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Friday, February 1, 2013

Elbit’s Vision Past the Fiscal Cliff

Elbit Systems has carved a niche for itself in the military aviation market through some shrewd acquisitions and joint ventures. But will these specialist skills be enough to take it forward at a similar pace?

By Andrew Drwiega, Military Editor

Raanan Horowitz

Software, sensors and iPads. Raanan Horowitz, president and chief executive officer of Elbit Systems of America (ESA), covers all three in the first five minutes of our conversation during last year’s annual Army exposition, AUSA, in Washington, D.C. The way ahead for rotorcraft innovation, he confirms, is the simplification of technology with the integration of systems in a user-friendly way.

Horowitz believes that avionics systems, particularly button driven digital displays, need to adapt to how the civil market has developed products such as the iPad, and how ease of use has led to a large market surge for them. 

Concept for fixed-wing fighter aircraft configuration of Elbit’s CockpitNG, which also has a helicopter version.
“When you look at the technology around iPhone/iPad you see the convergence into one device of what you used to do with multiple devices—phone, computer, even your daily newspaper. What we said was that for a fighter aircraft or helicopter, let’s do the same thing. The issue is the convergence and fusion of all these things. You take all the sensor information and implications and you bring it to a screen and present it with a man-machine interface that is very intuitive—as that is what young, new, upcoming pilots expect. It is time to take advantage of the fact that everybody now uses these devices so why not bring them to the screen in the helicopter cockpit.” Touchscreen displays such as those in the latest CockpitNG offering are part of his company’s answer.

 

Finding Solutions Beyond the Fiscal Crisis

As the defense industry in the United States exhales following the government’s temporary step-back from the “fiscal cliff” edge, it is more like a few gasps in preparation for what may be yet to come. Although it is the American global corporations that may be better prepared to weather the storm through their diverse market offering, what of those with foreign heritage that become established within the U.S. defense sector with the prime reason of gaining market share? 

Horowitz’ ESA is one such organization with strong links to the helicopter market, although not exclusively by a good measure. ESA was established in 1980 as a subsidiary of Elbit Systems Ltd, (listed on the U.S. NASDAQ and Israeli TASE stock exchanges). Elbit has grown into a $1 billion company of which around $300 million derives from its airborne business, of which ESA plays a significant role.

The relationship with Elbit in Israel is governed by the same rules that apply to other companies that can trace a foreign heritage. “If we have an Israeli teammate come over to us, we have to put a visit request in seven days ahead of time stating what we want to talk about. BAE Systems have the same systems,” said Robert Waage, ESA’s director of business development for Airborne Solutions. There is a legal separation that is designed to provide assurances of sensitive information.

Panoramic HD large area display from Elbit Systems.
Waage makes no secret of the importance of the U.S. market to the entire Elbit organization: “Thirty percent of our business is dependent on the U.S. defense sector, even more than the 21 percent represented by the Israeli market.” The Europe market accounts for 25 percent “with the rest of the world is slightly behind that figure at 24 percent.”

As with the rest of the defense industry, those responsible for the future development of Elbit have been watching developing markets with opportunities identified in South America and Asia; Brazil and India, respectively although there is also promise in others including Australia and Korea (where the company won a $62-million contract last year to upgrade the military’s C-130 fleet including its own glass cockpit digital flight displays).

Kelly Dameron is vice president of Airborne Solutions and sees the current challenges over defense budgeting reflecting in the new attitudes to business strategies, particularly the pressure to continue corporate growth: “It is tough to integrate acquisitions. Resources in companies are thinner than before. To survive and flourish, organizations need to be more agile and flexible than ever before and become more generalist to execute opportunities arise.”

He comments on the progressive expansion of ESA in Fort Worth. “The company has grown quickly: we learned engineering in the 1980s and business development in the 90s. Without doubt having a partner company in Israel has been of significant benefit to ESA, especially with their military forces operating similar weapons systems, such as the Apache and Cobra helicopters.” Both he and Waage independently point to a change of direction not only in ESA’s business structure but also how the rest of the industry is viewing them.

“We carved ourselves a place on the block with the Apache IHADSS HMD-EM Tracker and Central Mission Processor. ESA moved from supplier to strategic partner,” stated Waage. The M142 integrated helmet and display sight system (IHDSS) has been an integral part of the Boeing Apache’s systems since the U.S. Army introduced the attack helicopter in 1984. The IHADSS integrates the flight crew with the aircraft’s systems through a monocular eyepiece. By using electro-magnetic tracker technology in conjunction with weapon sensors in the aircraft’s nose the flight crew is able to utilize head movements for increased tactical situational awareness (Heads up, eyes out).

Dameron observes that in completing the acquisition from Honeywell for helmet display products, although ESA didn’t have a large workforce initially it focused on spreading best practice and blending an understanding of operational requirements with technical development. 

Elbit Systems of America (ESA) helmet-mounted display (HMD).
Another important step for ESA came in 1996, when Elbit and Rockwell Collins created a joint venture company called Vision Systems International (VSI). Together with Helmet Integrated Systems, they produced the helmet-mounted display system (HMDS) for the F-35 Joint Strike Fighter delivering to the pilot day/night and the Joint Helmet Mounted Cueing System (JHMCS) for the U.S. tactical jet fleets. In 2012, VSI was awarded $32 million to supply Boeing with its joint helmet mounted cueing system (JHMCS) for foreign military sales (FMS) to countries that included Finland, Australia, Belgium, Canada and Switzerland.

Elbit is also ambitious about its day/night degraded visual environment (DVE) solution, JedEyes wide field-of-view helmet system and QuadEye night vision cueing and display (NVCD). Horowitz said that the U.S. Army recently flew with the prototype JedEye helmet: “The Army funded their part and Boeing brought in their helicopter and we gave feedback to both—that is what we like to do.” With brownout still an ever-present danger to helicopter aviators, and with aircraft being lost on a regular basis, a solution to the problem is high on the Army’s priorities.

Rotary Opportunities

Waage believes that the Armed Aerial Scout (AAS) competition will be a keen one with America Eurocopter pushing hard. “We have the entire cockpit on the EC configuration, and on the MD540F we have the helmet display. But we supply across many of the competitive OEMs.”

ESA also has a keen interest in another Army program, one that focuses on the UH-60L Black Hawk cockpit digitization update. “The U.S. Army is looking at a UH-60L cockpit digitization upgrade for part of their fleet. While the eventual aim is to have 800 UH-60 Mike models, the M-like L models will be more digitally equipped aircraft in the field quicker and cut down transition costs in terms of crew training.”

What many people don’t realize is that a Mike UH-60 is marginally slower than a Lima Black Hawk. While newly designed blades mean the aircraft can carry more, on average it is around 10 knots slower. The Mike-like configuration would probably be slightly faster due to the replacement of analogue systems with digital. A discussion within the ESA team, several ex-military pilots such as Dennis MacIntire, director of business development for Airborne Solutions—an ex CW-5—regarding the merits of getting to the action with more time-on-target, while the Dustoff supporters emphasized the need for speed to get to and extract back to base injured servicemen as quickly as possible.

Last year Boeing’s new Apache E (previously Block III) began rolling out to U.S. Army aviation with the promise of a new ESA developed mission processor. The $17.5-million contract over five years will help to future-proof its networking and on-board computing capabilities during the new model’s lifecycle. Holding the responsibility for the ongoing upgrade of the nerve center in the middle of arguably the world’s most effective and proven attack helicopter is one that all take pride in.

“The Service and Support business unit has also grown to be a major factor in company turnover,” adds MacIntire. “Service and Support is one of our shining stars. We take a look at systems abandoned by manufacturers and through reverse engineering we can breathe new life into them.” Waage explained the ESA’s business outside of the US Defense department. “Commercial Aviation Business Unit runs out of Merrimack, New Hampshire and their primary market driver is the Enhanced Vision Systems for business jets-airline transport platforms allowing them to fly to lower minimum altitudes when approaching to land.

Another area in which Elbit is expanding, highlighted by Horowitz, is that of Homeland Security. It has submitted a significant proposal to the U.S. Border Patrol.

Although the company’s involvement in supplying equipment for Israel’s own border protection, particularly recently, has attracted international criticism, its lessons learned are fed back into suggested methods and technologies that might adopted on the southern borders of the U.S. “Our proposal to the Border Patrol for a large installation of towers, sensors and command and control and capabilities that will help monitor that border,” he said.

“What is the initial cost to put those systems together? It is costly but not cost prohibitive. But what is the cost of operation over many years. That is where I believe we have an advantage due to the operational concepts we have developed and capabilities and I believe we have ways to reduce the long-term operating costs.”

In conclusion, Horowitz said that the major challenge facing everyone in defense was to keep research and development (R&D) alive, together with military-industry dialogue that has resulted in the closer cooperation between the two while supporting the wars in Iraq and Afghanistan. He suggested the danger of pullback in both areas if budget limitations really took hold—something that would be very negative from all sides.

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