Latest news with #Tempest
Scottish Sun
8 hours ago
- Business
- Scottish Sun
First non-pilot to lead RAF is picked to command all three armed forces
The married dad-of-two was picked by Sir Kier Starmer over Army Chief General Sir Roly Walker TOP APPOINTMENT First non-pilot to lead RAF is picked to command all three armed forces THE first non-pilot to lead the RAF has been picked to command all three armed forces. Air Chief Marshal Sir Rich Knighton – a career engineer and 'defence bureaucrat' – will take over as Chief of the Defence Staff this autumn. 3 The married dad-of-two was picked by Sir Kier Starmer over Army Chief General Sir Roly Walker, a former SAS commander Credit: AFP 3 Air Chief Marshal Sir Rich Knighton will take over as Chief of the Defence Staff this autumn Credit: @UK MoD Crown Copright 2024 3 The career engineer and 'defence bureaucrat' with Captain Paddy Hemingway.103, at Casement Air base Baldonnel near Dublin Credit: Arthur Edwards / The Sun The married dad-of-two was picked by Sir Kier Starmer over Army Chief General Sir Roly Walker, a former SAS commander. Knighton's only combat tour, according to his official bio, was 'a short stint as Senior Engineer Officer in Italy during the Kosovo campaign'. But he launched the RAF's Tempest plan to get a sixth generation fighter jet which is the government's flagship defence project. Pals insisted Knighton – who earned a 1st Class engineering degree from Cambridge University – was the perfect candidate for implementing Labour's defence reforms. They said: 'Rich is smart, popular and really good at getting sh*t done and he has bucket loads of integrity.' They added: 'For the hard yards of implementing a defence review, there's no one better to role up his sleeves hand get on with it. 'Naysayers would say his background is as engineer, he is a proper defence bureaucrat. 'There is no doubt Roly had a more operational experience but Rich will have plenty of people around him who can advise on that.' They were both on long list of four which included the first ever woman, General Dame Sharon Nesmith, and spychief General Jim Hockenhull. ACM Knighton, 56, will replace Admiral Sir Tony Radakin as the professional head of the forces and the PM's top military advisor. He will also take direct command of the Army, Navy and Air Force under a newly formed Military Strategic Headquarters. He joined the RAF as university cadet in 1988 and describes himself as 'a keen skier and a below-average sportsman who would like to do more sailing'. He maintains a 'private pilots license' and is president of the RAF Powerlifting, Winter Sports and Hockey clubs. Originally from Derbyshire, he lives with his lawyer wife Caitlin in Cambridge. Speaking before the appointment Knighton said engineering had shaped his style of leadership. His told a local newspaper: 'As an engineer in the air force, you are never, at any point, the leading expert in a thing. You rely on the advice of your technicians and your experts, and then you pull together that information, and you make a decision.' He described himelf as an optimist ands said: 'Nobody wants to work for a miserable bastard.' He added: "I'm very much a glass-half-full kind of character. I get a great deal of energy from working with other people. I've learned in my career that optimism and energy are infectious.' An MoD spokesperson said: 'This is speculation. The appointment process is ongoing and any announcement will be made in the usual way.' This comes as the UK will be forced to ramp up defence spending after Keir refused to commit to funding despite his "battle ready" promise. Labour's pledge to 'lead in Nato' would be blown to smithereens if Britain is left behind, a top defence insider said. Top Brass have been baffled by Kier Starmer's refusal to say when he will hit Labour's target of spending 3 per cent. The PM vowed to get Britain "battle ready" yesterday with new doomsday nukes and robotic fighter jets – but refused to say how he will fund it. Donald Trump has demanded allies spend 5 per cent of GDP on defence – and he has threatened to abandon nations that fail to pay their way. Nato's chief Mark Rutte has successfully lobbied allies to try and hit Trump's target by spending 3.5 per cent on core defence – including troops, tanks and ships – and 1.5 per cent on security and infrastructure, including spy agencies. France's President Macron has backed Rutte's demands. And Germany is already on course to hit the target within the next few years. A defence source said Britain's ministers have 'been in denial' about the looming Nato summit and pledges key allies will make. Starmer is expected to discuss the Nato target in a crunch meeting this week. A defence source said: 'Do we want to be lumped with Spain as the only allies that are complaining?' At the launch a landmark Strategic Defence Review Defence Secretary John Healey said: 'Our defence policy is Nato First." 'We will end the hollowing out of our Armed Forces and lead in a stronger, more lethal Nato.' Labour has pledged to increase defence spending from 2.3 per cent of GDP to 2.5 per cent by 2027. Starmer said: 'We have set the ambition to reach 3 per cent in the next Parliament, subject to economic and fiscal conditions.' But pressed on what that meant, he said: 'I'm not going to indulge in the fantasy politics of simply plucking dates from the air.' Defence Secretary Healey said the 3 per cent target was a "certainty". But he backtracked 24-hours later, insisting it was merely an "ambition". Britain's three biggest weapons programmes – including the Trident 2 nuclear deterrent, the new sixth generation fighter jets and new hunter killer submarines – will cost at least 3 per cent of GDP, a former defence minister told The Sun. More to follow... For the latest news on this story keep checking back at The Sun Online is your go-to destination for the best celebrity news, real-life stories, jaw-dropping pictures and must-see video. Like us on Facebook at and follow us from our main Twitter account at @TheSun.
The Irish Sun
8 hours ago
- Business
- The Irish Sun
First non-pilot to lead RAF is picked to command all three armed forces
THE first non-pilot to lead the RAF has been picked to command all three armed forces. Air Chief Marshal Sir Rich Knighton – a career engineer and 'defence bureaucrat' – will take over as Chief of the Defence Staff this autumn. Advertisement 3 The married dad-of-two was picked by Sir Kier Starmer over Army Chief General Sir Roly Walker, a former SAS commander Credit: AFP 3 Air Chief Marshal Sir Rich Knighton will take over as Chief of the Defence Staff this autumn Credit: @UK MoD Crown Copright 2024 3 The career engineer and 'defence bureaucrat' with Captain Paddy Hemingway.103, at Casement Air base Baldonnel near Dublin Credit: Arthur Edwards / The Sun The married dad-of-two was picked by Knighton's only combat tour, according to his official bio, was 'a short stint as Senior Engineer Officer in Italy during the Kosovo campaign'. But he launched the RAF's Tempest plan to get a sixth generation fighter jet which is the government's flagship defence project. Pals insisted Knighton – who earned a 1st Class engineering degree from Cambridge University – was the perfect candidate for implementing Labour's defence reforms. Advertisement They said: 'Rich is smart, popular and really good at getting sh*t done and he has bucket loads of integrity.' They added: 'For the hard yards of implementing a defence review, there's no one better to role up his sleeves hand get on with it. 'Naysayers would say his background is as engineer, he is a proper defence bureaucrat. 'There is no doubt Roly had a more operational experience but Rich will have plenty of people around him who can advise on that.' Advertisement Most read in The Sun Exclusive They were both on long list of four which included the first ever woman, General Dame Sharon Nesmith, and spychief General Jim Hockenhull. ACM Knighton, 56, will replace Admiral Sir Tony Radakin as the professional head of the forces and the PM's top military advisor. He will also take direct command of the Army, Navy and Air Force under a newly formed Military Strategic Headquarters. He joined the RAF as university cadet in 1988 and describes himself as 'a keen skier and a below-average sportsman who would like to do more sailing'. Advertisement He maintains a 'private pilots license' and is president of the RAF Powerlifting, Winter Sports and Hockey clubs. Originally from Derbyshire, he lives with his lawyer wife Caitlin in Cambridge. Speaking before the appointment Knighton said engineering had shaped his style of leadership. His told a local newspaper: 'As an engineer in the air force, you are never, at any point, the leading expert in a thing. You rely on the advice of your technicians and your experts, and then you pull together that information, and you make a decision.' Advertisement He described himelf as an optimist ands said: 'Nobody wants to work for a miserable bastard.' He added: "I'm very much a glass-half-full kind of character. I get a great deal of energy from working with other people. I've learned in my career that optimism and energy are infectious.' An MoD spokesperson said: 'This is speculation. The appointment process is ongoing and any announcement will be made in the usual way.' This comes as Advertisement Labour's pledge to 'lead in Nato' would be blown to smithereens if Britain is left behind, a top defence insider said. Top Brass have been baffled by Kier Starmer's refusal to say when he will hit Labour's target of spending 3 per cent. The PM vowed to get Britain "battle ready" yesterday with new doomsday nukes and robotic fighter jets – but refused to say how he will fund it. Donald Trump has demanded allies spend 5 per cent of GDP on defence – and he has threatened to abandon nations that fail to pay their way. Advertisement Nato's chief And A defence source said Britain's ministers have 'been in denial' about the looming Nato summit and pledges key allies will make. Advertisement Starmer is expected to discuss the Nato target in a crunch meeting this week. A defence source said: 'Do we want to be lumped with Spain as the only allies that are complaining?' At the launch a landmark Strategic Defence Review Defence Secretary 'We will end the hollowing out of our Armed Forces and lead in a stronger, more lethal Nato.' Advertisement Labour has pledged to increase defence spending from 2.3 per cent of GDP to 2.5 per cent by 2027. Starmer said: 'We have set the ambition to reach 3 per cent in the next Parliament, subject to economic and fiscal conditions.' But pressed on what that meant, he said: 'I'm not going to indulge in the fantasy politics of simply plucking dates from the air.' Defence Secretary Healey said the 3 per cent target was a "certainty". Advertisement But he backtracked 24-hours later, insisting it was merely an "ambition". Britain's three biggest weapons programmes – including the Trident 2 nuclear deterrent, the new sixth generation fighter jets and new hunter killer submarines – will cost at least 3 per cent of GDP, a former defence minister told The Sun. More to follow... For the latest news on this story keep checking back at The Sun Online Read more on the Irish Sun is your go-to destination for the best celebrity news, real-life stories, jaw-dropping pictures and must-see video. Advertisement Like us on Facebook at
The National
6 days ago
- Business
- The National
UK and Saudi Arabia discuss defence links as Tempest superjet project progresses
UK Defence Secretary John Healey met Saudi Defence Minister Prince Khalid bin Salman in London this week to discuss closer ties. After meeting, Mr Healey described Saudi Arabia as a 'vital partner for the UK in ensuring security and stability in the Gulf'. The two men discussed opportunities for closer defence co-operation, according to the UK's Ministry of Defence. The two ministers held an expanded meeting during which they 'reviewed the long-standing historic ties between the two friendly countries and discussed strategic co-operation in defence fields, as well as opportunities to enhance it in ways that serve mutual interests', the official Saudi Press Agency reported. They also addressed regional and international developments, along with issues of mutual concern. Prince Khalid also met National Security Adviser Jonathan Powell and Chief of the Defence Staff Admiral Sir Tony Radakin during the two days of talks, which ended on Wednesday. Saudi Arabia is keen to become the fourth partner nation for the Global Combat Air Programme that will produce the Tempest superjet, the world's most advanced aircraft, in 2035. The UK is understood to be open to involving another country. The GCAP was launched in 2022 when a joint company was established, equally owned by aerospace contractors from the three countries: BAE Systems, Leonardo and Aircraft Industrial Enhancement. The jet is intended to be a multi-role aircraft to replace the RAF's Typhoons as they leave service from the middle of the next decade. An official request was made by Riyadh to join the tri-nation project developed by Britain, Italy and Japan in 2023 and it was confirmed in January this year that talks were taking place. Japan has been more cautious, and initially opposed Saudi Arabia's inclusion, fearing it might delay the tight deadline to produce the aircraft. In December, the country's Defence Minister Gen Nakatani said 'assumptions' should not be made about the participation of other countries. Italy has lobbied for Saudi Arabia to be brought on board, with Prime Minister Giorgia Meloni publicly giving her backing to the proposal after meeting Saudi Crown Prince Mohammed bin Salman in Al Ula. Italian Defence Minister Guido Crosetto said last month that Saudi Arabia had more resources available than the other three countries as well as 'the need for technical growth'. The Tempest, as it is known in Britain, will have advanced stealth technology with the ability to fly without a pilot. It will also be able to direct swarms of drones, as well as incorporating artificial intelligence and carrying a large ordnance of missiles and directed-energy lasers. Using digital tools and advanced manufacturing skills, the GCAP alliance plans to build the jet in about half the time it took to launch the Eurofighter Typhoon. UK ministers have been warned to keep a tight grip on the budget of the £12 billion ($16 billion) programme after problems with other international collaborations. MPs on the commons defence committee acknowledged that progress so far had been positive but cautioned that previous projects with other countries had 'seen costs spiral and delays pile up'. Mr Healey also announced on Thursday that the UK government would set up a cyber command to counter a 'continual and intensifying' level of cyber warfare as part of a strategic defence review. It will also invest more than £1 billion into a new 'digital targeting web' to be set up by 2027 to better connect weapons systems and allow battlefield decisions to be made faster. It could identify a threat using a sensor on a ship or in space and then disable it using an F-35 aircraft, drone or offensive cyber operation, the Ministry of Defence said. Mr Healey said that the government was responding after about 90,000 cyber attacks from state-linked sources were directed at the UK's defence over the last two years.
Business Wire
6 days ago
- Business
- Business Wire
Spruce Point Capital Management Announces Investment Opinion: Releases Report and Strong Sell Research Opinion on Tempus AI, Inc. (Nasdaq: TEM)
NEW YORK--(BUSINESS WIRE)--Spruce Point Capital Management, LLC ('Spruce Point' or 'we' or 'us'), a New York-based investment management firm that focuses on forensic research and short-selling, today issued a detailed report entitled, 'The Tempest Surrounding Tempus AI', that outlines why we believe and estimate that shares of Tempus AI, Inc. (Nasdaq: TEM) ("Tempus" or the "Company") face up to 50% – 60% potential downside risk, or $26.35 – $32.95 per share. Download and view the report and its Full Legal Disclaimer by visiting for additional information and exclusive updates. Spruce Point Report Overview Tempus AI, Inc., (formerly Tempus Labs, Inc.) based in Chicago, IL, provides AI-enabled precision medicine solutions. The Company develops its diagnostics through the application of artificial intelligence in healthcare to make laboratory tests and connect lab results to a patient's clinical data. As of the last twelve months ended March 31, 2025, the Company reported approximately $803 million and ($77) million of revenue and Adjusted EBITDA, respectively. The concerns we outline in our report include: Tempus Founder Eric Lefkofsky and his associates have a history of promoting disruptive technology companies, cashing out early, and leaving public shareholders with losses or lackluster returns. Mr. Lefkofsky and his associate Bradley Keywell, who is also a major Tempus shareholder, have a history of partnering on companies that have ended poorly for public investors. The partners first sold to HA-LO Industries during the dot-com bubble which was blamed by some for sending HA-LO into bankruptcy. was positioned as the next but that concept never came to fruition and litigation emerged. The partners later co-founded Echo Global Logistics and Groupon. Groupon's struggles have been widely publicized, and despite Mr. Lefkofsky's claims that Groupon would be 'wildly profitable' and that some of its offerings could be positioned against Costco, its success was short-lived and its share price has declined -95% since its IPO. During the IPO process, Groupon also restated revenues by nearly 50% after encountering resistance from the SEC about its revenue recognition policy, and it reported a material weakness of internal controls after the IPO. Echo Global Logistics was touted as a technology disruptor in the freight and logistics market and also reported a material weakness of internal controls after its IPO. While public investors were ultimately rewarded with a takeover premium of +244% twelve years after its IPO, the stock vastly underperformed the Dow Jones Transportation Index by approximately 110% and the takeover came years after the partners ceased active involvement. Concerns around Tempus' AI capabilities are heightened given the minimal revenue generated from its AI applications. Amid the market enthusiasm for artificial intelligence, Tempus Labs rebranded as Tempus AI before its IPO. Despite its name, Tempus generated only $12.4 million, or 2% of total revenues, from AI applications in 2024. This time around, Mr. Lefkofsky makes aspirational claims to investors by tossing in comparisons such as Nvidia and Tesla. He suggests that Tempus is likely to reach a similar inflection point, and that vast upside is around the corner. However, ten years since being founded in 2015, there is no evidence that Tempus has generated a profit or net positive cash flow. In contrast, after a decade, both Nvidia and Tesla had already reached $2 billion in revenue (more than 2x TEM's revenue) and both were able to have at least one cash flow positive year. Our concerns about the Company's AI capabilities deepened after we evaluated split-second product demonstrations from promotional videos and screenshots from the Company's website. Apparently, Tempus has not properly figured out how to leverage AI to cross reference and check even basic facts such as patient age and the sequencing order of samples and deliveries. Multiple Board members and other executives have been associated with troubled companies that restated financial results. Tempus' Chief Financial Officer worked in a variety of accounting roles at Groupon, which, as we previously indicated, had challenges. The Chief Accounting Officer ('CAO') was previously CAO at RTI Medical (renamed: Surgalign) which had a multi-period financial restatement and resulted in revenue recognition fraud allegations by the SEC, though he was not specifically named in the compliant and some of the misconduct pre-dated his arrival. Tempus' Audit Chairman is the former CEO and Chairman of InnerWorkings, a company founded by Eric Lefkofsky, which restated results and disclosed a material weakness of controls shortly after his announced departure. Also on the audit committee is Peter Barris. Mr. Barris and his investment firm NEA were involved with Vonage Holdings and Neutral Tandem which rebranded as Inteliquent. Vonage, which was led by an SEC-charged executive named Jeffrey Citron, later restated its financials in 2008 while reporting a material weakness of internal controls. Inteliquent commenced an internal investigation of its financial reporting and accounting practices and reported a material weakness, but no restatement was made. Lastly, board member Ted Leonsis has partnered with Mr. Lefkofsky before at Groupon. His biography in Tempus' SEC filings fails to disclose he was Vice Chairman of AOL during a controversial period at the company and through its merger with Time Warner. Mr. Leonsis made a public statement that he was 'very comfortable' with the company's accounting practices. The SEC later charged eight executives with accounting fraud involving round tripping of revenue and imposed a $300 million civil penalty. Mr. Leonsis was not one of the executives charged. We see signs of aggressive accounting and financial reporting. The Company's revenue quality should be carefully scrutinized. To illustrate this, there is evidence of a well-timed announcement to support the Tempus equity story created by aggressive financial engineering and a suspicious joint venture ('JV') between Japan's SoftBank and Tempus ('SB Tempus'). The JV was announced on June 27, 2024, shortly after the IPO on June 14, 2024. A SoftBank affiliate invested $200 million in Tempus pre-IPO Series G-5 convertible preferred stock on April 30, 2024. Under the terms of the JV agreement, both Tempus and SoftBank each contributed ¥15.0 billion (approximately $95 million) to the joint venture. Tempus then recognizes revenue and other income from the JV over a 2- to 3-year period. This maneuver has the appearance of potentially round-tripping capital to create revenue and income for Tempus and undermines the credibility and substance of the arrangement. Curiously, the JV's recently appointed CEO departed within six months after the formation of the partnership. We believe the accounting treatment of the $250 million Google Cloud debt raises significant concerns about the quality of its Adjusted EBITDA and the Company's path to meeting its FY25 guidance. Specifically, Tempus nets the debt's principal modification against cloud and software expenses in SG&A based on usage. This non-cash operating benefit, totaling $25.6 million over the last twelve months, directly inflates reported Adj. EBITDA. Without this adjustment, LTM Adj. EBITDA would have been ($102.6) million, rather than the reported ($77.0) million, and Adj. EBITDA margin would be -320 bps lower. We do not know the exact usage mechanism driving the debt principal reduction, but Tempus could be creating a 'cookie jar' to achieve its inflection to $5 million of positive Adj. EBITDA for FY25. We believe the non-cash gain should be recorded as 'other income' instead of as an operating income benefit. We believe the Total Contract Value ('TCV') that Tempus reports is aggressively defined with non-binding opt-ins, improbable milestone payments, related-party transactions, and self-funded commitments. For example, $300 million in cumulative opt-ins and $22.4 million in unlikely milestone payments are included in TCV, despite not representing firm contractual commitments. The April 2025 Pathos deal, which accounts for $200 million of TCV, involves a company founded, managed, and funded by Tempus leadership and Board-related investment firms, raising related-party and conflict-of-interest concerns. We also believe the SoftBank JV allowed Tempus to recognize $95 million in TCV which is precisely the amount of capital Tempus contributed. Key strategic partnerships and deal announcement with AstraZeneca and Pathos AI merit scrutiny. Tempus's partnership with AstraZeneca began in November 2021 with the announcement of a five-year, $200 million Master Services Agreement ('MSA'), which was positioned as a cornerstone relationship for the Company. Over time, this agreement was amended to extend the term to nearly seven years and increase the total commitment to $220 million. However, beneath the surface, we believe the partnership has weakened and is based on suspicious economic considerations: 1) AstraZeneca ultimately declined to increase its commitment before the end of 2024, forfeiting a warrant to purchase $100 million of TEM stock at the IPO price one year before expiry. We believe this refusal signaled AstraZeneca's reluctance to deepen its financial stake and pointed to a deterioration in the strength of the relationship, despite public messaging that suggests otherwise, and 2) a provision links AstraZeneca's increased potential commitment to a doubling of TEM's share price and not to actual demand for, or perceived value from, the products and services delivered by Tempus. This provision does not, in our opinion, hold up under scrutiny. Pathos AI ('Pathos') is a Lefkofsky-related company being touted as a unicorn with a $1.6 billion valuation. Ironically, Tempus already owns warrants to purchase 15% of Pathos, but internally appears to ascribe it as worthless on the balance sheet and appointed a Chief Scientist who was the founding CEO of Sema4 (now GeneDx). According to a recent report by Grizzly Research entitled 'Insiders Attest That GeneDx Is Actively Committing Widespread Fraud', CEO Schadt was aware that the company was billing insurance providers for tests without sufficient evidence to support the charges. In late April 2025, Tempus promoted 'Expanded Strategic Agreements with AstraZeneca and Pathos' which we believe embodies the extreme financial engineering now characterizing recent deals. Public statements could lead investors to believe this was an incremental, expanded contract from AstraZeneca. We believe the $35 million payment from AstraZeneca to Tempus is not new revenue, but rather a pass-through payment that Tempus is contractually obligated to forward to Pathos as a "Statement of Work" under the original 2021 MSA. In other words, it was already part of AstraZeneca's existing contractual commitment. By routing these funds to Pathos, we believe AstraZeneca reduced its remaining obligation to Tempus by $35 million and thus was not an expansion of its partnership. The $200 million data licensing and model development deal raises profound conflict-of-interest concerns and calls into question the independence and economic substance of this headline contract. Up to half of the $200 million may be paid in illiquid Pathos Series D Preferred Stock - not cash - and Tempus is required to pay Pathos $35 million as part of the same arrangement. This convoluted structure, involving related parties and non-cash consideration, raises serious questions about the authenticity of the Company's reported revenue and backlog. Far from being a true extension of the AstraZeneca relationship, we believe the Pathos deal underscores a weaker commitment from a significant customer, while highlighting a reliance on related-party transactions and creative deal structuring. We believe the Company's recent financial guidance revision reveals weakness in core operations. We believe that the $10 million FY25 revenue guidance increase earlier this month is substantially explained by the expected contributions from the Ambry Genetics acquisition and the new Pathos/AstraZeneca deal, two factors that we estimate should have added nearly $46 million to projected revenue for the year. With overall guidance rising by only a fraction of this amount, we believe it reveals a significant shortfall in the core genomics and data businesses. This discrepancy strongly suggests that the Company's fundamental operations are underperforming relative to prior expectations. It further supports the view that headline growth is being driven by acquisitions, related-party transactions, and financial maneuvers, rather than by robust organic growth in its main business lines. There are other indicators of a deterioration in business such as an exhaustion of nearly all long-term deferred revenue and a decline in the growth rate of cloud storage costs as well as a recent amendment to the Google contract. We believe that owning shares of Tempus is a poor risk / reward. We believe the Tempus equity growth story is built on hype and an appeal to retail investors that it is an exciting and disruptive technology play with AI appeal which could have the next Tesla- or Nvidia-type inflection. However, we think investors should focus on its aggressive accounting, financial engineering, related party dealings, and earnings quality. Tempus is extremely dependent on keeping the perceived value of its equity high because it is among the most aggressive issuers among its peers of stock-based compensation at 77% of revenue. Key insiders and early institutional investors have quickly begun to liquidate stock while its shares command a premium multiple based on its above-industry average revenue growth irrespective of its source and quality. Debt is now rising from the Ambry Genetics acquisition, and we find an unusual financial covenant for a $12 billon public company which requires the Company to maintain a minimum of $1 billion in revenue which we believe puts greater pressure on the Company to be creative in seeking new business. Given these risks, we believe that investors should exercise extreme caution and scrutinize the Company's public statements closely. The sell-side consensus price target is $66.82 per share which implies just 1% upside potential. We value the core, related party, and acquired revenues of Tempus separately and based on our 2025E estimates, we see 50% – 60% potential downside risk to TEM's share price. As a result, we do not see a favorable risk / reward in owning the stock and expect shares to underperform the medical diagnostics industry along with the broader equity market. Please note that the items summarized in this press release are expanded upon and supported with data, public filings and records, and images in Spruce Point's full report. As a reminder, our full report, along with its investment disclaimers, can be downloaded and viewed at As disclosed, Spruce Point and/or its clients have a short position in Tempus AI, Inc. (Nasdaq: TEM) and owns derivative securities that stand to net benefit if its share price falls. Following publication of the report, we intend to continue transacting in the securities covered therein, and we may be long, short, or neutral at any time hereafter regardless of our initial opinion. For additional important information, please review the 'Full Legal Disclaimer' contained in the report. Spruce Point Capital Management, LLC is a forensic fundamentally-oriented investment manager that focuses on short-selling, value and special situation investment opportunities.
Yahoo
27-05-2025
- Business
- Yahoo
The UK defense industry's biggest problem isn't just cash — it's also companies like Amazon
Like much of the world, the UK is ramping up its defense spending. But defense companies are now competing with an expanding talent-hungry tech sector for scarce skills. "We need a sea of talent," a defense sector insider told BI. "At the moment, it's a puddle." When Calvin Bailey — a member of the UK parliament — was a squadron commander in the country's Royal Air Force, he saw a shift in how his engineering-heavy workforce changed careers. In the early 2010s, people would leave the service "like for like," he told Business Insider — meaning they were leaving the military for complementary roles in the defense and aerospace industry. However, by around 2017, he said, a new sprawl of high-tech companies and major infrastructure projects created a demand for skills that the military had nurtured, such as robotics, advanced engineering, and logistics. Bailey wrote in a recent piece for War on the Rocks that he watched as the military "hemorrhaged" certified aircraft engineers. "I found myself competing with unlikely adversaries: Amazon logistics hubs," he wrote. As the UK attempts to redress the effects of decades of reduced military spending, it's not just a steep price tag that has experts worried. It's a shrunken — and highly competitive — skills pipeline. Bailey still doesn't think the UK is spending enough, he told BI. But even if the country throws money at it, "you haven't got the skills base with which to go and do the work that's required." Paul Oxley, a spokesperson for UK defense trade association ADS Group, told BI that demand for skilled workers now presents the defense industry's "largest barrier for growth." This covers everything from traditional skills like welding and high-end engineering, to growing fields like cybersecurity, digital, and AI capabilities. Oxley said that surveys of ADS members have seen the issue of talent leapfrog energy prices to become the top worry for many companies. These concerns come amid an increased commitment by the UK to defense spending — to 2.5% of GDP — that has defense-related industries looking out for new orders. Big projects are already in the works. Dreadnought-class submarines, the Tempest fighter jet, and Type 26 and 31 frigates are due to come into service in the next decade or so. Yet in March, Kevin Craven, the head of ADS Group, warned lawmakers that skills shortages are "combining to a point where both the defence and aerospace industry cannot fulfil the demand that they have." These warnings also come as the government prepares to publish its latest Defence Industrial Strategy, which a Ministry of Defence spokesperson said will help the UK have the "capability, skills and industrial resilience" for warfighting. Multiple skills initiatives are already underway, they added. The UK's defense sector pays an average of £39,900, Oxley said, which is about $53,000 and around 14% higher than the national average. But even that can't always compete with other sectors, Bailey, the MP, said. Meanwhile, many companies, like Amazon, actively recruit UK veterans as part of a government program pledging to support post-service careers. Amazon declined to comment when approached by BI. Bailey shared that other competing industries include infrastructure projects, such as the recent nationwide rollout of electric smart meters. He told BI those leaving the RAF for such companies "would find an easier job — because it's less regulated and controlled and demanding on their skills — paying equal or more than they would expect on the general market." In addition, security clearances make it hard to hire from abroad — and in any case, the UK's nearest European defense industry neighbors are themselves in a scramble for talent. The expansion of a talent-hungry tech sector compounds a much longer-running skills issue. Andrew Kinniburgh, a spokesperson for manufacturing industry trade body Make UK, told the Defence Select Committee in March that the country is in an "arms race" for engineers. Campaigners say STEM has been neglected from the earliest schooldays up, causing a shortage that has seen all sectors — not just military — competing for talent. That situation wasn't helped by the Apprenticeship Levy, a 2016 attempt to invigorate private sector investment in training. It was so cumbersome that schemes fell by 172,000 across all sectors in its first year, according to HR industry body CIPD. The government now says it's streamlining the process. Industry experts told BI that another reason defense sector workforce skills have atrophied is a long-term lack of investment in the military that began in the 1990s. The defense ministry spokesperson told BI that the current government is addressing the country's security "after years of hollowing out." People like naval architects and high-level engineers take decades to nurture, and when orders dry up, "you have skill fade in these areas quite quickly," said Sam Cranny-Evans, a freelance defense analyst and associate fellow at the Royal United Services Institute. "Once they're gone, they're gone," he told BI. "Standing them up again is really hard." COVID-19 lockdowns haven't helped. Suddenly, people with 10 to 15 years left in their careers decided to accelerate their retirement plans, leaving what Oxley called a "handover cliff edge" and a decadelong knowledge gap. The problem has come to a head before. In the early 2000s, BAE Systems took over a contract to produce the Astute-class submarine, following a 10-year gap since the development of the earlier Vanguard-class sub. Dated skills — among other factors — became a major problem, forcing the UK to bring in General Dynamics Electric Boat, a US company, to help at an eventual cost of about $145 million. The project ran years late, exceeded its budget by hundreds of millions of pounds, and spurred multiple reckonings that still reverberate today. Janet Garner, BAE Systems' future workforce director for submarines, told BI the company is focused on ensuring it has a strong submarine workforce. She highlighted its $33.5-million training center and said early careers programs are "up to record levels." An analysis by Navy Lookout highlighted lessons learned, saying that the next-generation Dreadnought went into production with a much more experienced workforce. But across the industry, there's a long road ahead. Oxley and Bailey say there's a lot more to be done, and that skills need to be addressed at the level of education. Both are calling for schools and colleges to develop applied STEM curricula showcasing the appeal of working in defense. Encouraging a much more flexible career structure, allowing people to "zig-zag" between the military and civilian sectors and making the relationship complementary rather than competitive, is also among the suggestions being made. Tan Dhesi, a lawmaker heading up the UK parliament's Defence Select Committee, declined to comment in detail while the inquiries continue, but said that he had seen "clear and consistent" evidence that the issue needs addressing. "We need a sea of talent," Oxley said. "At the moment, it's a puddle." Read the original article on Business Insider
