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Military Decisions

Northrop Grumman Corp.’s odd-looking Global Hawk aircraft might better have been named the Phoenix, since the bird seems to be rising from its own ashes.

In a reversal, the Pentagon said that it wants to use the unpiloted Global Hawk for high-altitude U.S. Air Force spy missions while retiring the U-2, a Cold War-era manned aircraft. One year ago, it looked as though the Pentagon would mothball some of its recently delivered Global Hawks and keep the U-2 flying at the edge of space.

Northrop Grumman (NYSE: NOC) bases its Global Hawk program in Rancho Bernardo and does engineering and software work in San Diego’s North County region. The defense contractor builds the aircraft in Palmdale.

The resurgence of the Global Hawk and the retirement of the U-2 are part of the fiscal 2015 budget request that the Pentagon plans to submit to Congress on March 4.

Global Hawk may not be the only thing poised to come back. Defense

Secretary Chuck Hagel said on Feb. 24 that he plans to ask Congress for permission to conduct a new round of military base closures as part of a broader effort to reduce the federal budget. Hagel wants to conduct the base realignment and closure, commonly referred to as BRAC, in 2017.

Meanwhile, Hagel and senior Pentagon leaders laid out the main points of their budget proposal in news conferences on Feb. 24. The budget blueprint is a long way from becoming law. Congress has yet to consider the proposal and will no doubt adjust it.

Troop Cuts Proposed

Congress recently decided to give the Pentagon some relief from a 10-year program of across-the-board spending cuts — called sequestration — in 2014 and 2015. Hagel used his Feb. 24 remarks to warn that sequestration could still damage troop strength and weapons programs. For example, the secretary warned that by 2016, the U.S. Navy may need to cut the number of aircraft carriers it maintains from 11 to 10.

The 2015 budget proposal calls for cutting troop strength. For example, the U.S. Marine Corps would be reduced from the current 190,000 Marines to 182,000 in 2015. It would be cut further to 175,000 if sequestration returns in 2016, Hagel said. Such reductions are bound to have ripple effects in communities flanking military bases, such as Oceanside and Fallbrook.

At the same time, the Pentagon wants to increase the number of special operations forces in 2015. That bodes well for Navy SEALs, who train in Coronado, and those who serve them.

While the budget will affect landlords and small businesses, it has implications for big businesses that produce aircraft and ships.

Hagel said the Air Force plans to slow the growth of its unmanned aircraft fleet but gave no numbers on how many remotely piloted planes it plans to buy in 2015.

General Atomics Aeronautical Systems Inc. of Poway supplies the Air Force with some of its biggest unmanned aircraft, the Predator and the Reaper. The Reaper is essentially a larger, heavier Predator that can carry more. Hagel said the Pentagon plans to buy Reapers until it has an all-Reaper fleet. GA-ASI is an affiliate of La Jolla-based General Atomics and is privately held.

General Dynamics Nassco got some good news: The 2015 budget proposal would fund a fourth mobile landing platform ship, which would go together at the Barrio Logan shipyard. The fourth ship of this class is also known as an afloat forward staging base. Nassco agreed to supply the first three ships of the program for $1.3 billion.

There was no word Feb. 24 on whether the Navy will proceed with its next-

generation fleet replenishment oiler program. The Navy said in July that it might buy as many as 17 of the fuel-carrying ships.

The Defense Department announced cuts to other shipbuilding projects, including the littoral combat ship, from a proposed 52 ships to 32 ships. The ships are not built in San Diego, but some will be stationed here.

Global Hawk Costs Reduced

The decision to keep operating the Global Hawk “was a close call,” Hagel said, given that the Defense Department had previously recommended retaining the U-2 instead because of cost.

“But over the last several years, [the Defense Department] has been able to reduce the Global Hawk’s operating costs. With its greater range and endurance, the Global Hawk makes a better high-altitude reconnaissance platform for the future,” Hagel said, according to a transcript of his remarks.

The Global Hawk can stay in the air for more than 28 hours, according to the Air Force. Its builder said the aircraft can attain altitudes greater than 60,000 feet. The Air Force said its U-2s can fly higher than 70,000 feet.

As of August 2012, a Global Hawk cost $222.7 million per unit, according to a March 2013 report from the Government Accountability Office. Northrop Grumman also makes money through services to keep the aircraft flying.

There may be an unseen component to the Pentagon’s unmanned aircraft decision. Aviation Week has reported there might be a classified spy drone called the RQ-180 — also built by Northrop Grumman — that is stealthier than the Global Hawk and can collect intelligence from high altitudes.

The Global Hawk aircraft program has deep roots in San Diego. It started as a design from Teledyne Ryan Aeronautical in the late 1990s. Northrop bought Ryan in 1999.

Lockheed Martin Corp. (NYSE: LMT) is the prime contractor on the U-2. The assertion that the U-2 is an old aircraft can be deceiving. Although the basic design is from the 1950s, the U-2s in the Air Force fleet were built in the 1980s, according to a recent BBC report. Engines, sensors and communications electronics have been upgraded in the years since then. The cost of a U-2 is classified, according to an Air Force website.

Possible BRAC Looms

If Congress authorizes a new round of BRAC, it’s unclear which local Navy or Marine Corps bases — if any — would be on the chopping block in 2017.

As in previous years, the business community will likely band together to fight base closures.

The last round of base closures, in 2005, brought minor reductions to San Diego while increasing the number of ships based at the Navy’s 32nd Street station.

A base closure round in the 1990s closed San Diego’s Naval Training Center, setting the stage for commercial development as Liberty Station. Closure rounds in the 1990s also sent the Navy’s Top Gun fighter pilot school to California’s Central Valley, converted the Navy’s airfield at Miramar into a Marine Corps base, and brought the Space and Naval Warfare Systems Command headquarters from Washington, D.C., to the venerable aircraft plant building in Old Town.

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