Performance Drone Works (PDW), which last week received a conditional loan commitment from the Defense Department to supercharge its capacity and capabilities for making key drone components, expects to support domestic production of one million small unmanned aircraft systems (UAS) annually, the company’s chief executive said.
The $820 million loan should be finalized in the next three to six months and at that point it will take about two years to further expand, boost capacity and acquire the talent to build and support production of one million drones per year, James Slider, PDW’s CEO, told sister publication Defense Daily.
The massive loan is necessary to help the U.S. overcome the deficit it has in drone production versus its adversaries, China and Russia, which are producing millions of unmanned aircraft systems, Slider said.
“And we looked at a model of how would you replicate the level of production efficiency and proficiency to get into a million drones a year?” he said in an Aug. 4 interview. “What would that take? What is the scale? What is the machinery? What is the staffing? And we built backwards from the goal of being at that level of performance.”
Capacity Expansion
PDW currently has a 90,000 square foot manufacturing facility in Huntsville, Ala., Drone Factory 01 but the company will need to add more capacity to dramatically increase production of drones and key parts, hence the pending loan from the Pentagon’s Office of Strategic Capital.
“A substantial amount of our expansion plan is additional CapEx and facility expansion,” Slider said. CapEx refers to spending by a company on things like land, buildings, tools, machinery, information technology and vehicles.
Across all of U.S. industry, Slider said it is his understanding that domestic drone production capacity is between 100,000 and 300,000 annually versus “millions” being produced by adversaries.
Another focus area of Slider’s is hiring, in particular “finding best-in-class talent across the country” to “help us industrialize drones and then the broader kind of robotic base,” he said.
The Army is buying small numbers of PDW’s small drones, the C100, for its Company-Level Directed Requirement sUAS program to inform the future Medium Range Reconnaissance requirement. Eventually, PDW hopes to build five or six different models of small drones, Slider said.
Adding Expertise
The U.S.’ lag in manufacturing massive quantities of drones has stemmed in large part from the lack of a demand signal, which DoD is trying to solve through its Drone Dominance Program, but also due to a supply chain that is heavily reliant on components made in China. OSC’s pending loan to PDW is aimed at onshoring and building out the domestic supply chain for propulsion, power and control, vision systems, and other key components used in small UAS.
The startup’s expertise around specific parts is in the airframe design, including the hardware and injection molded plastics, which has given PDW “intimate knowledge” of other key components such as sensors and motors, what makes them good, and how they can be scaled, all of which is being leveraged in the expansion plan, Slider said.
PDW already designs some drone components that are produced by other companies, and the future design of other subsystems will be new to the company, but the plan is to bring all of that related production in-house, he said.
Expansion plans could include acquisitions but given that industrialization of drone components is nascent, Slider said he assumes a lot of what’s ahead “is going to have to be bootstrapped by PDW.” He added that “speed of execution is really critical to this plan.”
PDW recently made its first acquisition, Vanteon Wireless Solutions, a designer and engineer of electronic systems (Defense Daily, June 5). Slider said Vanteon gives PDW expertise in wireless performance design that the company will scale and build on as it industrializes drone production.
The Vanteon deal was a “first step into this vertical supply chain model,” Slider said.
Onshoring a supply chain that is embedded in China and in many cases barely exists elsewhere “I view as neither simple nor unachievable,” Slider said. The goal is to go beyond copying what China does and innovate in the design, and produce components better in the U.S. while overcoming higher labor, material and energy costs, he said.
“I think it’s more a matter of the first stage is replicating what has been successful in China as far as fabrication and manufacturing methods, and the next stage is doing it better,” Slider said. “How do we produce a better motor? Can you stamp that part instead of CNCing [Computer Numerical Control machining] it? Is there a better way to wind and automate material handling that’s less labor intensive? The way we achieve cost and performance parity with China is through innovation, not through proxying their exact methods.”
DoD’s demand for drones has been driven by lessons learned in Ukraine’s war against Russia’s illegal invasion of their country where small, inexpensive UAS, and even larger ones, are giving both sides more tactical situational awareness, and more tools to kill each other and attack infrastructure.
A version of this story originally appeared in sister publication Defense Daily.
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