BAE Systems to Keep Managing U.S. Ammunition Plant in $8.8 Billion Deal
13 December 2023 - 10:12AM
Dow Jones News
By Doug Cameron
BAE Systems won a new 10-year contract worth $8.8 billion to
manage the U.S. Army's main ammunition plant in Tennessee as
efforts continue to surge production of artillery shells, missiles
and other weapons, the Pentagon said on Tuesday.
The UK defense company's U.S. arm has overseen the Holston Army
Ammunition Plant in Kingsport since 1999. It beat out competing
bids from General Dynamics and Day & Zimmerman, according to
people familiar with the Army's decision. Both operate other Army
ammo facilities.
Holston is being upgraded as part of Pentagon plans to address
shortcomings that the conflict in Ukraine exposed in the ability of
the U.S. to produce more weapons, as well as the fragility of
global supply chains.
The Army has already doubled monthly production of 155mm
artillery shells to almost 30,000, and wants to raise that to
100,000 over the next two years by investing in new and more
automated facilities.
Holston is crucial to the surge through its role as the Army's
largest explosives plant, with recent improvements including
upgrades to the production line for RDX, a commonly-used compound
more powerful than TNT.
The sprawling 6,000-acre complex dates back to World War II, and
is big and remote enough to have its own annual deer cull--with
bows and arrows rather than guns.
Holston was built in a remote valley in eastern Tennessee, once
run by Eastman Kodak in a reflection of how big industrial
companies once dominated the defense sector. The plant has brought
employment, but also pollution from chemicals that have leached
into the environment, complicating plans to invest in the
facility's expansion.
BAE also runs the Radford Army Ammunition Plant in Virginia, one
of five government-owned, contractor-operated ammunition
plants.
The seventh-largest arms maker by sales makes everything from
aircraft carriers and nuclear submarines to howitzers, armored cars
and parts for the F-35 combat jet. It has expanded in the U.S.
through a series of acquisitions, and its planned $5.55 billion
purchase of Ball Aerospace would lift the country's share of group
sales to around 50%.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
December 12, 2023 17:57 ET (22:57 GMT)
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