Building American Drones Means Building the Parts, PDW CEO Says

James Slider says U.S. drone leadership will depend on domestic production of motors, batteries, electronics and other critical components

By DRONELIFE Features Editor Jim Magill

Building a system capable of supplying the U.S. military with unmanned aerial systems to meet the challenges of the 21^stcentury will take a massive effort, to bring to American shores the production of not only the drones themselves — but even more important — the critical components that go into them, the CEO of a defense technology firm told DRONELIFE.

“America does not have an innovation problem. We know how to design, test and field great technology quickly. The challenge now is turning that innovation into production at scale,” James Slider, CEO of Huntsville, Alabama-based PDW Holdings, said in an interview conducted over email.

“Industry has to invest in the factories, people and supply chains required to do that, and government has to create a more predictable path from successful experimentation to sustained procurement,” he said.

In an indication of its own commitment to ramping up U.S. drone production, PDW recently announced it has received a conditional loan commitment of up to $820 million from the Department of War’s Office of Strategic Capital (OSC).

The company said it would use the funds “to expand domestic manufacturing capacity for the critical technologies and components behind the next generation of drones, robotics and autonomous systems and reduce America’s reliance on foreign-controlled supply chains, strengthening domestic manufacturing capability.”

Slider said the extensive use of small and medium-sized drones in combat in Ukraine has demonstrated the imminent need for the U.S. defense establishment to adopt the Ukrainian strategy for the rapid manufacture and deployment of UAVs.

“Ukraine made one thing very clear: innovation without production is potential, not capability. Drones are being consumed and adapted at enormous rates,” he said. “That makes affordability, rapid iteration, resilient supply chains and the ability to manufacture at scale just as important as the technology itself.”

The war in Ukraine has also exposed the risk to the U.S. drone industry of relying too heavily on foreign countries such as China for basic drone components such as motors, batteries, controllers and communications hardware, Slider said.

“The Iran conflict reinforced the same lesson around mass and replenishment. Relatively inexpensive drones can be employed in large numbers over sustained periods, which puts tremendous pressure on industrial capacity,” he said. “If you can’t replace what is being consumed, while continuing to field new capability, you have a readiness problem.”

Slider said the manufacturing of drones and other robotic systems has long depended on components acquired through international supply chains that are highly vulnerable to disruption by foreign adversaries.

“Motors and propulsion components, batteries and power systems, flight-control electronics, radios and communications components, cameras and sensors, and underlying materials like battery cells and rare-earth magnets all have exposure to foreign supply chains. A drone assembled in America is not the same thing as an American drone,” he said.

PDW and other U.S-based drone manufacturers face a particular supply vulnerability in regard to rare-earth magnets, which are a critical component of electric motors and other vital systems.

“We’re working with other mission-oriented American companies to help build more robust domestic supply chains, but we have not announced specific sourcing arrangements or plans for rare-earth-containing components,” Slider said.

He said PDW also plans to use part of the funding from the Pentagon contract to create manufacturing capacity across critical component technologies such as propulsion, power, control, communications and sensing.

“What American drone companies need is a reliable domestic supply of critical components at real volume. That includes motors, batteries and power systems, radios and communications hardware, flight-control electronics and sensing technologies,” he said.

“And the goal isn’t to build that capacity just for PDW. We want to help create a stronger domestic supply base that other American manufacturers can benefit from as well.”

PDW to focus on manufacturing in Huntsville

For its part, PDW plans to concentrate on the manufacture of drones and component parts at its 90,000-square-foot production facility in Huntsville, Alabama, known as Drone Factory 01. The company has not announced specific plans to use the OSC loan to finance facility expansion or new construction plans associated with the financing. Instead, Slider said PDW would continue to operate with Huntsville as PDW’s headquarters and the center of its scaled manufacturing operation.

He also declined to provide detailed information as to how PDW would use the funds from the Pentagon loan to finance new production projects, but said such projects are in the offing.

“The investment is designed to create manufacturing capacity across critical technologies, but we have not disclosed the specific production roadmap for each category,” Slider said. “The important thing is that we make these investments now. You cannot wait until a crisis starts to figure out how to build the components you need at scale.”

He added that the company’s goal is not just to increase manufacturing capacity for the sole benefit of PDW. “We want to help create a stronger domestic supply base that other American manufacturers can benefit from as well.”

Slider said it is important for defense-oriented drone producers such as PDW to beef up their production of drones and component parts rapidly to serve the growing needs of the U.S. defense establishment.

“The military needs capable systems, but capacity alone isn’t enough. Those systems also have to be affordable, producible and replenishable at scale,” he said. “That means resilient communications, autonomy, sensing, power and propulsion, along with a domestic manufacturing base capable of moving quickly from successful experimentation and small initial buys into sustained production.”

He said the U.S.-based drone industry has proven its ability to quickly innovate in order to meet the needs of a rapidly evolving defense drone environment. “Now we have to get equally good at producing quickly.”

Read more:

• DRONELIFE Exclusive Interview: Inside PDW’s Strategy to Build Drones That Can Operate When GPS and Communications Fail
• The White House Wants Drone Dominance. How Much of the Supply Chain Must Be American?
• Drone Dominance: The Defense Department’s Push to Build a Scalable U.S. Drone Supply Chain