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Laser Battle at the Pentagon: Boeing Takes on Raytheon

By Rich Smith - Sep 20, 2014 at 10:43AM

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Defense contractors vie to build the U.S. military a "dollar-a-shot" laser cannon.

The U.S. military wants a laser gun. It really, really wants one.

Soon it may get not one -- but two.

Last month, we told you about the U.S. Navy's effort to develop a "Ground Based Air Defense Directed Energy On-the-Move Future Naval Capabilities" laser gun. Even in acronym form, that's quite a mouthful. But what it boils down to is the Navy wanting to build a prototype 25-kilowatt laser cannon, mount it on a Humvee, and see if the thing could shoot down some low-flying aircraft and drones.

The Pentagon hired Raytheon (RTN) to take on the task, with the latter promising to get a "Marine Humvee-based high energy laser" ready for testing "in the very near future." Just a couple weeks ago, however, we learned that Raytheon rival Boeing (BA 0.52%) may have a similar weapons system already in hand.

Seven years ago, Boeing and Raytheon teamed up to build an Airborne Laser for the U.S. Air Force. Photo: Wikimedia Commons.

Crossing the streams: Boeing versus Raytheon
At just 10 kilowatts in power, Boeing's laser, mercifully dubbed just the High Energy Laser Mobile Demonstrator, or HEL MD, is less powerful than the laser cannon that Raytheon hopes to build. It's of similar size, though. If Raytheon's stated goal is to build a laser cannon so small you can fit it in the back of a Humvee, Boeing's HEL MD easily fit aboard a not-much-bigger Oshkosh tactical military vehicle.

Oshkosh Corporation's Joint Light Tactical Vehicle -- minus the laser cannon. Photo: Oshkosh.

The tasks the two companies see their laser guns as able to execute are similar. Raytheon has been hired to build a "high power," "light-weight," and "rugged" laser weapon capable of shooting down low-flying hostile aircraft and unmanned aerial vehicles ("drones") for the Marine Corps. Boeing's version is designed more as a "C-RAM" system -- "counter rocket, artillery and mortar" -- to shoot down missiles being fired at U.S. troops.

But during tests at Eglin Air Force Base in Florida, Boeing's laser successfully acquired, tracked, and engaged not only 60 mm mortar rounds in flight, but drones as well.

Maintaining momentum
The Eglin tests suggest Boeing is already a good step ahead of Raytheon in developing a working laser cannon, small enough to be transported aboard a small armored car. And Boeing seems intent on maintaining its lead. According to a company press release, Boeing's next step will be to increase power levels on its laser to 50 or even 60 kilowatts, to further demonstrate HEL MD's efficacy in shooting down aerial threats.

The question investors need to ask themselves now is: How big of a lead does Boeing have in the race to build workable laser weapons for U.S. ground forces? Weapons powerful enough to shoot down incoming tactical missiles, yet also small enough, light enough, and rugged enough to be transportable to the places those missiles are aiming at?

The answer could be as big as "five years." We first wrote about Boeing's efforts to build high-energy laser weapons for U.S. ground forces back in 2009. (Boeing's work on laser weapons for other branches of the military, such as the abandoned Airborne Laser built for the U.S. Air Force, stretch back even further). In contrast, Raytheon's involvement in laser work has been more limited. Last month's contract with the Navy, for example, was for only $11 million, which suggests Raytheon is still in the early innings in this game.

The upshot for investors
The Pentagon is very interested in developing laser weapons systems for U.S. military forces -- and no wonder. According to Chief of Naval Research Rear Adm. Matthew Klunder, the Laser Weapon Systems, or LaWS, that the Navy is building will cost "about one dollar to shoot." Assuming mobile high-energy lasers for ground forces are similarly cost effective, there's a real financial incentive to developing this technology.

Who will ultimately perfect the devices remains to be seen. Boeing's multiple contract wins in the field of laser tech suggest that the world's biggest plane-maker is also the leading light in laser tech. But Raytheon, Northrop Grumman, Lockheed Martin -- all the big names in defense contracting, really -- are making at least some efforts in this direction. Indeed, even tiny Kratos Defense & Security (KTOS 0.74%) has a stake. Kratos is named as the builder of the Navy's LaWS system.

Investors should take a cue from industry's intense focus on laser technology, and the potential for contract wins -- and profits -- that it may foreshadow. After all, where there's smoke, there's often fire -- and one day soon, maybe a laser beam starting that fire.

Introducing the new U.S. Navy Laser Weapon System. Now... to make it smaller. Photo: U.S. Navy.


Rich Smith owns shares of Raytheon Company. The Motley Fool owns shares of Lockheed Martin, Northrop Grumman, and Raytheon Company. 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.

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