Fuzing Industrial Baseand
Market OverviewIndustrial Committee of Ammunition Producers
February 12, 2002
Agenda
• Fuze Industrial Base Members
• Market and Customer Characteristics
• Fuze Base Member Profiles and Programs
• Issues
Defense IndustryFuzing Industry Consolidation (1992 – 2001)
•Kodak•Motorola•Sooner
•Fairchild•Hamilton•Accudyne
•Piqua•ISC•BEI
•Allied Signal•Magnavox
•Waltham Watch•Rixon
•Bowman•Westclock
•GE•General Time
•AAI•Aerosonics
•Lockheed Electronics
•Bendix•Raytheon•Ramtec
•Texas Instruments•Micronics
•Pocal•Loral
•Quantic•Action Manufacturing
•EMCO•Alliant Precision Fuze
Company, LLC•Raymond Engineering
•Dayron•Bulova Technologies
•EDI/ L3•Primex•Amtech
•KDI Precision Products, Inc
Action Manufacturing
Alliant Precision Fuze Company, LLC
Dayron
Kaman Aerospace / Raymond Engineering
L-3 / BT Fuze Products
L-3 / EDI
L-3 / KDI Precision Products
Martin Electronics
Market Characteristics
• Buyers Divided Between U.S. Department of Defense and Major Weapon System Primes
• Addressable U.S. Fuze Market is $200M - $250M per Year
• Foreign Sales (Direct) Difficult Due to:– Low Cost, Low Performance Indigenous Competition– “Fortress Europe” Mentality for Major Weapon Systems– FMS Complications– U.S. Department of State Export Restrictions
Fuzing Supplier Characteristics
• Combination of Private and Public Companies• Range of Fuzing Revenues From $6M - $75M• Fuzing May or May Not Be Dominant Business
Area (Revenue)• Weapon Prime Contractors All Have Some Fuzing
Capabilities (Not Addressed)• Several Single Product Suppliers Exist (Not
Addressed)
Company Profiles
Action Manufacturing Company• Charter:
– Manufacturer of electro-mechanical rocket, artillery and mortar fuzes for U.S. Army & Navy, domestic prime contractors and the State Department approved foreign customers
• History– Manufacturer of electro-mechanical
rocket, artillery and mortar fuzes for U.S. Army & Navy, domestic prime contractors and the State Department approved foreign customers
• Today– Privately owned, small business with
215 employees– Two Divisions - Fuzes in Philadelphia
and Explosive / Pyrotechnics in Atglen, PA
– CY 2001 Fuzing Revenue - $13M
MK259 Smaw FuzeMK420 Smaw Fuze
Shoulder Launched Weapons
M557 FuzeM572 FuzeM739A1 FuzeMK407 Fuze
Artillery & Naval Guns
Mortars
M935 FuzeM567 FuzeM778 Fuze
BBU-36/BCCU-44/BM796
Chaff Flare & Bomb Rack
RAAMVolcano
M48M55M69M84M100Piston Actuator
Anti-Tank Systems
Detonators & Actuators
ACTION FUZE & SAFE/ARMING DEVICESAND PYROTECHNICS
M509 A2M530 A1
Tank Ammunition
2.75 Inch Rocket SystemM423 S & AM423 FuzeM439 Rocket FuzeM230 Grenade FuzeM231 Practice Fuze
40mmPractice
MFG. CO.
ATK Precision Fuze CompanyCompany Overview
3 Locations Headquarters & Production in Janesville, WI Research & Development Center in Plymouth, MN Power Source Development & Production in Horsham, PA
Approx. 200,000 Square feet of floor-space
Approx. 400 employees
~ $65M in fuzing sales
Extensive Development, Laboratory, Testing & Production facilities
ISO 9001 Certified
ATK Precision Fuze CoCustomers/Programs
Customer ProgramAir Force Hard Target Smart Fuze
DSU-33 Proximity SensorMulti-Event Hard Target Fuze
Navy Multi-Function FuzeAdvanced Swimmer Delivery System Power Source
Army Electronic Time Fuze for MortarsProgrammable Inductive Artillery Fuze SetterS&A for M734A1 (Supplier to L-3/KDI)MOFA Battery (Supplier to L-3/KDI)M767/762 Battery (Supplier to L-3/Bulova)Selectable Light Attack Munition
Primes BAT ESADProgrammable Integrated Ordnance SuiteTactical Munition Dispenser FuzeFZU-39 Proximity SensorCrusader Fuze Setter
International FMU-139XM780
Dayron Overview
• Location - Orlando, Florida• Size - 90,000 Square Feet• Employees - 150• Fuzing Related Sales in 2001
– Approximately $18 Million
Dayron’s Principal Customers / Products
• U.S. Army– M549 - 40mm Grenade Fuze– M549A1 - 40mm Grenade Fuze– M550 - 40 mm Grenade Fuze
• U.S. Air Force & Navy– FMU-143 - Penetrator Bomb Fuze– FMU-152 - Joint Programmable Fuze– FMU-156 - Warhead Fuze for JASSM Cruise Missile
Raymond Engineering Operations
• Company Overview– Location: Middletown, CT– Square footage: approx. 200,000– Employees: approx. 200– Fuzing sales: $20-30 million range
Raymond Engineering Operations
• Customers/Products – Ultimate Customer– AMRAAM – Air Force/Other– Harpoon – Navy– Standard Missile – Navy– Brimstone – Other– Maverick – Other– SLAM-ER – Navy– Hydrostatic – Navy– Penguin – Other– Tomahawk - Navy
BT Fuze ProductsCompany Overview
Ownership: Division of L-3 Communications Corp., FormerlyHamilton Technology/Bulova
Location: Lancaster, PAPlant: 135,000 sq. ft. mfg.; 10,000 sq. ft. warehousingEmployees: 250Fuze Related Sales (2001): $50M
BTFP Customers And Annual Revenue
U.S. Army: $28M
U.S. Air Force: $1M
U.S. Navy/Marines: $5M
Other (foreign/systems primes): $16M
L-3 CommunicationsElectrodynamics (EDI)
• Location: Rolling Meadows, IL (suburban Chicago)
• Facility: 50,000 square feet
• Employees: 206
• Fuzing Sales 2001: Approximately $6M
Customers
Customer Programs Prime Contractors
Blast Fragmentation Warhead Lockheed Martin
Hellfire / Longbow Lockheed Martin
U.S. Army
Mongoose Minefield Clearing System BAE Systems
U.S. Navy Blast Fragmentation Warhead Lockheed Martin
U.S. Air Force
Hellfire U.K. Apache Thales Air Defense
Hellfire / Longbow Foreign Lockheed Martin
Other
VT-1 Surface to Air Missile Thales Air Defense
L-3 Communications KDI Precision Products
• Location: Cincinnati, Ohio• Facilities: 236,000 Sq. Feet• Employees: 265• CY 2001 Fuzing Sales: $75M
L-3 CommunicationsKDI Precision Products
• Customers / Products– U.S. Army
• M734A1 Multi-option Fuze, Mortar • M782 Multi-option Fuze, Artillery• M783 Mortar Point Detonating Fuze• FMU-160 High Fragmentation Proximity Fuze (C-130 Gunship)• XM982 Excalibur S&A and Proximity Fuze (Raytheon)• Guided MLRS ESAD (Lockheed Martin)• PAC-3 ESAD (Lockheed Martin)• MLRS - ER S&A (Lockheed Martin)• Patriot S&A (Raytheon)• ATACMS ESAD (Lockheed Martin)• M114 S&A - TOW (Raytheon)• M234/M235 DPICM Self Destruct Fuze Production Automation
– U.S. Navy• AIM-9X Sidewinder ESAD (Raytheon)• Evolved Sea Sparrow Missile ESAD (Raytheon)• Joint Stand-off Weapon (JSOW) ESAD (Raytheon)• Extended Range Guided Projectile (ERGM) S&A• Mk 417 RF Proximity Fuze (5” Gunfire Projectile)
– Foreign• FMU-139 Air Dropped Bomb Fuze• HARPS Bomb Proximity Fuze
LOCATION: MEI’s facility is located approximately fifty (50) miles southeast of Tallahassee, Florida near the town of Perry.
FACILITY INFORMATION: MEI’s facility includes 1,040 acres and over 171,000 ft2 of improved buildings including 92,400 ft2 of manufacturing space, 41,000 ft2 of storage, and 37,600 ft2 space for engineering and administration support.
FUZE RELATED SALES: Year 2001 fuze related sales to HQ OSC (M228, M213 & M201A1) were approximately $9.0 M.
EMPLOYEES: Year 2001 average workforce consisted of 235 employees.
Fuzing Issues
Fuzing Concerns
Requirement for consolidation/coordination Some taken place, more required
Support Industrial base through split procurements
Movement to Total Systems Program Responsibility Means buying fuzes through Primes High risk for control of performance/safety and configuration
Velocity of Fuze Base IPT Initiatives well intended, but operating slower than market pace
Investment in Technology Have coordinated, open exchange of roadmaps Explore using Air Force model
Issues
• Many, if not all, in the “Fuze Industrial Base” depend heavily on profit from Foreign Sales to finance Capital Investments and provide the “staying power” to be viable members of a ready base. Government competition with industry for the FMS business is counter productive to strengthening the base.
• The Army must continue to improve its use of “Best Value” contracting as a means of preserving the industrial base and its critical technical know-how.
Raymond Engineering Operations
• Issues– Business volume and methods of procurement are
not attractive for business• New fuze business many times requires suppliers to
take enormous risks– Lack of R&D investment by U.S. Government to
Fuze suppliers– Difficult to attract and maintain engineering skills– Prime contractors doing more fuze work
BT Fuze Products Issues
• Not enough money to replenish aging stockpile• Support for North american Base only to restrict procurement in a
declining market• Sustaining a technology core in a declining market• New markets (smart weapons) controlled by large weapons primes
– Self facilitization required– Not directed by MILDEPS to solicit a “restricted base”
• No government funding for specialized capital equipment• Foreign competition, sometimes using U.S. technology• Lack of Army Customer appreciation of constricdting and
consolidating industry base• Multiple arsenal managers of government fuze programs• Heavy arsenal tax on production appropriations• Insufficient funding to sustain R&D engineering base
EDI Fuze Industry Issues
• New technologies utilized in fuze programs have limited application outside of fuze industry.
• Difficult for suppliers to justify IR&D investment in new technologies to advance the state of the art.
• Limited number of production programs will continue to lead to fewer viable suppliers who can commit to required levels of support and technical expertise.
• Need for levels of NRE funding which make development of new technology financially viable and attractive to capable potential suppliers.
KDI Precision Products
• Issues– Stop Government from Competing with Industry on Fuze
Development Programs• Define Requirements• Approve Safety• Pursue Far Horizon Technology
– Award True Multi-year Production Contracts– Don’t Reduce the Rewards for Competitive Performance by
Splitting (Rare) Production Contracts– Pool DOD wide Fuzing S&T Money Where Common Fuzing
Solutions Are Possible– Encourage “Build to Spec” Procurements
KEY ISSUES:
• Lack of domestic suppliers for critical components
• Weak customer support for true IPT commitment
Key Fuze Related Issues in 2002
Munitions Industrial Base Task Force
• Issue– Lack of Funding for Fuze RDT&E
• Impact– Available Technology is not Applied to
Weapons Systems– Weapon Functionality Less Than Could be
Realized