Bloomberg News

Lockheed-Boeing Plan Joint Bid to Build Next U.S. Bomber (3)

October 25, 2013

Lockheed Martin Corp. (LMT:US) and Boeing Co. (BA:US), the No. 1 and No. 2 U.S. defense contractors, will bid as a team on the U.S. Air Force’s planned long-range bomber, a potential $55 billion project.

Boeing will be “the prime contractor, with Lockheed Martin as the primary teammate,” Chicago-based Boeing said today in a statement. The companies had competed on the F-35 fighter, with Bethesda, Maryland-based Lockheed winning that project.

The Air Force has said it may build as many as 100 of the bombers, delivering the first of them in the mid-2020s, at an estimated cost of $550 million each. Boeing and Lockheed may end up in a contest against Northrop Grumman Corp. (NOC:US), which is the prime contractor on the B-2, the Air Force’s current stealth bomber.

“It’s likely Northrop is competing, and I think they’re the one to beat” because of their experience with the B-2 and in building key components for the F-35, said Kevin Brancato, a defense analyst with Bloomberg Government.

The project reflects the Pentagon’s commitment to strategic weaponry amid declining defense spending and limits such as the current budget cuts known as sequestration. The Air Force has requested $379 million in funding this year for development of the bomber, increasing to more than $1 billion in fiscal 2015 and $2.8 billion in fiscal 2018, according to data released by the service.

‘Unmanned Capability’

Lockheed rose 1 percent to $134 at the close of trading in New York, and Boeing climbed 1.7 percent to $131.19. Northrop Grumman, based in Falls Church, Virginia, rose less than 1 percent to $108.37.

Boeing ascertained in advance that Air Force officials were comfortable with the idea of a joint Boeing-Lockheed bid, according to Todd Blecher, a Boeing spokesman.

Northrop, which sees the bomber “as vital to both national security and the power-projection capability of the U.S. Air Force,” won’t comment “on other companies’ business arrangements,” spokesman Randy Belote said in an e-mailed statement.

The Air Force has identified the long-range bomber as one of its top three weapons projects, along with the F-35 and the KC-46 aerial refueling tanker.

An Air Force summary describes a stealth aircraft able to deliver both nuclear and conventional bombs. While the “baseline aircraft” would be piloted, the bomber would be designed to “enable future unmanned capability,” according to the service.

The Air Force said in its fiscal 2014 budget presentation that the bomber “must be able to penetrate the increasingly dense, anti-access/area denial environments developing around the world” and would incorporate “proven technologies.”

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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Companies Mentioned

  • LMT
    (Lockheed Martin Corp)
    • $196.84 USD
    • 0.41
    • 0.21%
  • BA
    (Boeing Co/The)
    • $131.63 USD
    • 0.39
    • 0.3%
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