posted on Tuesday, February 28, 2006 2:45 AM by Endie

UAVs and Self-Deluding Companies

The War Room has an interesting post focussing on the surge in both supply and demand of unmanned aerial vehicles (UAVs): the high-tech remote-controlled (mainly) reconnaisance vehicles that the US in particular uses.  At any given time, there will be plenty loitering over Iraq, relaying back detailed, real-time imagery.  Some, now, are beginning to carry limited munitions loads, with intriguing possibilities for command and control having arisen in Afghanistan, in particular.

Anyway, there is a hugely interesting comment in the article:

Lockheed had been hesitant to support the UAV market for “fear of undermining its franchise business in fighter jets"

This sort of thinking amazes me when I see it.  I thought that IBM had provided the starkest of lessons in this area of technology when they tried to protect mini-computers by under-investing in the desktop.

As Sun Tzu might put it: if you see a potential product threatening your core business area, invest in it.

After all, someone else is certainly going to invest in it, and if it is someone else then, instead of the discomfort of changing business model, you have unemployment.  Better to be the one dominating the new area.  As Brad points out, Lockheed has given the competitors - especially the relatively small General Atomics who make the Predator - the chance to steal a march on it in this area.  However, that needn't be fatal to Lockheed.  One option, as mentioned, is throwing the problem at the Skunkworks group who gave us the Blackbird, the F117 and other technological advances.  But I suspect that this will not be enough in itself.  Lockheed will be looking around for acquisitions that will allow it to buy the technology to catch up and compete in this area: the Microsoft Defence.  I wonder if General Atomics themselves might not be a tempting prospect.

Comments

# re: UAVs and Self-Deluding Companies

Tuesday, February 28, 2006 4:00 PM by Brad
What is so surprising to me about Lockheed's ignorance to the growing UAV market is that they had all the technical capabilities to completely dominate the industry if they'd had the vision to execute it. Northrop Grumman's production of new aerial assets was almost non-existant before UAVs and now they have several aerial platforms; mainly the result of the smart corporate acquisitions, essentially the moves Lockheed Martin failed to execute.

You bring up a really good point about Lockheed salivating over General Atomic's as an acquisition. General Atomics would have been a brilliant acquisition for Lockheed <b>before</b> the Predator became a mainstay in the War on Terror, but now such a move would be seen as a blatant attempt to grab market share in an industry they neglected and the Governemnt might not support such a merger (though who knows what the "Merger Police" (the government) would say when they are also the customer of the involved companies).

An interesting thing to point out is that most of Northrop Grumman's UAV capabilities comes from what used to be Ryan Aeronautical, which was <a href="http://www.northropgrumman.com/unmanned/history.html">acquired in 1999</a> and subsequently became Northrop Grumman's Unmanned Systems group.

Northrop acquired Ryan before the government started to shift its focus to UAV systems - without this acquisition, Northrop Grumman would not have its most successful UAV platforms (Global Hawk and Firescout, to name the big ones) and might not be a significant player in the market - just like Lockheed Martin isn't a major player now (yet). Its the move that Lockheed failed to make and now they're playing catch-up, it seems. Vision versus lack of vision? Its the defense industry, we'll never know for sure, but its fun to speculate, thats for sure :)

Good post, thanks for the link! :)