AUSA Day Special Show Coverage 3 Defense Daily® Balance Is Critical To Future Force, Day 3 • Wednesday • Top Army Leaders Say October 24, 2012 By Ann Roosevelt Schedule Of Events Army Secretary John McHugh and Army Chief of Staff Gen. Ray Odierno say balance between the active Army and reserve forces is critical as the service faces 0800-1800 AUSA REGISTRATION DESK/AUSA TICKET an uncertain financial future and increasingly complex operating environment. PICKUP OPEN McHugh said he signed a directive to create “a total force” that would “lead Convention Center East Registration 0700-0900 into resourcing and budget decisions,” as part of the effort to keep the balance FIRST REGION AND EUROPEAN between active and reserve components. DEparTMENT BREAKfasT MEETING ROOM “If the army experiences further decrements, naturally we’ll look at the total 147 A AND B (BY INVITATION ONLy – ID BADGE REQUIRED) Army to see how best to distribute this,” McHugh said at a news conference on 0700-0830 Monday, the first day of the three-day Association of the United States Army SECOND REGION BREAKfasT MEETING annual conference. Room 146 C (By invitation only – ID badge required) Odierno said as the force structure was reduced in the first round of budget 0730-1000 cuts more was taken from the active component. THIRD REGION BREAKfasT MEETING Room 146 A (By invitation only – ID badge “Additional cuts will probably affect all of the components. We don’t know required) that. We don’t know how deep the cuts will be,” he said. 0700-0830 Odierno pointed out that the active force is ready to deploy quickly and FOURTH REGION BREAKfasT MEETING Room 146 B (By invitation only – ID badge handle complex missions, while the reserve force takes a little longer to be ready and required) generally handles fewer complex missions. 0730-1000 Commanders must always balance readiness, modernization and force struc- FIFTH REGION BREAKfasT MEETING Room 150 A (By invitation only – Id badge ture and maintain that balance over time, he said. “We need the right combination required) of active and reserve (components) as we go forward.” 0700-0900 SIXTH AND SEVENTH REGION BREAKfasT Looking into a very uncertain future, Odierno said, “What I’m focused on is MEETING having an Army that can deploy at several speeds, that can deploy in several sizes” Room 151 B (By invitation only – ID badge and deploy for different missions. required) 0700-0900 McHugh said, “The key to the future is our full spectrum capabilities and our PACIFIC REGION BREAKfasT MEETING capability to go anywhere and do any mission.” Room 151 A (By invitation only – ID badge He also pointed out that the Army is a full partner in the Air Sea Battle con- required) 0800-0915 cept, which is “more than a battle concept.” The land service has a role beyond SENIOR EXECUTIVE SERVICE SEMINAR soldiers populating various Pentagon offices where Air Force and Navy officers Congressional Hall A, Renaissance Hotel (By invitation only) are examining and fleshing out the concept. Air Sea Battle also is about building 0900-1100 relationships and partnerships with other nations and regions, something the Army PRE-RETIREMENT/SURVIVOR BENEFIT PLAN BRIEFING Room 103 B ▶ continued on page 3 ▶ continued on page 6 Visit us at AUSA booth 4205. Also check us out at www.defensedaily.com for additional show coverage. © 2012 by Access Intelligence, LLC. Federal copyright law prohibits unauthorized reproduction by any means and imposes fines of up to $100,000 for violations. Forged from more than 500 years of innovative heritage, a new Alliance brings our warfi ghters the most advanced and integrated weapon systems and services. Beretta Defense Technologies— Your First Line of Defense. October 24, 2012 Defense Daily 3 ▶ continued from page 1 has long been doing around the world. Responding to several questions about sequestration, both leaders said they don’t know the ramifications of such across the board cuts. However, the Army would have “no flexibility at all,” McHugh said. What makes it a problem is not only cuts, but also the way it is a “salami slice” across all Army programs. The Army is, after all, a multi-billion business with contracts to honor. The concern is not the size of the cuts, but how they would be implemented. And there is a confluence of other factors to consider, potentially the debt limit will come up again, the Bush- era tax cuts could expire and sequestration are all converging. But the impact is unknown. McHugh added that working the financial issues is “mathematically easy.” The problem is what is the impact in fiscal year 2013 and beyond. n SAAB North America Plans To Expand In North America By Ann Roosevelt SAAB North America has been doing business in the United States for 50 years and is expecting to expand its North American operations, building on strong relationships with U.S. industry and the cordial relations between Sweden and the United States, officials said “Look at the pure size of the defense market--the U.S. defense market is 50 percent of the rest of the world and you see the sheer volume of opportunity here,” said Wes Walters, executive vice president, Sales and Marketing for Saab North America. “We have to be here.” “We have some competitive products and our plan is to grow in the U.S…as the company has a very small presence here…through acquisition and organic growth,” he said in an interview with Defense Daily. In business since 1937, Sweden’s Saab AB has operations in more than 100 countries, with about 13,000 employees--more than 800 in the United States--and annual sales of $4 billion, John Belanger, vice president of corporate communications for Saab North America, said. In the United States in 2011, sales were about $270 mil- lion. This year, the company will probably be close to $500 million in order intake. Walters said Saab North America has seven offices in the United States and two in Canada. In the United States, sites include Saab Training USA LLC in Orlando, Fla., co-located with its largest customer, the Program Executive Office for Simulation, Training and Instrumentation. “We have a very robust product line, which is in the U.S. inventory.” Another example is a manufacturing plant in Lillington, N. C., Saab Barracuda. The facility makes all the camouflage for the U.S. Army and Marines, and at the height of recent conflicts was producing 10,000 systems per month. Considering growth, Saab North America recently acquired SENSIS, in Syracuse, N.Y., and other locations. “Our radar was selected for (Littoral Combat Ship) LCS,” he said. They also have land radars used in Iraq. The company is heavily involved in land and naval systems, with perhaps the least impact on the air side, Walters said. However, the company is a major supplier to Boeing [BA] on the Dreamliner. The company looks at niche areas, such as shoulder-fired weapons. Saab built 600,000 of them in the early 1980s. One, the Carl-Gustaf, is going strong, and is in use by special operations forces, Navy SEALS, Marines, and Army Special Forces. In late September, Saab signed a $31 million contract with the Army to supply the weapons, responding to an urgent need from Afghanistan (Defense Daily, Sept. 27). “We don’t stop developing, about 20 percent of our sales go back to internal R&D,” Walters said. “We have a large number of products developed and sitting on the shelf that with very little tweaking” can be used as a solu- tion. If a government doesn’t have a lot of money to invest, it can use an 80 percent solution and start operating right away. The next generation Carl-Gustaf is already in process, expecting to be seven pounds lighter and using next- generation munitions. “What we see as an advantage for us is that we’re not greatly invested in R&D in the U.S. market. We have products already developed,” Belanger said. “We’re small fish in the big sea over here. If we get a small percentage of business in the market,” it’s a large piece of business because the market is so large. Parent company SAAB AB two years ago decided “to go all in,” and go for market expansion, Belanger said. www.defensedaily.com 4 Defense Daily October 24, 2012 For example, Saab North America “set a goal to do more than $1 billion in revenue by the end of 2016,” he said. “Looking at the progression, we’re well on the way to meeting that goal, combining organic growth as well as strategic acquisitions.” Walters noted the company teams with prime contractors, finding niche areas and areas where technology can help with what primes offer. He doesn’t see Saab as a competitor to those large defense companies, but as a techni- cal partner. Meanwhile, “there’s a sea change for the group in the way it does business,” Belanger said. Saab AB is moving to a more market-based organic structure, he said. Last year, a successful experiment in this area encouraged the CEO and Board of Directors to decide that, as of Jan. 1, there will be six market areas in the company, such as Europe, the Middle East, Asia-Pacific, and the Nordic area. This is really an evolution, he said. Companies need to be where the customers are to do business, with a local presence and an ability to transfer technology. U.K.-based BAE Systems did something similar not long ago, he added. “We’re here.