Northrop's Global Hawk Takes On Lockheed's U-2: Who Will Win?
Both are technological masterpieces, and both have their advantages and disadvantages. More importantly, Congress likes NorthropGrumman's unmanned Global Hawk, but the Air Force prefers LockheedMartin's manned U-2. Now the battle lines are being drawn with Congress telling the Air Force to use the GH, but the Air Force fighting back for the U-2. Here's what you need to know.
Cold War origins
Lockheed's U-2 first came into use during the Cold War, and during that time, the U-2 proved to be an invaluable asset. Capable of flying at an unclassified altitude of 70,000 feet -- above the reach of Soviet interceptors -- the U-2 was able to fly into the heart of the Soviet Union, and supply intelligence agencies with the Soviet's emerging capabilities. Since then, the U-2 has proven itself time and time again during every war America has fought in.
Northrop's GH, on the other hand, is relatively new and was meant to be the next step in high-altitude surveillance. Capable of flying at altitudes of 60,000 feet, and for much longer than a manned aircraft, the Block 10 was first deployed overseas following the September 11th attacks. During this time, it received high praise from the Air Force. Since then, Northrop has developed a Block 20, Block 30, and is currently working on a Block 40. More pointedly, in 2011, the Air Force labeled the GH "essential to national security."
But in a surprising turn of events, the Air Force changed its mind and said it's no longer interested in the GH and that it wants to keep using the U-2.
Which is better?
In a head-to-head comparison, there are some clear winners in each category. The U-2 can climb higher and faster than a GH, but a GH can fly for a significantly longer time. The U-2 can fly in areas such as South Korea, where unmanned drones are banned, but the GH has a lower execution cost.
When it comes to sensor capabilities, it gets tricky. Even though the GH has three sensors to the U-2's two, the Air Force stated it prefers the electro-optical sensor on the U-2. But don't count that as a win for the U-2 yet. Northrop offered to upgrade the sensors on the Block 30 GH for a reported $48 million, but in order for that to work, Northrop wants to remove the cameras from the U-2 and put them on the GH.
Among others, one major critique by the Air Force is that the GH can't fly in bad weather and it doesn't reach an altitude high enough to fly above it. But supporters of the GH say this is ridiculous as the Air Force's restrictions of being able to fly 10,000 feet above thunderstorms is excessive. Additionally, for $7 million, Northrop offered to install "weather-diversion" cameras in the Guam-based GH. That way, the GH cold reroute around clouds just like a piloted plane.
What to watch for
There's a lot involved with this battle, and Congress -- which controls the Air Force's funding -- has said the Air Force is being shortsighted and needs to get on board with the GH, because at least for now, they're here to stay. Still, the Air Force isn't taking that as the final answer and is pushing for the U-2. As of now, Congress has approved funding for the GHs and has even put in stipulations that make it so the Air Force can't retire them. But this fight is far from over. And as this could negatively impact Northrop Grumman, investors would do well to closely monitor this situation.
With the American markets reaching new highs, investors and pundits alike are skeptical about future growth. They shouldn't be. Many global regions are still stuck in neutral, and their resurgence could result in windfall profits for select companies. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery" outlines three companies that could take off when the global economy gains steam. Click here to read the full report!
The article Northrop's Global Hawk Takes On Lockheed's U-2: Who Will Win? originally appeared on Fool.com.Fool contributor Katie Spence owns shares of Northrop Grumman. Follow her on Twitter @TMFKSpence. The Motley Fool owns shares of Lockheed Martin and Northrop Grumman. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.