Defense Industry Lobbies for Piece of the Overseas Drone Market

Looking to expand their sales of unmanned aerial vehicles, otherwise known as drones, to overseas markets defense contractors are lobbying to have export restrictions removed. The Los Angeles Times reports that companies such as Northrop Grumman are eager to tap into the foreign market as drone manufactures from Israel and China have already done.

The worldwide market for drones is growing, and US companies want in on the action. According to the Teal Group’s 2012 market study, spending on drones will “almost double over the next decade from current worldwide UAV expenditures of $6.6 billion annually to $11.4 billion, totaling just over $89 billion in the next ten years.” The study says that this growth will take place despite cuts in defense spending. The study also noted that “the US will account for 62% of the worldwide RDT&E spending on UAV technology over the next decade, and 55% of the procurement.”

Israel is among the leaders in the international drone market. Israel Aerospace Industries, a state-owned defense and aerospace company, has made multimillion dollar deals with multiple countries over the last few years. In 2010 IAI inked a $400 million deal for drones with Russia, and last year the company sold $220 million in drones to India. Now the IAI is looking towards South America, as countries such as Brazil and Chile look to make deals worth more than $100 million for the drones.

Democratic Congressman Howard Berman, a member of the House Foreign Affairs Committee, told the Times that it’s “crazy for us to shut off sales in this area while other countries push ahead.” The defense industry has given generously to Foreign Affairs Committee members. During the 2012 election cycle the industry gave $572,955 to members’ campaigns; Rep. Berman has received $34,000 in campaign contributions from the industry.

General Atomics Aeronautical Systems, which builds the Predator and Reaper drones used by the Air Force and CIA for targeted killings, has reportedly developed a new unarmed drone called the Predator XP that might not be subject to the same restrictions. In the last decade GAAS’ parent company, General Atomics, has spent millions lobbying Congress and contributing to Congressional campaigns. According to the Center for Responsive Politics, since 2003 General Atomics has spent $20.3 million lobbying Congress on issues dealing with homeland security, defense, and budget and appropriations. Since the 2002 election cycle, the General Atomics political action committee has donated more than $2.5 million in campaign contributions to federal campaigns.

The drone industry even has its own caucus. The House Unmanned Systems Caucus is a bipartisan group of sixty Congressmen whose stated goal is to “educate members of Congress and the public on the strategic, tactical, and scientific value of unmanned systems.” The drone caucus is co-chaired by Republican Congressman Buck Mckeon. During the 2012 election cycle Rep. Mckeon received more than $429,000 in campaign contributions from individuals and PACs from the defense industry. Mckeon’s top five donors during that election cycle were Lockheed Martin, Northrop Grumman, General Dynamics, General Atomics, and Boeing.

While the large defense companies look for a way into the overseas drone market, smaller defense companies are already exporting them overseas. The Missile Technology Control Regime prevents the sale of drones overseas that can carry 1,102 pounds for more than 186 miles at a time. This has opened the door for manufacturers of small drones to sell to overseas markets.

Vanguard Defense Industries is reportedly selling its Shadowhawk helicopter drone to unnamed countries in the Middle East, and to countries in South and Central America such as Panama, Colombia, and Mexico. While Vanguard’s drone has gained notoriety because of its use by domestic law enforcement, the company’s best customers are from overseas. Vanguard’s CEO Michael Buscher told the American Independent that projects its domestic sales for next year to be between $35 million and $40 million but that the company’s “bread and butter is still going to be overseas foreign military sales.”

While the defense industry sees increased profits, critics see an increase risk of the proliferation of drones. Daryl Kimball, executive director of the Arms Control Association told the Times that “the proliferation of this technology will mark a major shift in the way wars are waged. We’re talking about very sophisticated war machines here. We need to be very careful about who gets this technology. It could come back to hurt us.”

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