Petters: Path for unmanned underwater market 'yet to be really settled'

By Marjorie Censer  / October 1, 2018

The development of the unmanned underwater vehicle market likely won't track the path of the unmanned aerial vehicle market, the chief executive of Huntington Ingalls said last week.

In an interview with Inside Defense, Mike Petters said he views developing UUV technology as far more challenging.

"It would be easy to throw up on the board the history of what happened to the UAVs and say that's the path that the UUV space is going to follow," he said. "I'm not sure that it will for a lot of reasons, but one of them is I think the physics is just different for UUVs than it is for anything else."

"I just think the technology is fundamentally different," Petters added.

"Autonomy is harder in a hostile environment so, as a result, I think . . . it's going to be a more methodical and deliberate and disciplined approach," he continued. "Five or six years ago, I would've said that most of the development in that space was going to happen in the commercial side. . . . Now that that market space has changed a lot, I'm not sure that's the case."

Petters pointed to the decline in the price of oil as the driver of change in the commercial market.

"Is the commercial space going to draft the government or is the government going to draft the commercial space? We're not sure," he said.

Still, Petters said the Navy has made clear to industry it wants to move relatively quickly with UUVs.

"It seems to me that in this space, there's a willingness to fail fast," he said. "You don't always get that in government procurement but, in this space, there seems to be a willingness of, 'Maybe we don't have to pick just one. Maybe we'll pick three or four and see which one works the best. And, oh by the way, we're going to pick the three or four that can get us there sooner so bring what you've got.'"

Meanwhile, he said Huntington Ingalls is beginning to consider its next capital investment plan as its five-year, $1.8 billion plan is slated to end in 2020.

"At that point [after 2020], you really kind of step back and say what is the sustained level going to be," Petters said. "If you are really going to be at a sustained level of production that would be 40, 50 percent higher than it has been for the last 30 years, then that would probably require some more capital investment on our part."

The company's current capital plan was developed before the Trump administration indicated it would like to grow the service to 355 ships. However, Petters said the improvements the company has made thus far have created some new capacity within the business.

"We're always kind of working our way through what's it going to be year over year, what's it going to be over the next five years, what are the things we're going to have to invest in in the next 10 years," he said. "At this point, we're kind of at the point of here's some things we might have to go do if these kinds of decisions were made. I'd say it's all thoughtful, but soft."

Petters said he remains optimistic about Navy shipbuilding spending.

"The last two years have been really, really good," he said. "Now you've got to go get all that stuff under contract, and you've got to work your way through that process of contracting. . . . A lot of it's going to happen for us in the next 18 months."

He said the company is in discussions on a contract for a two-carrier buy.

"Every day that goes by that we don't have a deal cuts into the amount that you can save," he said. "If we had our druthers, we would have already had this done a year ago or 18 months ago. Having said that, 18 months ago was when we put it up on the table and said, 'This is something we need to go do,' and we're here and we're happy that we're in this place where we're actually in business discussions with the department to try to figure out how to put together a contract."