The company has beaten out a team of Lockheed Martin and Boeing for the $80 billion contract.
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Air Force officials, who formally launched the bomber competition in July 2014, said the new aircraft is needed to replace the aging B-52 and B-1 bombers, whose average age exceeds 50 years and 27 years, respectively, and to counter increasingly sophisticated threats, such as advanced surface-to-air missiles. On Tuesday, the Pentagon released an independent cost estimate of $511 million per aircraft, down from an earlier estimate of $550 million, but the actual budget remains classified. From there, the Pentagon could elect to order as many as 100 new bombers in all, putting the full cost of the program close to $80 billion. A few have dubbed it “B-3”, since it follows the B-2, which entered service in the late 1980s.
Whether Boeing will formally protest could be decided in the next two weeks.
In fact, in many ways a bomber’s existence is most at risk during its development, before its first sortie.
Northrop has a big role in the Lockheed-led F-35 fighter, drones and satellite systems, and plans to shrink to three from four business units, combining parts of existing operations into a single mission systems segment. The Air Force refused to disclose the LRS-B’s future designation, how long it will be in development, how many prototypes would be built or even which contractor will manufacture the engines.
“We have the resources in place [and] we are ready to get to work”, Mr. Bush said on a conference call after Northrop reported its quarterly results, which beat market expectations. The LRS-B’s size, weight and payload remain unknowns, as do the extent of its stealth capabilities.
“We won’t go into any details relative to specific components or subcontractors due to classification and enhanced security”, Bunch said.
While the new plane’s specific capabilities are highly secret, it likely will be equipped with high-tech communications gear and other electronics that would allow it to perform a variety of missions, not just dropping bombs, according to news reports. The USAF then stated that both numbers are, in fact, wrong and that the actual ten-year costs (the first installment in the 30-year program) are $41.7 billion for each period.
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The defense contract is worth north of $20 billion, and could potentially reshape the aerospace industry for years to come. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover.
