Defense Business Brief: JUST IN: Boeing suspends vax mandate; NDAA clears Congress; UAE’s F-35 hardball; and more.

JUST IN: Boeing has suspended its requirement that its employees get vaccinated against COVID, which was itself a response to the White House’s September mandate that all federal contractors vaccinate their workforces by January, the company said. Boeing says more than 92 percent of its 140,000 workers are either vaccinated or have a religious or medical exemption, meaning more than 11,000 of its employees are not vaccinated. 

“This decision comes after a detailed review of a U.S. District Court ruling earlier this month that halts the enforcement of a federal executive order requiring vaccinations for federal contractors, a recent Executive Branch directive not to enforce the order on those contractors, and a number of state laws which limit an employer’s ability to impose mandatory vaccine requirements,” the company said in an emailed statement. “Boeing adopted its U.S. requirement to ensure compliance with the federal executive order.”

That last line in the company’s official comment is striking. Most large defense companies have said they established vaccine mandates to protect their workers from a virus that has killed more than 800,000 Americans. Boeing here directly says the White House executive order is the main reason why it adopted the vaccine mandate.

It’s also a pretty noticeable change in tone for the company. Less than five months ago, Boeing CEO Dave Calhoun opened the company’s quarterly earnings by saying: “Please encourage everyone you know to get the vaccine if they haven't already.”

In its Friday statement, Boeing said employees are “strongly encouraged to get vaccinated for the safety of themselves and others.” 

But others may follow Boeing’s path. Among the defense giants, only Raytheon and Leidos have publicly said they will keep their employee vaccine mandate in place.

The Senate approved the 2022 National Defense Authorization Act, which now heads to the White House for President Biden’s signature. The $768 billion policy bill authorized $25 billion more than Biden requested. The Senate also voted to raise the debt ceiling by $2.5 trillion, which means it shouldn’t become an issue again until early 2023, after next year’s midterm elections.

The United Arab Emirates said it is suspending a $23 billion arms deal for F-35 jets and MQ-9 Reapers, the Wall Street Journal reports. UAE is reportedly upset with security requirements the U.S. wants to put on the stealth jets to safeguard them from China.  

Last year, the Trump administration agreed to sell UAE F-35s and Reapers if they signed a peace deal with Israel, known as the Abraham Accords. They did—but the Biden administration put the arms deal under review upon entering the White House in January.

Traveling in Malaysia this week, Secretary of State Antony Blinken said the U.S. is “prepared to move forward” with the F-35 and Reaper deals. “We’ve wanted to make sure, for example, that our commitment to Israel’s qualitative military edge is assured, so we wanted to make sure that we could do a full review of any technologies that are sold or transferred to other partners in the region, including the UAE.…[W]e continue to be prepared to move forward if the UAE continues to want to pursue both of these systems.”

The Journal story came out the day before a UAE delegation held two days of military talks at the Pentagon. A U.S. Defense Department readout of the talks, which were led by Colin Kahl, the defense undersecretary for policy, did not mention the F-35. 

“The United States and the UAE reaffirmed their commitment to a strong bilateral defense relationship and recognized the UAE as a key partner in addressing regional challenges,” Pentagon Press Secretary John Kirby said in the readout. “Both sides agreed on the importance of the U.S.-UAE strategic partnership, as one based on shared interests and shared priorities.”

In an Atlantic Council blog post, William Wechsler, a former Obama administration Pentagon official now with the think tank, said UAE should not “overplay this argument” because “it is perfectly appropriate for the United States to impose some restrictions.” 

For the third straight year, Palantir has won a U.S. Army deal to provide software that the Army says “improves and accelerates decisions on everything from personnel readiness to financial return on investment.” Palantir’s software “enhances readiness and offers near real-time visibility and controlled access to disparate Army data sources on an integrated data platform,” the company said. 

Lockheed Martin established an “enterprise agreement” with another telecom company as it looks to position itself to offer 5G technology to the military. “The agreement includes development of critical capabilities like 5G-enabled wireless relay and Integrated Access and Backhaul,” Lockheed siad.

Weekend reading: Global military drone spending is expected to total more than $187 billion over the next decade, according to a new Teal Group analysis. The estimates both procurement and research and development spending. Annually, countries currently collectively spend about $10.6 billion per year on drones. That’s expected to increase to $13 billion in 2030. 

Making Moves

• Former U.S. Sen. Kelly Ayotte, R-N.H., has been elected as the chair of the board of directors of BAE Systems, Inc., the U.S. arm of BAE.
• Leonardo DRS has named Philip Perconti the company’s chief technology officer. He was previously the Army’s top scientist.

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