Aerospace Daily Thursday, November 16, 2001
Analysts say Boeing UAV unit may signify change in military aerospace
By Nick Jonson
The Boeing Co. may have lost the competition for the Joint Strike Fighter, but its formation of a new Unmanned Systems unit could have significant consequences for the military aerospace industry, according to some industry analysts. The new unit will be led by former JSF deputy program manager and vice-president Mike Heinz (DAILY, Nov. 15). Heinz will report to Jerry Daniels, president and chief executive officer of Boeing Military Aircraft and Missile Systems, and George Muellner, president of Boeing Phantom Works, the company's advanced research-and-development unit.
In an interview with the DAILY, Heinz said the goal for Unmanned Systems will to develop a "tight linkage" between the "embryonic core" of unmanned and unmanned combat aerial vehicle technology being explored by the Phantom Works and the fully developed combat aircraft being produced by the company's Military Aircraft and Missile Systems. In so doing, the unit will "take full advantage of what we learned with the JSF in terms of design and manufacturing capability," Heinz said.
Jay Korman, an analyst with DFI International, said the creation of the new unit clearly sends a signal to the industry that unmanned aerial vehicles have become a big priority for Boeing. "I think they're sending a bit of a message here to the Air Force and the industry that they may have lost the JSF, but they're not out of the market yet," Korman said. The creation of the unit also sends a signal to smaller aerospace suppliers, he said, especially those manufacturing lower-end subsystems and components.
"It sends a message to suppliers that 'This is a new core focus area for us, so you'd better get on board,' Korman said. "An 800-pound gorilla has entered the arena." To meet Boeing's needs, smaller suppliers may respond by entering into joint ventures or merger agreements with other companies, including those based overseas, Korman said.
An emerging trend
The new unit also serves another purpose, said Richard Aboulafia, senior aircraft analyst with the Teal Group. "It's their best hope of keeping the design and integration capability [from the JSF program]," Aboulafia said.
Some of the people assigned to the new unit have worked on the JSF program, Heinz said in his interview with the DAILY. "Boeing is in the best position for designing and developing UAVs and UCAVs," Aboulafia said. "It's an attractive place to be."
But it isn't yet clear that Boeing has been completely shut out of the JSF program, said John Pike, director of GlobalSecurity.org. "Boeing is a big company with lots of little friends in Congress," Pike said. Moreover, based on events over "the last five years, a winner-takes-all approach is not the way things are done."
In any case, the creation of the Unmanned Systems unit is a reflection of the direction the military aerospace industry is taking, Pike said. Pike said the JSF was created to replace the F-16 for missions related to air defense suppression, but UCAVs are also being designed for that purpose.
"Unless the UCAV programs turn out be a dog, I think you're going to hear people saying six to eight years down the road that basically, we need fewer JSFs because we're going to buy more UCAVs," Pike said. "For Boeing to have a business that focuses on developing unmanned aerial vehicles, I think simply reflects the general way things are going to turn."
Historically, UAV and UCAV programs have been difficult to develop in terms of making the aircraft work properly and developing a concept of operations that corresponds with the missions of the different military services, he said. The profitability of such programs further complicated the issue.
"You had only a small number of people buying a small number of airplanes," Pike said. "But today, the technology is starting "to move out of the backyard garage kind of sector into the big, heavy metal sector," making them more appealing to investors. "With UCAVs, there's big money," Pike said.
Copyright 2001 The McGraw-Hill Companies, Inc.