Think the U.S. military is conservative? All strait-laced,
polished brass, and spit-shined? Well, think again -- and
allow me to introduce you to U.S. Navy Admiral Gary Roughead,
Chief of Naval Operations and a four-star wild and crazy
guy.
Speaking before the Brookings Institution in Washington,
D.C., yesterday, Adm. Roughead (gotta love that name) opened
fire on conservative-think in the military, declaring "I tend
not to want to put things off. I'd rather put a little
pressure on the system and get things done."
What things, exactly?
Specifically, the admiral wants to cut loose
on the Pentagon's strait-laced acquisition rules and begin
buying cutting-edge tech for the Navy -- even if it hasn't,
technically, jumped through all the usual testing hoops. Case
in point:
Northrop Grumman 's (NYSE: NOC) new Fire
Scout remote-controlled helicopter. Even before the Fire
Scout had passed all of its tests, Roughead had the gizmo
drafted for service in the eastern Pacific, where it's
currently being put through its paces aboard a U.S. Navy
aircraft carrier.
Roughead describes the whirlybird as performing
"wonderfully," and he hopes to move forward on a range of
similarly not-yet-ready-for-prime-time tech, including:
Peering down from the crow's nest, the Admiral declared
that sometimes it's better to take a system that's 90%
proven, put it into operation and see what improvements might
be helpful, rather than test, and retest, and field a system
100% ready for ... what turns out to be the wrong
mission.
But what's it mean to investors?
Simply this: The Obama administration
taketh away programson one hand, but it also
giveth us some new onesto invest in. The Navy's biggest
UAV foray right now looks to be STUAS/Tier II, where
Boeing (NYSE: BA)
leads the packin the race to replace the venerable
ScanEagle.
But Adm. Roughead's pronouncements suggest we could see
revenues flow to
iRobot 's (Nasdaq: IRBT) autonomous
underwater vehicle (AUV) program sooner than expected. It
suggests, too, an acceleration of the UCAS contract that
Northrop
won back in 2007(with a little help from its friends,
General Electric (NYSE: GE),
Honeywell (NYSE: HON),
Lockheed Martin (NYSE: LMT), and
United Technologies (NYSE: UTX)).
While the UCAS contract might be forgotten as it undergoes
a long testing schedule, Adm. Roughead's comments show it'll
be ready for prime time sooner than expected. Combine his
comments about the UCAS program with positive ones from
Northrop's management on its latest conference call, and
things are looking up for the project. A fleet of unmanned
precision bombers inching closer to reality should have
Northrop -- and its partners -- licking their chops at the
profit potential.
Invest accordingly.
This article was originally published as
Addled Admiral Builds a Robot Navyon
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