Army Chief General Ray Odierno announced on Tuesday an extensive plan to cut 12 brigade combat teams (“BCT”) from the active force by 2017. This announcement has sparked heated debate amongst policymakers and throughout the military communities whose economies are centered on these installations. The plan to reduce the number of BCTs from 45 to 33 outlines the Army’s strategy for reducing its force structure by nearly 80,000 soldiers over the next three and a half years. The Army plans to preserve its overall combat force by keeping 95 of its 98 combat battalions and distributing the cuts amongst the brigades’ headquarters positions. Under the current plan, the cut will effect 15 Army installations in the continental United States. However, brigades located in Alaska, Hawaii, and South Korea will be immune to this round of cuts in order to maintain a military and political focus in the Asia / Pacific region. The Army will be left with 12 armored brigade combat teams, 14 infantry brigade combat teams, and seven Stryker brigade combat teams following the execution of these cuts. Odierno expressed his concern that if sequestration continues beyond 2014 this reduction will likely be the first in a series of cuts that could require him to reduce another 100,000 active duty soldiers. The Senate Armed Services Committee (“SASC”) Ranking Member Sen. James Inhofe, R-Okla., said, “We’ll do everything we can [in order to block the plan]. It’s the last step in disarming America.” The Senate will debate the Army’s BCT reduction plan later this year.
Cohort PLC (Up 7.9%) – Shares were up for the week after the company announced that operating profit jumped 13% in the year ended April 30th. CEO Andy Thomis’s statement indicating a shift in Cohort’s strategy towards growth-by-acquisition also spurred the stock’s rise.
Intevac Inc. (Up 10.6%) – Shares rose this week following the company’s announcement that it has successfully qualified the ENERi™ ion implant production system that was ordered and shipped in the first quarter of 2013 to a Tier 1 Asian solar company. Intevac raised its second quarter revenue range from $14 – $16.5 million, to $16 – $16.5 million after the qualification, acceptance, and revenue recognition of the ENERGi™ ion implant system.
Precision Castparts Corp. (“PCP”) agreed to acquire Permaswage SA, a designer and manufacturer of permanent fittings used in fluid conveyance systems for airframe applications. The deal will strengthen PCP’s Airframe Products division with the addition of permanent fittings to its already strong separable fittings business. PCP plans to acquire Permaswage in a $600 million, all-cash transaction that is expected to be immediately accretive to earnings.