The Wall Street Journal
By Julian E. Barnes and Doug Cameron
Updated Oct. 25, 2013 7:25 p.m. ET
Boeing Co. and Lockheed
Martin Corp. plan to make a joint bid on a new bomber to replace the
aging B-52s and B-1 jets used by the U.S. Air Force.
The Air Force wants to
develop and acquire as many as 100 Long-Range Strike Bombers costing up
to $550 million each that it would like to see entering service by the
middle of the next decade.
A successful bid would
result in the Air Force's three priority programs being overseen by the
world's two largest defense contractors by sales, with Lockheed already
leading the F-35 fighter jet and Boeing building a new aerial-refueling
plane.
The move presents a
challenge to Northrop Grumman Corp. if it seeks to bid, with only a
small band of potential partners. Northrop was the last big U.S.
contractor to build a bomber, the bat-winged B-2.
With the Air Force
initiating new bomber programs only every 30 years on average, none of
the big contractors can claim to dominate the sector. While Boeing and
Lockheed—with a mixed record of working together—have the financial heft
and expertise, Northrop has carved a niche in unmanned systems. The Air
Force has said it is exploring plans to modify the plane after it is
built so it can be flown remotely, like a drone.
The emergence of new
threats and potential alternatives such as missiles and drones has
derailed previous efforts to start replacing the existing fleet, even
though the average age of the B-52—the last bomber built mainly by
Boeing—has pushed above 50 years.
Boeing and Lockheed were
going to team up to bid on the Next Generation Bomber, but that program
was canceled by the Pentagon in 2009.
Northrop Grumman saw the
B-2 program, which dates back to the late 1970s, cut to just 21 jets
from an initial plan of 132. The company declined to comment on the Air
Force bomber program.
The Air Force has
earmarked $8.7 billion for research and development on the bomber
project over the next five years, though it has yet to seek any bids on a
potential contract. It declined to comment Friday.
"The team will be able to
produce unique and affordable solutions that could not be achieved
without partnering," Boeing and Lockheed said in a joint statement
Friday.
The partnership was first reported by The Wall Street Journal.
Boeing's plan to be the
prime contractor for a new bomber would provide it with work at a time
when its attack-aircraft business faces a declining order book.
The F-35 program is
taking an ever-larger share of the Pentagon budget, pressuring sales to
the Navy of Boeing's F/A-18 carrier-based jets. The F/A-18 line has
enough orders to keep running until 2016, though Boeing is chasing more
overseas orders; its F-15 fighter, an Air Force jet sold mostly abroad,
has enough business to keep going until the end of the decade.
"This will have no effect
on our current or future fighter business, and interest remains high in
the international variants of both F/A-18 and F-15," Boeing said of the
bomber bid.
Air Force officials have said plans for a replacement bomber shouldn't be derailed by current Pentagon budget pressures.
"The Long-Range Strike
Bomber, the interesting thing about that is that the real money goes
into the program in the future," acting Air Force Secretary Eric Fanning
told reporters last month. "That won't give us savings when we're at
our most vulnerable."
Boeing and Lockheed have a
history of partnerships, including work on the space shuttle and
missile defense projects. But Boeing lost out in the fighter contest won
by the F-35. The two defense contractors also came to blows a decade
ago when Boeing improperly acquired thousands of pages of proprietary
Lockheed documents in an effort to secure rocket contracts.
Boeing paid $615 million to settle the allegations, which also related to its hiring of a former Pentagon procurement official.
Shares in both companies hit 52-week highs Friday. Boeing closed up 1.7% at $131.19, with Lockheed ending 1% higher at $134.
Source: http://online.wsj.com
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