Why Would the Pentagon Kill One of Its Most Effective "Drone" Programs?

The K-MAX robo-supply helicopter has saved countless lives in Afghanistan. But should the military cancel it anyway?

Aug 2, 2014 at 1:15PM

Over three years' service in Afghanistan, a tiny flight of K-MAX unmanned helicopters built by Kaman Aerospace (NYSE:KAMN) and Lockheed Martin (NYSE:LMT), has successfully completed 1,950 sorties, flown 2,150 flight hours, and delivered 4.5 million pounds of cargo to U.S. Marines in the Afghan wilderness -- all without suffering a single loss of life in combat.

So naturally, the Pentagon is killing the program.

G
Kaman / Lockheed's K-Maxes are getting tied down at the Pentagon. Photo: Wikimedia Commons.

That's the upshot of a report out of DefenseNews.com last week, which noted that the  K-MAX "drone helicopter" project had already "far outlived" the six-month time span it was slated for, when initially started up in December 2011. Turns out, the K-MAX was so successful in side-stepping bomb-lined Afghan roadways, and safely delivering supplies to forward operating bases in Afghanistan that the Marines didn't want it to end.

But now, writes DefenseNews, "[N]o one quite knows what to do next."

Ied

IED? Photo: Wikimedia Commons.

What is K-MAX?
The K-MAX is a robotically operated helicopter capable of carrying three tons of cargo at a time, flying at night, and landing within 10 feet of a homing beacon all on its own.  It has probably saved multiple lives, which would otherwise have been lost traveling the highways and byways of Afghanistan to bring supplies to the troops. Over the course of more than a decade of combat in Iraq and Afghanistan, improvised explosive devices, or IEDs, have killed some 3,100 American GIs, and grievously wounded more than 10 times that number.

The roadside bomb problem has vexed the Pentagon so much so that over the course of the conflicts, it's spent more than $75 billion buying new armored vehicles and new bomb-detection technologies -- everything from MRAPs to Packbots -- to defuse the problem. But IEDs mean nothing to K-MAX as it flies above the fray.

Kmax Sling
USMC K-Maxes at base. Photo: Lockheed Martin.

What the K-MAX means to investors
For all of the Marines that loved it, K-MAX was never a huge money maker for Lockheed Martin and Kaman. In fact, over the three years they were in service, the two K-MAXes that Lockheed sold to, and serviced for the Marines, generated barely $62 million in combined revenue for the defense contractors.

But should the Pentagon decide to capitalize upon the success of the pilot program, it could grow in size. USMC is reportedly so thrilled with K-MAX's performance that they want to make the helo-drone a "program of record," enabling continual purchases of K-MAX drones as needed. Lockheed Martin says it would need contracts for at least 16 K-MAXes to make this economical-- an eightfold increase in the size of the program that could swell its revenues to $500 million over a similar three-year period.

Will it happen? With the war in Afghanistan winding down, whether a renewal of K-MAX is in the cards is anyone's guess. Having said that, Lockheed Martin received in February a contract to experiment with using K-MAX to deploy robotic "Squad Mission Support Systems" in hard to reach locations to support vanguard and special forces troops.

This suggests that the Marines' robotic K-MAXes should enjoy their leave time while they have it. The Pentagon may be calling them back up for service very soon.


Smss
What's better than delivering supplies by robo-helicopter? Why, using robo-helicopters to deliver robo supply trucks, of course! Photo: Lockheed Martin.

Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of Lockheed Martin. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers