I'm no dove when it comes to military hardware. Let others rant against the military-industrial complex. I personally have nothing against Boeing (NYSE: BA) F-18 fighter bombers, or their Gen-5 cousin, the F-35 Lighting II from Lockheed Martin (NYSE: LMT).
I do, however, question the need to spend $100 million apiece to deploy high-tech fighter jets that are doing things like bombing caves and strafing pirates, in countries where the most serious anti-aircraft threat is an AK-47 pointed at the sky.
Seems to me, we should be able to find better, cheaper ways to deal with threats like these -- and as it turns out, we have. And we have Goldman Sachs (NYSE: GS) to thank for it.
Goldman goes to war
Goldman, you see, is co-owner of recent Raytheon (NYSE: RTN) castoff Hawker Beechcraft. And Hawker thinks it's found the answer to America's budget problem in the form of cheap, effective, propeller-driven warplanes based on its T-6 trainer and King Air planes.
According to Hawker, if you remove the threat of surface-to-air missiles from the equation, turbocharged fighter jets really aren't required for most war zones. Absent the need for a short burst of speed to evade SAMs, prop-driven planes like its AT-6 attack plane and King Air 350 are just as survivable -- and cost a fraction the price of fighter jets.
Take the AT-6, for example. It's powered by one of United Technologies' (NYSE: UTX) ultra-efficient engines, uses the same avionics found in a LockMart A-10 Warthog, and sports a sensor pod from L-3 Communications (NYSE: LLL). Armed with everything from bombs to rockets to .50-caliber machine guns, the AT-6 is said to be fully as capable as the Warthog. But while its range is more limited, and its speed slower, the plane's about 24 times more fuel-efficient than a standard-issue F-16.
That's attractive in a time of declining defense budgets and rising oil prices. Attractive enough that the U.S. Air Force has already put in orders to buy 15 of the planes. USAF is holding a competition between Hawker and Embraer (NYSE: ERJ) for another batch of prop-planes to use in Afghanistan. If Hawker wins, the company will gain further sales momentum.
Beyond Afghanistan
Of course, the Afghan war won't last forever. (It only feels like it.) Looking further out, Hawker sees a strong market for prop-driven warplanes internationally, as "irregular warfare conflicts continu[e] to multiply around the globe." With allied governments desperate to cut back the spending needed to fight them, the AT-6 looks like a winner.
But to move the needle on Goldman's bottom line, the banker will probably have to sell Hawker Beechcraft. Keep an eye out for news of a sale: Add Goldman Sachs to your Fool Watchlist today.
