It's official. The U.S. Navy is building a railgun.
Earlier this month, the U.S. Naval Sea Systems Command, or NAVSEA, announced it has begun engineering studies preparatory to installing an electromagnetic railgun aboard a U.S. warship. Now, we've known this was in the works for more than a year already. What's surprising in the Navy's announcement, though, is not the fact that they're building a railgun per se -- but where they plan to put it.
As of last year, the plan was for the Navy to build its railgun, test it out aboard the new expeditionary fast transport USNS Millinocket (T-EPF-3), and if all goes well, later incorporate the railgun into its design for the upcoming third Zumwalt-class destroyer Lyndon B. Johnson (DDG-1002). But here's the problem:
Defense contractor General Dynamics (NYSE:GD) is due to deliver the Lyndon B. Johnson to the Navy by 2018. Testing the railgun aboard the Millinocket was supposed to begin in 2017, though, and continue for as long as a year. Any hiccup in the scheduling could delay installation aboard the Lyndon B. Johnson, and deprive America's most advanced warship of perhaps its most lethal weapon -- a Mach 7 cannon capable of hurtling projectiles out to strike targets 100 miles distant.
Smaller, better, cheaper... faster
Rear Admiral Pete Fanta, director of surface warfare for the Navy, doesn't like that idea one bit. In an interview with DefenseNews.com last year, he mused: "If I go ahead with the demo it will slow my development. I would rather get an operational unit out there faster than do a demonstration that just does a demonstration."
And so that's just what the Navy may do. Accelerate development, skip testing aboard the unarmed transport, and go direct-to-implementation instead. Under this plan, the Navy would install the railgun aboard Lyndon B. Johnson, and do its testing there.
What it means for the Navy
Admiral Fanta's suggestion that the Navy might prefer on-the-job training for its new railgun sounds ambitious. But it's also right in line with recent Navy practice for its newest weapons systems.
In 2014, testing of a new Laser Weapon System aboard the USS Ponce in the Persian Gulf segued immediately into the Navy declaring the weapon "operational," and approved for use while the vessel was on station in the Persian Gulf that same year.
Similarly, in 2009, testing of Northrop Grumman's Fire Scout drone in the eastern Pacific was proceeding smoothly. All of a sudden, U.S. Navy Admiral Gary Roughead, Chief of Naval Operations, declared that with Fire Scout performing "wonderfully," he saw no reason to wait for testing to be completed before putting the whirlybird to use. As the Admiral explained: "I tend not to want to put things off. I'd rather put a little pressure on the system and get things done."
All of this points to a new philosophy emerging within the Navy, of compressing the time between development of a new weapons system and its deployment -- and accelerating the speed at which new weapons reach the field. Rather than think up a weapon, test it to death, and only deploy when it's years, or even decades, out of date, the Navy is beginning to rush new weapons to the front. There, they can immediately begin functioning as force multipliers, even in the midst of testing.
What it means to investors
All of this promises to significantly change the way companies do business with the Pentagon. A shift toward accelerated deployment of new technologies could shorten the time-to-market for new weapons. When you consider how much this lag adds to development costs, and how many weapons programs have been abandoned mid-course due to cost overruns in the course of their development, this could be a boon to the defense industry.
Speaking of which, it's even possible that immediate installation and testing of a railgun aboard the Lyndon B. Johnson could breathe new life into General Dynamics' Zumwalt destroyer program. Initially planned for a production run of 32 vessels, the Zumwalt program was cut short at just three ships due to -- you guessed it -- cost overruns. Initially expected to cost just $1.2 billion apiece, these three ships are now expected to cost as much as $7.5 billion each, inclusive of development costs.
Be that as it may, the Zumwalt is currently the only surface combatant in the U.S. fleet capable of generating the massive amount of electricity (as much as 78 megawatts) needed to operate a railgun. Assuming all goes well with testing the new weapon, and the Navy decides it wants more of them, there may simply be no other option than building more Zumwalts to carry the weapon -- an option that could mean many billions of dollars of new revenue for General Dynamics.
To coin a phrase: If you like your new railgun, Pentagon, you can keep it -- but you'll still need a Zumwalt to carry it.
Rich Smith does not own shares of, nor is he short, any company named above. You can find him on Motley Fool CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 256 out of more than 75,000 rated members.
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