More
    HomeNewsA nerdy group of misfits’: the US company behind Ukraine’s ‘kamikaze’ drones

    A nerdy group of misfits’: the US company behind Ukraine’s ‘kamikaze’ drones

    Defence industry minnow AeroVironment has gained prominence after success of its Switchblade system

    Advertisements

    Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.comT&Cs and Copyright Policy. Email [email protected] to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found here.
    https://www.ft.com/content/70d7fb39-4dbd-4b65-8b49-6969faf2d184

    A group of Russian soldiers was sitting on the armour of their tank, “calmly drinking alcohol”, when a “modern kamikaze drone equipped with powerful explosives” inflicted “irreparable losses to the enemy”. That was the account published on the official Facebook page of the Special Operations Forces of the Ukrainian army in May, which was accompanied by a video purporting to show the attack. The drone in question was a Switchblade made by AeroVironment, a small US defence contractor that has gained prominence after its “loitering missile system” became an emblem of Ukrainian resistance. The Pentagon has sent more than 700 Switchblade drones armed with warheads to Ukraine since Vladimir Putin’s invasion, giving little-known AeroVironment more visibility in a US defence industry dominated by five much larger contractors. “The war is an unfortunate situation for Ukraine, but fortunate for someone like us,” chief executive Wahid Nawabi said in an interview. “I do believe it’s going to create more of a momentum, not only for us,” added Nawabi, who said the conflict had also resulted in the Pentagon realising it “can’t just rely on the big primes”. The “Big Five” consists of Raytheon, Lockheed Martin, Boeing, Northrop Grumman and General Dynamics, which have a combined market capitalisation of $470bn. They tower over AeroVironment, which has a $2bn valuation. The “big guys are not at any real risk” from AeroVironment’s recent success but the Pentagon — which has long complained about a lack of competition in the industry — “would like to see a niche supply base”, according to an aerospace and defence investment banker. Success on the Ukrainian battlefield could also boost international demand for AeroVironment’s armed drones, said Nawabi. “I believe that Switchblade is going through the same sort of growth trajectory” as the company’s more established systems, Nawabi added. The Pentagon had already permitted AeroVironment to export its unarmed Raven and Puma drones to 50 countries, and the company generates 40 per cent of its roughly $450mn in annual revenue from international sales But the Switchblade systems were not cleared for export until last month, when the US approved sales to 20 countries, most of which are in Europe, including the Baltics, said Nawabi. France is reportedly trying to acquire the systems for its military. “Investors in AeroVironment had been waiting for many years for AeroVironment to be given US state department approval to export the Switchblade,” said Louie DiPalma, an analyst at investment bank William Blair, who described the permission as critical to the company’s future.

    Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.comT&Cs and Copyright Policy. Email [email protected] to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found here.
    https://www.ft.com/content/70d7fb39-4dbd-4b65-8b49-6969faf2d184

    Nawabi said the company’s “secret sauce is its real, intimate, close relationship with the actual users and war fighters”. AeroVironment is in “direct communication with the Ukrainian military and their diplomatic teams” on at least a weekly basis, he added. Founded in 1971 in California, AeroVironment is now headquartered close to the Pentagon in Arlington, Virginia. It has flown under the radar while developing an expertise in small robotic aviation systems. “We’re like this quiet, nerdy group of misfits — we’re awkward,” said Nawabi. Before the war in Ukraine, the company was perhaps best known for co-developing Ingenuity, a robotic helicopter that operates on Mars, with Nasa and the California Institute of Technology. Affixed to the belly of the Perseverance rover, the small aircraft arrived on the red planet in February 2021. Within the defence industry, the company is known for its unmanned drones. Earlier iterations of the Puma and Raven were deployed during the first Gulf war in the 1990s. “Quite honestly, the US military initially didn’t even know what to do with [them] until 9/11 happened because the generals are always thinking about big tanks and big aeroplanes,” said Nawabi. But he said the company gained traction by focusing on what soldiers needed. For instance, in the Afghanistan war, US forces had two equally flawed options if they were fired upon in a mountainous region: exit cover to see where the shots were coming from and risk being killed, or wait for an Apache or Chinook helicopter from a fleet that was overstretched.

    Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.comT&Cs and Copyright Policy. Email [email protected] to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found here.
    https://www.ft.com/content/70d7fb39-4dbd-4b65-8b49-6969faf2d184

    The soldiers, they said, ‘we need a [drone] that . . . we can handle and not wait for an hour or two until the helicopter shows up’,” Nawabi recounted. With the Switchblade, soldiers have a system that provides surveillance and munitions in a single package. AeroVironment delivered the first one to the Pentagon in 2010, which has since procured thousands. The systems being sent to Ukraine are from US inventory. The armed drone comes in two versions — the Switchblade 300 and a larger, newer version dubbed the Switchblade 600. Electrically powered and slower than rockets, they have low radar, heat and noise signatures. “You cannot see it, you cannot hear it,” said Nawabi. Switchblades are shot out of a tube and the 600 version can stay airborne for more than 40 minutes. Cruising at 70mph, the vehicle can travel over 90km before losing power. After locking on to a target, it completes its mission and explodes, a feature that gives it its “kamikaze” nickname. Should a target prove incorrect, the drone can be waved off at the last moment.

    Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.comT&Cs and Copyright Policy. Email [email protected] to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found here.
    https://www.ft.com/content/70d7fb39-4dbd-4b65-8b49-6969faf2d184

    DiPalma said that the company was positioning the Switchblade as an alternative to the Javelin anti-tank missile system that was developed by Raytheon and Lockheed, which is also being used by the Ukrainian army. AeroVironment generated revenues of $445.7mn in the 12 months ending on April 30, with almost a fifth of that coming from the tactical missile systems unit that makes the Switchblade. The company’s Nasdaq-listed shares are up roughly 18 per cent since the start of the war in Ukraine, but at $78.99 its stock price is still below a peak of $137.94 reached in February 2021 when Cathie Wood’s Ark investment funds acquired a large stake. It also faces the same supply chain constraints that are putting pressure on larger defence companies and other manufacturers, in particular a shortage of microprocessors, while contending with high labour costs in a tight jobs market. But thanks to its success on the Ukrainian battlefield, “AeroVironment’s long-term outlook is as strong as ever”, according to DiPalma. Nawabi, born and raised in Afghanistan, fled the country in the early 1980s during the Russian invasion. “Isn’t this ironic?” he asked. “As a teenager, I left and the Stinger missile was the game changer,” he said, referring to the system developed by Raytheon. “And now, I am working at a company that makes things that [are] fighting the same enemy in a different country in a different timeline.”

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here

    Must Read

    spot_img