Boeing Co. will join with one of its biggest rivals to win one of the largest defense contracts this country will see for a long time.
The aerospace giant announced plans Friday to team with Lockheed Martin in its bid to build a new generation of bombers for the U.S. Air Force.
The $55 billion job, which probably won’t be awarded for several years, is the only major military plane-making contract the Pentagon has left on the table right now. Winning it, analysts say, is essential to Boeing’s future in the military aircraft business.
While Boeing’s Hazelwood-based defense unit will be the lead contractor on the bid, teaming with Lockheed will essentially double its clout in Washington, where the two companies are expected to face off against Northrop Grumman. The partnership will also help Boeing offer the Air Force better technology at a lower price, the company said.
“The team will be able to produce unique and affordable solutions that could not be achieved without partnering,” Boeing and Lockheed said in a statement.
In the big-dollar business of military aviation, the stakes couldn’t be much higher.
Amid shrinking defense budgets, the Air Force has made the Long-Range Strike Bomber, designed to replace aging B-2s, a top priority. And after awarding the F-35 Joint Strike Fighter to Lockheed and the KC-46 Tanker to Boeing, the Pentagon has no other major planes in its development pipeline.
Whoever wins the bomber will sustain thousands of jobs for decades. But if Boeing loses the contract, what’s left of the old McDonnell Douglas could someday find itself out of the plane-making business altogether.
“If McAir has a future as an airframer it’s with this,” said Richard Aboulafia, a veteran defense analyst with the the Teal Group. “I can’t think of anything else worth noting.”
While the Pentagon’s precise requirements for the plane remain classified, Air Force officials have said they want something that can fly both staffed and, later, unstaffed bombing runs deep into well-defended airspace.
The Air Force will buy 80 to 100 of the planes and have set a price cap of $550 million apiece. That budget puts a premium on current technologies, said Air Force spokesman Ed Gulick.
“A lot of Air Force acquisitions are using existing technologies,” he said. “You can field something faster and keep requirements in check and have a better handle on costs.”
Both Boeing and Lockheed already have experience with the sort of stuff the new bomber is likely to need, from the advanced sensors of the F-22 to the strike capability of the F-35 to the stealthy, drone Phantom Ray developed at Boeing’s Phantom Works in Hazelwood. But so does likely competitor Northrop Grumman, who made the Air Force’s last bomber, the B-2, and whose X-47B stealth drone beat out Boeing for a Navy developmental contract in 2007. Still, analysts give the Boeing-Lockheed team good odds.
In the bare-knuckled but pragmatic world of defense contracting, these sort of tie-ups are not unusual on big jobs, as they help companies combine both technical expertise and political clout. Boeing contributes about one-third of the Lockheed-built F-22, while Northrop is a major supplier on Boeing’s F/A-18 Super Hornet.
Boeing and Lockheed had first agreed to collaborate, 50-50, on the bomber back in 2008, but parted ways two years later when the Air Force suspended the program. When it got moving again, they weighed their options before deciding to team up again, said Boeing spokesman Todd Blecher.
“Over the past year the two companies began looking at this kind of arrangement again,” he said. “They determined that working together would benefit the Air Force more than doing this a different way. They discussed it with the Air Force, and the Air Force agreed.”
Gulick said he couldn’t comment on the Air Force’s opinion of the collaboration. Aboulafia said both the partnership and the way it’s structured would probably help Boeing’s chances.
“They need to make this work,” he said. “And this time what they’re doing is having a clear program leader. A ‘marriage of equals’ means no one’s in charge.”
Should this partnership win the contract, having Boeing in the driver’s seat could benefit St. Louis.
The company’s Hazelwood assembly lines for the F-15, C-17 and F/A-18 are all likely to peter out by the time the Air Force wants to start taking delivery of the bombers in the mid-2020s. If Boeing plans to keep its experienced workforce here active, it will need a new product. Company executives have said in the past that St. Louis would be a strong candidate for a bomber assembly line, though Blecher said Friday that any location decision was still classified and Gulick said it was probably still too early in the process to know.
But in a recent interview with the Post-Dispatch, defense analyst Loren Thompson pegged the bomber as the best bet St. Louis had to keep active the assembly lines that have been pumping out planes, and employing thousands of people doing it, since World War II.
“Boeing’s the company to beat in this competition,” he said. “And that program is the best hope St. Louis has for maintaining a large workforce there.”
