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"Hey! Who's Flying This Thing?" Part 7

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"There are those that see JSF as the last manned fighter. I'm one that's inclined to believe that."
-- Adm. Mike Mullen, chairman of the U.S. Joint Chiefs of Staff

Thanks for the introduction, Admiral, and welcome back, Fools, to the lucky seventh installment of our continuing series covering the rise of the machines.

As the chairman suggested, Lockheed Martin (NYSE: LMT  ) only just began building Lightning II fighter jets (nee the "JSF"). Yet already, the plane seems obsolete before its time -- made so by the advent of unmanned aerial vehicle (UAV) technology. And indeed, the merry, merry month of May was a busy one in the exciting world of flying model airplanes ... that kill. Let's dive straight into the news:

The U.S. Marine Corps Wants YOU!
... to come up with a better way to resupply troops in the field. In April, the USMC solicited bids for a system to resupply field units with unmanned aerial vehicles, and the military industrial complex swiftly answered the call.

Rolling with the punches, Lockheed proposed supplying Marines with use of an unmanned K-Max helicopter called the Burro+. (Not to be confused with Lockheed's four-wheeled beast of burden, the MULE.) Northrop Grumman (NYSE: NOC  ) quickly objected that its RQ-8B Fire Scout, currently undergoing testing with the U.S. Navy, is the horse to beat. Meanwhile ...

The buzz about Boeing
Boeing (NYSE: BA  ) just announced its own entry into the competition, suggesting that the firm's mysterious A160T Hummingbird will provide "unmanned aerial vehicles to deliver supplies in lieu of putting trucks and personnel on dangerous roads."

As you may recall, SOCOM tapped the Hummingbird last month to fulfill a requirement for 20 unmanned "strike and surveillance aircraft" needed between FY 2012 to FY 2017. But while the Special Ops guys want to turn the Hummingbird into a first-person shooter, it seems the Hummingbird has no objection to hauling freight, too. Hearing the Marines needed an airborne mule, Boeing was happy to oblige.

Now there is a hitch. According to the Marines' solicitation, they're looking for UAVs capable of lifting 20,000 pounds. of supplies and carrying them on a 150-mile round trip. And they want these choppers chop-chop. Ideally, the new birds should be ready to deploy by February.

This could be a problem, because while it's certainly pretty, the Hummingbird's also a bit of a lightweight. The 35-foot-long unmanned helicopter can hover at 20,000 feet and cruise at more than 140 knots. It’s already proven its excellent endurance by completing a flight that lasted over 18 hours. But its payload is just 2,500 pounds. (Perhaps the Marines can buy them by the dozen?)

We're going to the show!
Now let's shift our focus from robo-copters to model airplanes. In a true Bull Durham moment, Elbit Systems (Nasdaq: ESLT  ) looks finally ready to play in the big leagues of U.S. defense contracting. Last month, the Israeli firm announced it's teaming up with defense contracting legend General Dynamics (NYSE: GD  ) to create a joint venture -- "UAS Dynamics, LLC" -- to sell UAVs to the U.S. military. The relationship here mimics the alliance General Dynamics forged with Force Protection (Nasdaq: FRPT  ) back in 2006, in that it will be a 50-50 joint venture.

Now, you may ask, what spurred this decision to team up in the first place? The press release says it all: "UAS Dynamics is an American company ... " And as such, UAS Dynamics won't be a victim of "Buy American" bias when defense contracts are doled out. (To the contrary, now Elbit's on the inside, looking out.)

Thus, in this marriage of unequals, it appears the General primarily brings an "in" with Congress and the Pentagon to the table. Elbit's contribution will be more substantial: two successful UAV models -- Hermes and Skylark. Hermes in particular has seen action recently in Sudan and Georgia, and received wide praise for its performance in both theaters.

Look, up in the sky! (Um, I don't see anything.)
Before we close, I want to take one last look back at Boeing. In May, Boeing announced it's developing a prototype UAV that's as big as a jet fighter (remember the Admiral's comment above?).

Dubbed the "Phantom Ray," the project evokes invisibility, and for good reason: Boeing doesn't ... actually ... have a Phantom Ray yet. But stay tuned for progress reports. From artists' renderings of how the Phantom Ray is supposed to look, it appears to borrow from Raytheon's (NYSE: RTN  ) KillerBee "flying wing" design (in turn, borrowed from Northrop). One time may have been a coincidence, but three companies latching onto the same concept? This suggests the new design idea is taking off.

Now, we started today's column with a defense quote. To highlight the importance of investing in firms that identify popular trends and claim their fair share early, let's end with another quote:

"This is one of the significant growth areas in the budget ... We are really placing a major bet in this area."
-- Defense Secretary Robert Gates

Invest accordingly.

Looking for other high-tech defense prospects for your portfolio? Check out Motley Fool Rule Breakers, where we're looking into options in everything from UAVs to missile defense, from bombproof trucks to bulletproof soldiers. Thirty-day free trials are available on-demand.

Fool contributor Rich Smith owns shares of Boeing. The Motley Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (10)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 08, 2009, at 3:04 PM, prginww wrote:

    It will be the last with a pilot in a seat in the plane. That aircraft has turn rates and dive performances that can easily pull every ounce of blood out of a pilots heart and brain.

    Why limit the aircraft with a pilot. Turn it into an unmanned fighter and let it's real ability shine.

  • Report this Comment On June 08, 2009, at 5:38 PM, prginww wrote:

    Great series on UAVs, informative with a wide perspective.

    BTW Back in 1996 ESLT formed a 50-50 joint venture with Rockwell Collins, VSI, to develop and produce the pilot helmets for a wide range of fighter planes, today VSI controls this market.

    If UAS Dynamics is only half as successful as VSI, it is looking at a very bright future.

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