DTN News: Boeing, Raytheon Take Aim At Drone Market Dominated By Northrop
*Sources: Bloomberg By Edmond Lococo and Susanna Ray
(NSI News Source Info) PARIS, France - June 20, 2009: Boeing Co. and Raytheon Co. aim to challenge Northrop Grumman Corp. in unmanned aircraft, a market it pioneered since World War II when an as-yet-undiscovered Marilyn Monroe worked at one of its plants.
A Northrop Grumman Global Hawk unmanned high-altitude surveillance airplane sits on display at the Paris Air Show in Le Bourget, June 17, 2009. Photographer: Antoine Antoniol/Bloomberg News
“We clearly want to have a significant position,” Jim Albaugh, who leads Boeing’s defense unit, said in an interview at the Paris Air Show. “This is going to be a growing area and we want to play.”
Global unmanned aircraft sales are estimated to almost double in the next decade because of rising needs for surveillance of threats including terrorists and pirates, according to aviation consultant Teal Group. Boeing announced a new division at the show to help win orders for unpiloted aircraft like its A160T Hummingbird and ScanEagle. Raytheon is developing a new drone called KillerBee it aims to sell to the Navy and Marine Corps.
Los Angeles-based Northrop has produced more than 100,000 unmanned aircraft in the past 60 years and is ready for the challenge, Chief Executive Officer Ronald Sugar said in an interview at the show.
“In any good market that has growth characteristics you are going to see new entrants,” Sugar, 60, said. “We’re not resting. We now do in fact enjoy a premier position in the market and we know we have to continue to innovate and perform.”
Annual worldwide spending on unmanned aerial vehicles, or UAVs, will increase within a decade to $8.7 billion, from $4.4 billion, with more than $62 billion spent over the period, according to estimates released this week by Fairfax, Virginia- based Teal Group.
Northrop Drone Sales
Boeing now has about $400 million to $500 million in annual sales of unmanned systems, and the business has doubled in size over the past 10 years, Albaugh said. That’s still only about half of the $1 billion in annual sales Northrop gets from drones, Sugar said.
Northrop’s presence in Paris included a full-scale model of its Global Hawk unmanned spy plane and a video screen at its corporate chalet touting little-known facts about its business, such as Monroe’s work on the company’s drones in the 1940s.
Through acquisitions, Northrop was present in the field of unmanned aircraft from the beginning. The first target drone flight in the U.S. occurred in 1935 when actor and model- airplane enthusiast Reginald Denny demonstrated a radio- controlled target to the U.S. Army.
Marilyn Monroe Work
Denny later founded Radioplane Co. in 1939, and sold the company to Northrop in 1952, according to a history on Northrop’s Web site. Monroe was working at Radioplane as a glue sprayer in the 1940s when she was discovered by David Conover, the photographer who helped her become a model, according to a biography co-written by her half-sister, Berniece Baker Miracle.
From those beginnings, Northrop has evolved to dominate the top end of the unmanned aircraft market with its Global Hawk drone flown by the U.S. Air Force in Iraq and Afghanistan. During the invasion of Iraq, the plane supplied 55 percent of the target data used to destroy air defenses while flying only 5 percent of the surveillance missions, Northrop said. Global Hawk can fly at altitudes up to 65,000 feet (19,810 meters) for more than 31 hours powered by a single Rolls-Royce Group Plc engine.
“The Global Hawk sensor suite is eye watering and very impressive in terms of day and night surveillance,” said Ron Stearns, research director at G2 Solutions, an aviation consulting firm in Seattle. “For high-altitude long endurance, Global Hawk is basically it right now.”
Smaller Aircraft
It’s not feasible for companies like Boeing or Raytheon to try to do a clean-sheet design to compete against the Global Hawk, so they will likely have to put their energies elsewhere, including smaller tactical aircraft, Stearns said.
Raytheon CEO William Swanson said his company provides some of the sensors on Global Hawk, and licenses technology from Northrop for its own KillerBee aircraft. Waltham, Massachusetts- based Raytheon’s experience as the world’s largest missile maker is applicable to building UAVs, he said in an interview.
“Raytheon’s strength is its versatility,” Swanson said. “We try to come at you many different ways.”
To stay competitive, Northrop is also moving from the top end of the line to expand into smaller aircraft with planes such as its Fire Scout, a helicopter-style aircraft, Sugar said.
It’s not too late for Chicago-based Boeing to catch up, Albaugh, 59, said.
“Our offerings are pretty broad,” Albaugh said. “We have top end and bottom end and some very unique capabilities. The question is where we don’t have programs of record, how you work with capabilities and turn them in.”
To contact the reporter on this story:
Edmond Lococo in Paris at
elococo@bloomberg.net;
Susanna Ray in Paris at
Sray7@bloomberg.net.
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"Our absolute priority is Afghanistan and we want to focus all our resources there," the ministry's chief of staff Airis Rikveilis told AFP Thursday.
Rikveilis was speaking as Latvian deputies voted to pull its troops out of the NATO missions in Kosovo and Bosnia-Herzegovina later this year.
Seventeen Latvian troops will withdraw from the NATO-led Kosovo Force by August 14, 2009 and another two soldiers will pull out of the EU-led mission in Bosnia and Herzegovina by October 9, 2009.
Some 160 Latvian troops are currently stationed in the NAT0-led ISAF mission in Afghanistan.
An ex-Soviet republic of 2.3 million, Latvia joined the NATO Western military alliance and the EU in 2004, but is suffering worse than any other EU country, with GDP expected to contract by 18 percent this year.
Facing bankruptcy, the government of Prime Minister Valdis Dombrovskis slashed spending to meet the terms of a multi-billion dollar bailout package agreed with the IMF, EU and other international lenders. 
Observer, Mentor, Liaison Team members, Maj. Jim Hickman and Latvian army Maj. Juris Abolins, patrols through the village of Nishagam, in Konar province, Afghanistan alongside members of the Afghan national army, March 18. (U.S. Army photo by Sgt. Matthew Moeller)
Rikveilis said the decision on the troops was not directly related to austerity measures adopted by parliament this week, but admitted that the overall budget strictures had influenced their thinking.
Earlier this year, Latvia's National Security Council decided in principle to end the Latvian troop presence in the European missions in 2009 because of the spending cuts.
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