ITT Exelis’ Night Vision Business Seeks New Customers
Recent deals to supply night vision goggles to the Indian and Italian militaries have given executives at ITT Exelis reason for optimism at a time of declining U.S. Defense Department orders.
Like other major Pentagon contractors, Exelis is looking to substantially expand its international sales to offset cutbacks in U.S. military spending. Company officials said the demand for night vision technology around the world is growing. But Exelis’ future business also depends on changes to export policies that are intended to boost American arms manufacturers’ overseas sales.
The United States remains the world’s largest buyer of military equipment, but sales of night vision equipment are picking up in Europe and the Middle East, said David Smith, ITT Exelis vice president for night vision business development, based in Roanoke, Va.
The company announced this month that it received a contract from Selex ES to manufacture several hundred i-Aware night vision goggles for the Italian army. Unlike conventional goggles, these connect the soldier to the tactical network. Users can receive and share video and still imagery.
Last year, Exelis formed ajoint venture with one of India’s largest military suppliers, Tata Advanced Systems Ltd., of Mumbai, to produce up to a half-million night vision goggles for that nation’s army.
That venture is “making slow and steady progress,” Smith said in a recent interview. “Everything in India [government procurement] is slow. When a solicitation comes out, you have to temper your expectations.”
The company anticipates that the deal with Selex will lead to bigger sales to the Italian and other governments, particularly in Europe, that are downsizing their armies but also are seeking to equip soldiers with more advanced equipment. The “network capable” goggle is an example of a piece of gear that allows a soldier to do multiple jobs, Smith said. “This is a trend worldwide,” he said. “Governments are emphasizing the need to be able to continue to meet their mission with fewer people. … They are looking for technology that allows a small force to do more.”
To compete internationally in the night vision market, however, Exelis needs U.S. government help. Exports of advanced military technology are highly controlled under the International Traffic in Army Regulations (ITAR) law. Some countries, when given the choice, prefer to buy equipment outside the ITAR regime, which imposes tight restrictions on access and transfer of technology. “We are seeing a lot of [potential buyers] in the international community saying that they don't like being told what they can receive, what level of technology they can buy,” Smith said. “They are increasingly investing in technologies that are not ITAR restricted,” he said. “We want a level competitive playing field.”
The Obama administration has spearheaded sweeping reforms to the export control regime. But when it comes to sensitive technologies such as night vision, products with the highest levels of performance are not exportable.
“The Defense Department is working with industry to smartly review export policies,” Smith said.
Exelis’ biggest customer for night vision systems, the U.S. Army, has dramatically slowed purchases of goggles in recent years as a result of troop drawdowns in Iraq and Afghanistan. Over the past 18 months, the company downsized its workforce in Roanoke by several hundred employees, although it has sought to preserve experienced engineers who will be needed to develop and build the next generation of goggles for the U.S. military.
The newest night vision goggles that the U.S. Army is purchasing are “sensor fusion” devices that overlay thermal imagery on top of the traditional amber/green display. This is significant, as it allows soldiers to spot adversaries hiding behind dense foliage.The Army calls these “enhanced night vision goggles,” or ENVG, which can import and export imagery, video and data.
Exelis and L-3 have received Army contracts to produce ENVGs. The program, though, is in a “state of flux” as the Army determines its future. ENVG has endured growing pains over the past four years. Current “analog” fusion devices do not pipe data into the soldier’s radio, and the Army would like to move to digital versions. Exelis is producing digital ENVGs, but the technology is not advancing as quickly as the Army had predicted.
Smith said additional government funding is needed to move the technology forward. “We would like to see more investment from the U.S. government on next generation technology,” he said. “Everyone has been working on digital night vision for a while,” he added. “The technology is not where it needs to be. With more investment from the customer, it's possible to accelerate the advancement of digital goggles.” Exelis has adapted the analog system and gave it a digital capability to move information around, but the Army ultimately wants a purely digital ENVG. That will require manufacturers to reduce the devices’ size, weight and power demands.
Companies are investing research-and-development dollars into these technologies, Smith said, but that is not enough, especially in complex systems such as sensor-fusion night vision. Exelis would like to see the government not only increase funding for research but also communicate to industry its future needs so companies know where to invest, Smith said. “We would like to see co-investment with industry in advance of their [the Army’s] needs,” he said. “For industry to continue to do this we need a commitment on the part of the customer.”
Photo Credit: ITT Exelis
Topics: Business Trends, Business Development, Doing Business with the Government, International