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To Win a $55 Billion Stealth Bomber, Boeing and Lockheed Get Cozy

The B-52, like the one seen here, is what the Air Force needs to replace. Photo: Wikimedia Commons. 

The two biggest defense contractors in the world, Boeing (NYSE: BA  ) and Lockheed Martin (NYSE: LMT  ) , have just teamed up to bid on the Air Force's next generation-stealth bomber -- a contract that's estimated to be worth $55 billion. This move is brilliant, and frankly, it's absolutely horrible news for any other defense contractor that wanted to win the bomber contract. Here's what else you need to know.

Titans of defense
In the defense world, there's no bigger name than Lockheed. It's the top dog when it comes to defense revenue. However, Boeing closely follows it. Moreover, both companies have had their fair share of experience when it comes to planes. Plus, they've both won some of the Air Force's most expensive, and thereby lucrative, contracts -- Boeing won the KC-46 tanker contract, and Lockheed won the F-35 contract.

Now, they've teamed up to win the Air Force's next-generation stealth bomber. More specifically, Boeing will be the prime contractor, and Lockheed the primary subcontractor, according to Reuters. This move is probably unwelcome news for Northrop Grumman (NYSE: NOC  ) which has also said it plans to bid on the new bomber. 

What to watch
As I previously wrote, the Air Force desperately needs new bombers, as right now, it's relying on the B-52s, which have been flying since the 1960s. More pointedly, the Air Force has been trying to acquire 100 long-range strike-bombers for years but have been unable to, for a number of reasons. Now however, conflicts are shifting from the Middle East to Asia, and that makes the need for a new bomber even more essential. Consequently, Air Force officials have labeled the new bomber a top acquisition priority and have said the Air Force needs new bombers by 2020.  

Boeing and Lockheed's teaming is a serious threat to any other defense contract that's hoping to win the bomber contract, but that doesn't mean other defense contractors don't stand a chance. For example, if Northrop teamed up with EADS' Airbus, that would also be a teaming of the titans -- plus, they've teamed up in the past. There's no word that that will happen, but if Northrop is smart, it'll look into it. As they say, it's not over till the fat lady sings. Still, Boeing and Lockheed's teaming up is something to watch.

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Read/Post Comments (8) | Recommend This Article (6)

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  • Report this Comment On October 26, 2013, at 11:22 AM, Gramcheck wrote:

    "As I previously wrote, the Air Force desperately needs new bombers, as right now, it's relying on the B-52s, which have been flying since the 1960s. More pointedly, the Air Force has been trying to acquire 100 long-range strike-bombers for years but have been unable to, for a number of reasons."

    Katie, Katie, Katie... give that a quick read.

  • Report this Comment On October 26, 2013, at 11:45 AM, doawithlife wrote:

    Our government giving all of Lockheeds plane tech to Boeing?

    Bout time, I hate Lockheed. Always over budget and underperforming.

  • Report this Comment On October 26, 2013, at 2:30 PM, meyervw wrote:

    Didn't the AF just have a huge money issue and grounded mst aircraft due to financial problems but they have 55 BILLION to spend on something worthless.

  • Report this Comment On October 26, 2013, at 5:35 PM, Liteflyt wrote:

    So what can't the B2 do that this "New" bomber


  • Report this Comment On October 26, 2013, at 9:25 PM, Fight4Justice wrote:

    The US government has 19 'active' stealth bombers of which the last one was built November 10, 1997 and the other 144 were cancelled. A legacy of the Cold War of which we don't use what we have so exactly why do we need $55 Billion more of the same?

  • Report this Comment On October 26, 2013, at 10:09 PM, sgabela wrote:

    Yes we need new Bombers, but the initial price is 55 billion but the time is completed expect the price to tripple. doesnt always happen?

    The presidential Helicopter fleet was cancel because of overruns. Boeing and Lockheed are very good at that.

  • Report this Comment On October 27, 2013, at 3:16 AM, practicalnurse wrote:

    This may sound like a foolish question, but why do we even need a new multi billion dollar stealth bomber??? What in the world for? "Yes we need new Bombers" the story says. Oh really? Who is a real military threat to us that we need to waste money on this sort of stuff? OK so America needs jobs - can't we employ people in industries that are peaceful and that actually build up instead of destroy? This sort of reminds me of the history of pre WWI. There hadn't been a major war up to that time for literally centuries, but just about every country was in an arms race with one another. So when crisis came war was considered a viable option because of all of the military buildup that had gone on during the previous decades. I could think of a lot better uses for 55 billion dollars of our tax money

  • Report this Comment On October 27, 2013, at 3:41 AM, SeniorMoment wrote:

    Why does America need a new bomber? It has the F-35C plus big carriers which will give it an extreme long range capability, it has cruise missiles and new generations of drones.

    In other words it already has more long-range capability than the rest of the world put together.

    Or to be really savage why should it have this ultra long range capability when it can't defeat a bunch of mop headed fanatics driving around in Toyota pick ups?

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7/29/2016 4:00 PM
BA $133.66 Up +0.65 +0.49%
Boeing CAPS Rating: ****
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Lockheed Martin CAPS Rating: ****
NOC $216.63 Down -0.60 -0.28%
Northrop Grumman CAPS Rating: ****