:: July 2004 Letter ::
I Am Alive and You Are Dead is the wonderfully titled new biography of Philip K. Dick, the visionary science fiction writer whose dark, paranoid work inspired such crazed epics as Blade Runner, Minority Report, Total Recall, and of course Duncan Hunter’s Buy American initiatives. As with the protagonist in many of his stories, aircraft are being eclipsed by a kind of virtual reality. In a data-linked world of net-centric warfare, what role do aircraft play? More importantly, are aircraft industry analysts obsolete?
Quantifying the net-centric market is tough. Programs are secret, spread out among rice bowls, or just incredibly nebulous. But tens of billions are in the pipeline for battle management, network architecture, and basic surveillance. Some programs like the E-10 battle management/surveillance aircraft are uncertain, and as this is written, Congress is cheerfully slashing funds for the Transformational Communications System (TCS) and Space Based Radar (SBR), two quintessentially net-centric programs. Then again, history shows that these new programs might just survive. After all, the E-8 JSTARS radar plane survived the grim mid-1990s budget cuts totally intact. Even in FY 1994/1995, when the Air Force procured zero fighters, it found $1.3 billion for four E-8s.
This net-centric direction is transforming the aircraft world in three ways (I prefer to avoid The T-Word whenever possible, but it works here). First, there’s procurement cash and force structure. Since procurement will soon peak (particularly with the ongoing Iraq ulcer), net-centric spending will pressure DoD’s aggressive fighter procurement plans. Meanwhile, aircraft force structures have yet to feel the impact of net-centrism as a force multiplier.
The Air Force plans to procure over 2,000 fighters in the coming 20 years (276 F/A-22s, 1,763 F-35s). With legacy planes, that implies a force not too different from today’s. With new programs like SBR, E-10, RTIP, and others, how many of these fighters can DoD really afford? And with better targeting information from net-centric systems, how many will DoD really need?
Second, and most intriguingly, aircraft themselves are feeling the impact of net-centrism. When the real value is in the network, and the information conveyed between external sensors and precise munitions, the virtues of a particular platform matter much less.
Look at the Navy MMA contest, won by Boeing in June. Lockheed’s P-3, a superb purpose-built design, will exit the stage after five decades of service. Boeing claims that one of their bid’s strengths was its emphasis on connectivity with other sensors and systems. The 737 may have also won because it offers logistical advantages over the P-3, but then again, 15 years ago, the Navy considered and rejected a weaponized jetliner for the maritime patrol mission. What changed to make the idea attractive? Does net-centric warfare make an aircraft’s design less relevant to its overall effectiveness, thereby making generic airframes more useful? Is the next step the long-awaited use of a generic transport airframe as a long-range “arsenal aircraft” strike platform?
This leads to the third way net-centrism is transforming aircraft—it changes the look of aviation companies. It promotes horizontal organizations because they maximize “best value” subcontracts and encourage intra-company cooperation. A recent visit to Boeing’s cross-divisional Integration Center convinced me that it represented the future. (I thought the same thing after I saw the first Segway scooter so perhaps I’m just highly impressionable. But this time I think it’s for real.) In fact, even during an annus horribilus that would elicit sympathy cards from the House of Windsor, Boeing did very well in booking new business. The IDS unit booked $51 billion last year. With MMA and other wins, 2004 looks strong too. All this for a company that looks set to exit the manned fighter business by 2014.
But most of all, net-centric corporate strategies offer companies a chance to reinvent themselves. After decades of airframe success, Northrop and Grumman fell from grace in the early 1990s as the A-6, F-14, B-2, and other airplane programs collapsed. The combined company, however, has done a great job reinventing itself as a net-centric battle manager, with no combat aircraft work to speak of. In fact, a little adversity is a good thing in this industry—Boeing’s net-centric success could be a direct result of the JSF loss. In the same way, the MMA loss will strengthen Lockheed Martin’s net-centric efforts.
Europe, mired in traditional bent metal programs like A400M, Eurofighter, Rafale, NH 90, Tiger, etc. has little hope of joining this net-centric business trend. Ironically, they are finally succeeding as airframers, only to find that the industry has moved on to greener pastures. However, Saab has a nifty net-centric demo room (showing elaborate links between cheerful Gripen fighters, adorable S340 early warning turboprops, and very friendly Ikea stores). Recent moves to form an EADS/Dassault/Sagem UAV alliance could presage some kind of joint move in this direction as well.
I was also going to talk about me. I can barely comprehend this net-centric stuff, and was routinely picked last by Donkey Kong teams in college. Am I destined to chronicle the declining importance of aircraft, as military planes get lost in networks and the civil stuff moves to Bangladesh? Perhaps I’ll just get a job hunting replicants, like that guy in Blade Runner.
Or perhaps I can just obliviously get back to work. And speaking of it, July’s supplement includes the annual Rotorcraft Overview, plus updates of the 747, ERJ 170/190, C-27, Learjet, L-39, CH-47, EC 120, Explorer, Dash 8, and Nimrod. Stay away from the robots.
Yours, ‘til The Walls Start Moving,
© Richard Aboulafia 1997-2006, All rights reserved.