Will combat drones reshape the American military aeronautics industry?

The US Air Force revealed, through press release, the names of the two manufacturers selected to design and build the prototypes of the first batch of combat drones, intended to accompany the future NGAD, successors to the F-22, as well as a few hundred specially prepared F-35As.

These drones must make it possible to respond to observed and anticipated developments in aerial warfare, while preserving, as much as possible, the costly and increasingly fewer combat aircraft, as well as their precious crews.

However, beyond the operational and technological revolution which is taking shape across the Atlantic, with the arrival of these drones before the end of the decade, another revolution is at work, industrial this time, around this program . Indeed, the two manufacturers selected, Anduril and General Atomics, do not belong to the 5 major defense groups, created by the 1993 concentration initiative.

The great defense industrial concentration of 1993 in the United States and its consequences

Until 1993, the American defense industrial and technological base was made up of around fifty large groups, often specialized. With the end of the Cold War, and the inevitable restructuring of the global arms market which until then supported the dynamism of this American industry, the Clinton administration undertook a very significant concentration in this sector.

F-15 F-16 Iraq
In 1991, the F-15 was built by Mc Donnell Douglas, bought in 1997 by Boeing, and the F-16 by General Dynamics, whose combat aircraft activity was bought in 1993 by Lockheed Martin.

50 US defense companies concentrated in 5 major groups

This is how the fifty major American defense companies were transformed into five strategic groups. In order of turnover today, these are Lockheed Martin, RTX (formerly Raytheon), Boeing, Northrop Grumman and General Dynamics.

This concentration made it possible to make these five major American players the world leaders in the defense industry. Even today, while manufacturers in China, Europe and elsewhere have also appeared, they remain firmly anchored in the TOP 5 global defense companies ranked by turnover.

It is clear, therefore, that the 1993 strategy was crowned with success, by further strengthening the omnipresence of the American defense industry in the US sphere of influence.

Stinger Ukraine
The Stinger surface-to-air missile now costs $400. It cost $000 in 25. Overall inflation in the United States from 000 to 1990 is only 1990%.

Thus, in Europe, nearly 70% of defense equipment spending observed in recent years has been directed towards the United States, even though the European defense industry very often produces perfectly competitive equipment.

The deleterious effects on prices of the industrial concentration of 1993

If this concentration has brought happiness to American industrialists and their shareholders, it has also created more than deleterious effects for the American armies.

American industrial giants find themselves, in fact, most often in a monopoly position, facing demands from the Pentagon. This led to an uncontrolled increase in prices, and therefore in American federal spending, to equip the armies.

In an interview given to CNN in 2021 on this subject, the former chief negotiator of the Pentagon's weapons programs and former vice president of Raytheon, Shay Assad, gave, for example, the price of the Stinger missile, increased from $25 in 000 to $1990 today, without either inflation or technological developments being able to justify more than a third of this increase.

Anduril and General Atomics, two emerging manufacturers, will design the future combat drones for the US Air Force

While directing US Air Force acquisitions from 2018 to 2021, Will Roper perfectly identified this drift. He then proposed transforming the NGAD program, intended to replace the only F-22, into a program of programs, composed of several models of specialized combat aircraft, with a lifespan limited to 15 years.

Anduril combat drones
Anduril combat drone illustration.

Roper paradigms swept aside by new Secretary of the Air Force

According to the proposed analysis, this shift would simultaneously revitalize competition within the US aeronautical BITD, bring about the emergence of new industrial players, and thus compensate for the excesses caused by the 1993 reform.

Franck Kendall, the Secretary of the Air Force of the Biden administration, paradoxically more conservative in industrial matters, had brushed aside Roper's conceptual innovations, shortly after his appointment in 2021, despite the support of the US Air Force .

Thus, the NGAD once again became the hyper-technological combat aircraft program intended to replace the F-22 that it had previously been, costing, by Kendall's own admission, several hundred million dollars per aircraft. For the occasion, he turned only to major American players, Lockheed Martin, Boeing and Northrop Grumman.

By selecting Anduril and GA-SI, the US Air Force created a break in the acquisition dynamic of the American armies

In this context, choosing Anduril, a start-up created in 2017, and General Atomics, which was created in 1993, to design and manufacture the first tranche of combat drone prototypes intended to accompany American fighters, constitutes a significant breakthrough in the dynamics of awarding strategic contracts by the US Air Force, and even, more generally, for the American armies.

Game Gambit GA-SI
GA-SI has developed the GAMBIT family, designed to give rise to specialized combat drones that are different depending on the missions, while pooling a technological and industrial core.

Certainly, the three major players eliminated from this first stage, Lockheed Martin, Boeing and Northrop Grumman, remain engaged in the competition for the second tranche of the program which, in the end, must concern a thousand combat drones of different models, delivered by the end of the decade.

It is also, certainly, to soften the ire of these very powerful economic and political actors that the US Air Force clarified, in its press release, that this was only a matter of first stage, and that they remained fully integrated in the following phases.

« Companies that are not selected to build these production representative CCA vehicles and execute the flight test program, will continue to be part of the broader industry partner supplier pool of more than 20 companies to compete for future efforts, including future production contracts » was thus clarified.

Is the US Air Force using combat drones to escape US industrial baronies?

The fact remains that the arbitration of the US Air Force, in this matter, in favor of two emerging players, rather than the three major industrial groups, constitutes a decision whose scope goes far beyond the sole framework of this competition.

This program will, in fact, allow Anduril, and to a lesser extent, as it is already a key player in the US drone offering, to GA-SI, to develop new skills and new industrial capacities, and therefore, to position itself in this strategic sector, in the same way as traditional aircraft manufacturers, or even with exclusive advantages.

F-35 manufacturing line
The experience of the F-35 contract has left its mark in the acquisition strategy of the US Air Force.

In other words, even if it is only a first tranche, the US Air Force is favoring, through this decision, the emergence of new players, likely to erode the monopoly positions inherited from the concentration of 1993, and with it, to revitalize competition in this market.

However, when we observe the strategy around the NGAD, which will only be produced in 200 copies, and even the F-35A, acquired in “only” 1 copies by the US Air Force, we understand the structuring role , and sizing, that combat drones will be called upon to play in the conduct of the American air war, obviously, but also around its industrial component.

Paradoxically, after having discarded the paradigms developed by Will Roper five years ago, the US Air Force, and therefore its Secretary, Franck Kendall, seem to be moving towards an industrial strategy that is largely inspired, has the potential, through combat drones, to redesign and revitalize the American military aeronautical industrial landscape.

A model to boost and improve European defense programs?

This observation deserves to be studied carefully, particularly in Europe, while a movement of concentration is at work, precisely to bring out major defense industrial players capable of confronting the famous American TOP 5.

MBDA
Europe has created some major international players, such as MBDA in the field of missiles, one of the rare companies likely to confront RTX.

Indeed, while the defense industrial market is being restructured at a rapid rate, under the effect of a massive increase in demand, this aspiration to the creation of national giants, like Leonardo or BAe, or specialized transnationals, like MBDA, Airbus Defense or KNDS, risks generating the same deleterious effects, in particular on the prices of equipment, as those which the American armies face today, and against which the arbitration of the US Air Force seems oriented.

This is especially true since in Europe, other factors, national industrial policy on the one hand, and external relations, in particular vis-à-vis the United States, on the other, will necessarily alter the arbitrations of the defense industrial acquisitions.

Thus, we can imagine, in France, that the Air and Space Force turns to a combat aircraft designed by Airbus Défense, rather than Dassault Aviation, on the argument of a larger group in Europe ?

RAfale Euro Fighter Typhoon
The international dimension of Typhoon did not give it any particular advantages on the international scene, facing the Rafale Franco-French.

Conversely, while the Eurofighter Typhoon is the most European combat aircraft of the moment, it has hardly convinced, beyond the four countries participating in the program. Better yet, these four countries have all acquired, or announced that they will, American F-35s.

It is therefore certainly urgent to put into perspective the real, and not fantasized, benefits that may result from possible national or European concentrations, with the deleterious effects that such concentrations have generated in the United States, before rushing towards these projects. , politically attractive, but much more complex than it seems at first glance, in detail.

Article from April 25 in full version until June 1

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