The following story is a business story, meaning ...
NO ETHICAL ANALYSIS SO LONG AS THE NUMBERS LOOK GOOD--YEAAAAAA!!!
Please keep in mind while you read that there are some potentially negative effects to filling the sky with unmanned drones with electronic eyes and radio signal receiver/transmitters on board. How bout a world where 90 percent of the population starves and 10 percent live to get more robots onto the battlefield so they can be on the side of the conflict with the most robots that haven't been destroyed? Personally, I'd like to see that kind of reality safely assigned to science fiction.
The following San Diego Union-Tribune story contains some indispensable facts about unmanned aerial vehicles and the weapons contractors General Atomics Aeronautical Systems and Northrup Grumman.
Prowling for profit
As demand rises for unmanned surveillance drones, Poway’s General Atomics Aeronautical among companies positioned to benefit
By Mike Freeman, UNION-TRIBUNE STAFF WRITER
Sunday, December 20, 2009
Every minute of every day, about 40 Predator-series unmanned aircraft are flying worldwide, providing “constant stare” surveillance over everything from war zones to U.S. borders to piracy-plagued shipping lanes.
With the U.S. military preparing to send 30,000 more troops to Afghanistan next year, the number of Predator-family aircraft flying at any given moment is likely to increase. Air Force officials said last week that more drones will be added in Afghanistan as part of the troop buildup. The Army is also fast-tracking its schedule for deploying unmanned vehicles.
All of which has focused a spotlight on Poway-based General Atomics Aeronautical Systems, the maker of the Predator and its more advanced siblings, the Reaper, Sky Warrior and Avenger.
Three years ago, the Predator group had logged 80,000 total flight hours since the first one flew in the mid-1990s.
Today, these aircraft have flown close to 1 million hours — a good portion of that over Iraq and Afghanistan.
In the process, the drones have helped change the battlefield by giving service members — even small groups in isolated areas — their own spy plane. Not only do these aircraft provide surveillance for miles in every direction, they also can pick up enemy communications and transmit video feeds to soldiers’ handheld devices on the ground as well as to operations centers halfway around the world.
“The Predator may be the single most popular new military product introduced in this generation,” said Loren Thompson, chief operating officer with the Lexington Institute, a military think tank. “The versatility and transformational nature of the Predator allows war-fighting ideas that just weren’t feasible in the past.”
Drones have changed the battlefield to the point that insurgents in Iraq have been hacking into video feeds to see what the Predators are monitoring, according to Wall Street Journal reports last week. But U.S. officials said there’s no evidence that militants were able to take control of the drones or otherwise interfere with their flights.
Although General Atomics is getting the most attention, it’s not the only one in the drone business operating in San Diego.
Northrop Grumman has a significant unmanned-aircraft division in Rancho Bernardo. Although its aircraft are assembled elsewhere, the company’s San Diego unit provides software, systems integration, business development and other functions for the high-altitude Global Hawk, the Fire Scout unmanned helicopter, a Navy version of the Global Hawk called BAMS and the stealthy, early-stage drone designed to land on aircraft carriers called the X-47 UCAS, among others.
These two companies have put San Diego near the center of a sea change in military aviation with the rise of ever-more-capable drones.
“They are the two largest by far” in the unmanned-aircraft industry, said Phil Finnegan, director for corporate analysis for The Teal Group, a defense industry research firm.
Teal estimates that the market for drone aircraft will double in the next decade, reaching $8.7 billion in annual sales worldwide. That’s just for the planes. It doesn’t include sensor systems, which often increase costs significantly.
Neither Northrop Grumman nor General Atomics provides specific revenue figures.
The companies control different market segments. Northrop Grumman’s larger, more capable and more expensive Global Hawk dominates the high-altitude, long-endurance segment. It can fly at 60,000 feet for more than 36 hours. No drone competes with it, analysts say.
Northrop Grumman has made roughly 25 of the planes to date, and they’ve flown hundreds of missions over Iraq and Afghanistan. The Air Force eventually plans to buy 54. The company won’t reveal the cost of the Global Hawk, but a Government Accountability Office report in 2006 said the drones cost more than $100 million each, including ground equipment, support, testing and spare parts. Northrop Grumman says that estimate is too high.
General Atomics’ Predator series dominates the medium-altitude, long-endurance market segment. The company has made more than 380 of the planes, mostly for the Pentagon. But they also are being used by the Department of Homeland Security to patrol borders, by NASA for research and by foreign military customers.
“It comes down to this: If I was trying to cover the world with an unmanned surveillance drone, I would definitely pick the Global Hawk,” said Thompson of the Lexington Institute. “But if I was trying to cover the northwest corner of Afghanistan, I would probably pick the Predator.”
Drone aircraft are less expensive to operate than manned aircraft. They also keep pilots out of harm’s way by performing some of the dull but dangerous work on the battlefield.
Some drones, such as the Predator family, can be fitted with missiles and circle a potential target for more than day. Most, though, are used only for surveillance.
Inside its San Diego-area factory, General Atomics builds Predator-series planes from scratch. Frank Belknap, director of composite manufacturing, said local workers who lost their aerospace industry jobs in the early-’90s recession — many of whom found work making composite golf shafts and tennis rackets — are now returning to aerospace to build Predators.
In 1999, Belknap was the 16th employee of General Atomics Aeronautical Systems, an affiliate of privately held General Atomics. Today, the company employs more than 4,000 workers.
Over the past decade, Pentagon procurement spending on unmanned aerial vehicles has surged from $500 million to $3.5 billion. Defense Secretary Robert Gates has said he wants more drones in the field. He told the military to move faster to get those systems deployed, even if they have only 75 percent or 80 percent of their expected features ready for action, military officials said.
General Atomics got into the drone business after acquiring a small company out of bankruptcy in the early 1990s that had been working on the aircraft. By the mid-’90s, it had perfected the technology enough to build prototype planes.
Thomas Cassidy Jr., a retired admiral who heads General Atomics Aeronautical, went ahead without waiting for the Pentagon to come out with specifications for what it wanted. That’s unusual in the defense business, analysts say.
“Tom picked absolutely the sweetest spot in the technology,” said Dave Fulghum of Aviation Week, an aerospace industry magazine. “He essentially made a platform that you can stick almost anything into. That has been the perfect answer, and it’s the cheapest of the high-performance platforms that are out there.”
Predators, Reapers and Sky Warriors — the Army’s version of the aircraft — generally cost $4 million to $12 million each. Sometimes costs are higher, depending on sensors, communications and weapons payloads.
General Atomics makes money not only on building the planes, ground stations and some radar systems, but also gets paid for maintaining the drones.
That has become a lucrative business as use of the aircraft soared in Iraq and Afghanistan, analysts say.
“They understood the importance of the life-cycle part of the business,” said Lindsay Voss, an industry analyst with Frost & Sullivan. “These aircraft are being used at such a high rate and in such extreme environments. General Atomics can make a killing on the back end by supporting it and providing the services that are required to keep these aircraft going.”
The company is repeating the blueprint that worked in the Predator for the next generation of drone. This year, it flew the Avenger for the first time — even though it doesn’t have a customer.
The Avenger has a jet engine, a first for the Predator family, It also has other features for better performance in more contested airspace.
“General Atomics is trying to continue its ‘first mover’ advantage,” said Ryan Peoples, an associate principal with Charles River Associates, a defense industry research firm. “With the Predator, they did all this development on their own dime, so they were best positioned to capture (the Air Force contract) when it came along. And they’re just continuing that trend with the Avenger.”
The Air Force hasn’t set a firm time frame for seeking proposals for the next generation of medium-altitude drone. When it does, however, the Avenger is likely to have competition, analysts say. For example, a previously unknown stealth drone recently was spotted in Afghanistan. It has been declassified as a Lockheed Martin “Skunk Works”-designed plane. Others such as AAI Corp. and Northrop Grumman also could compete, analysts say.
“That program will be really important in the way the future of UAVs is shaped,” said Voss of Frost & Sullivan. “They could really mix it up if they choose a vendor other than General Atomics. It’s pretty unlikely, but it’s something everybody is going to be talking about.”
Mike Freeman: (760) 476-8209; mike.freeman@uniontrib.com
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