Textron AirLand’s recent introduction of its Scorpion light attack jet may be part of a larger trend within the US defence industry to innovate new solutions in the hopes of capturing additional business, in the face of declining government spending.
Over the past three years, a number of industry-funded projects have emerged. The Scorpion, Sikorsky’s X-2 and S-97 Raider high-speed compound helicopters, Boeing’s F-15SE Silent Eagle, Super Hornet conformal fuel tanks and enclosed weapons bay and General Atomics Aeronautical Systems Predator C are but a few of these examples.
“We have seen this happen sort of cyclically in the past – for example the [Northrop] F-5 did that on spec with the idea that the air force would want a low cost, low-end fighter or one that could be sold overseas,” says Dan Goure, an analyst at the Lexington Institute. “That didn’t work out all that well.”
The cycle has happened a few times, Goure says, particularly when the military has had budgetary or requirement woes. “It’s not surprising that given the current constellation of pressures that you might see it again,” he adds.
The self-funded Scorpion's emergence came as a surprise
There have been previous instances where private developments have delivered new capabilities, which have been widely adopted. The most prominent recent examples are the General Atomics MQ-1 Predator and Insitu ScanEagle. “It was just lucky that there also happened to be sort of a demand that came right on the tail end of its development cycle,” Goure says.
Richard Aboulafia, an analyst at the Teal Group, agrees that this is a cyclical trend. Overwhelmingly, however, such endeavors have ended in failure, he says. One of the most infamous examples of a private defence venture failing is the Northrop F-20 Tigershark of the 1980s. Generally, company-funded initiatives tend to work better for upgrade programmes or derivatives such as the Lockheed Martin C-5M, F-16E/F Block 60 or the Boeing EA-18G Growler. “If you get away from the new platforms, and you focus on upgrades, it becomes a happier story,” Aboulafia says.
One of the big reasons why these projects fail is because the company has to convince the Pentagon to accept new novel concepts. “It’s very tough to get the military and the department to buy into a capability that they didn’t invent,” Goure says.
Rebecca Grant, president of IRIS Independent Research, agrees with this. “Like Predator, sometimes it takes years of persistence plus a dash of luck to generate big sales,” she says. “Chances are not all projects will find customers, but a few will. Winners will be those like Predator and EA-18G that fill a distinct need where there are zero competitors.”
A big advantage of developing new products in-house – outside of a government-sponsored programme – is that it keeps engineering design teams running and helps to retain talent that may otherwise drift off to other industries, Goure says. “Potentially they might do something that might be a breakthrough,” he adds.
Mark Gunzinger, an airpower analyst at the Center for Strategic and Budgetary Assessments, agrees that these self-funded industry projects are a trend – but he says that it may not last. “I am a strong supporter of industry-sponsored experimentation, research, and development that could lead to these kinds of innovations, even though some of them do not pan out.”
However, Gunzinger worries that Congressionally-mandated sequestration budget cuts will lead to companies cutting their internal research and development funding. “If there is a trend, I think it's related to the very real possibility that a budget sequester will lead to a significant reduction in industry independent research and development,” he says. “That would be a real loss.”
The US military has drawn down before, but companies previously had the option of becoming more efficient or merging. Those options may no longer be viable. “Today, it's a different dynamic. We are down to three aerospace lead systems integrators, and they have cut about as much as they can,” Gunzinger says. “Frankly, I would not be surprised if at least one of them decided to get out of the military aerospace business in the event of another procurement holiday, much less fund interesting science projects that could lead to a new generation of capabilities for DoD [Department of Defense].”