Northrop Grumman and BAE Systems; Boeing and Saab AB; and Lockheed Martin and Korean Aerospace Industries Ltd.
Raytheon’s principal partners are Leonardo-Finmeccanica, CAE USA and Honeywell Aerospace.
The Air Force has said it expects to award contracts next fall. It is expected to formally ask for proposals in December, Boling wrote.
Boeing and Northrop Grumman say they have built all-new planes for the competition. Lockheed Martin and Raytheon say their entries are upgrades of existing planes.
The Air Force released requirements for what it calls the T-X trainer project in March. The current trainer, Northrop Grumman’s T-38, was first built in 1961. It can be used to teach only six of 18 advanced pilot training tasks, and fewer than 75 percent of the 431 planes are usable, the Air Force said.
“New, cutting-edge training aircraft are critical to our national security, and I am confident that Mississippi workers can help provide those planes,” U.S. Sen. Thad Cochran, a Republican and chairman of the Senate Appropriations Committee and its defense subcommittee, said in the delegation’s news release. “I look forward to this competition and I am excited that Meridian may play an expanded role in defense of our nation.”
Other members of Mississippi’s delegation were equally enthusiastic.
“Mississippi’s talent base is as skilled and prepared for high-tech manufacturing jobs as any in the nation and this is further proof of that,” said Rep. Bennie G. Thompson, a Democrat. AP

Rockwell Collins to buy B/E Aerospace for $6.4 billion

The move by Rockwell Collins Inc. to buy B/E Aerospace Inc. will combine two of the biggest suppliers to airplane makers and airlines.
Rockwell announced Oct. 23 that it will pay $6.4 billion to buy its rival, a 22.5 percent premium over B/E’s closing stock price Oct. 21.
In afternoon trading Oct. 24, shares of Rockwell fell almost 6 percent while B/E shares jumped almost 16 percent.
Rockwell said the deal will diversify its offerings to plane manufacturers and airlines. Rockwell sells avionics and electronics systems used in airline, business and military jets. B/E, based in Wellington, Florida, makes aircraft cabin interiors including seating, storage and lavatory systems.
Rockwell Collins, which is based in Cedar Rapids, Iowa, said that with B/E, it will nearly double the value of systems it sells for new single-aisle planes by Boeing and Airbus and triple its components in bigger two-aisle planes that are often used on international routes.
The stock and cash deal needs approval by shareholders of both companies and by regulators. It is expected to close next spring.
Raymond James analyst Harry Breach said the sale added to a slowly rising number of deals in the aerospace industry, including recent Rockwell acquisitions to add expertise in in-flight connectivity and entertainment. Still, Breach said, despite expected cost savings from combining Rockwell and B/E, “we cannot clearly see the strategic synergy here.”
Cowen and Co. analyst Cai von Rumohr called the deal “a good fit” but said it was “a bit pricey.” He said B/E’s strong relationships with airline customers would complement Rockwell’s strength with business jet and military customers.
Rockwell said the deal will save about $160 million in overlapping spending and boost earnings per share within a year. If the deal is completed, Rockwell will have nearly 30,000 employees about $8 billion in annual revenue.
Rockwell will pay $34.10 in cash and $27.90 in its stock for each B/E share. It will also assume $1.9 billion in B/E debt. AP