Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



How to Fight a Nuclear War on the Cheap

Long-range. High-flying. Super stealthy. By 2020, the United States Air Force hopes to develop a new type of long-range bomber that will be all of these things. Problem is, the Air Force also wants to spend upwards of $55 billion building a new bomber capable of carrying out strikes with both conventional and nuclear arms. That's quite a pretty penny. But is there a way to support the third leg of America's "nuclear triad" ... on the cheap?

Boeing's B-1 bomber. Nuclear strike capability on the cheap. Photo: Wikimedia Commons.

As a matter of fact, there may be. As a matter of another fact -- Boeing (NYSE: BA  ) is already doing it.

This week, Boeing confirmed that it has begun delivering to the USAF a baker's dozen of "new" bombers. Actually, they're old bombers -- B-1 Lancers originally built by Boeing for the Air Force back in the 1980s. But capable of flight at altitudes up to 60,000 feet, and flying at speeds past Mach 1.2, they're perfectly serviceable bombers for most missions. And thanks to a new Air Force program to upgrade the warbirds, America's B-1 fleet could soon be transformed into what the website The Aviationist calls a "brand-new aircraft."

B-1 bomber, showing its stuff, and giving viewers vertigo. Photo: Wikimedia Commons.

To date, Boeing has won three separate "Lot" contracts for upgrading the B-1:

  • A $99.5 million July 2011 award to "integrate ... the Vertical Situation Display Unit in the forward cockpit and ... the Fully Integrated Data Link and the Central Integrated Test System in the aft cockpit" on four B-1s -- upgrades collectively designated the Integrated Battle Station, or "IBS."
  • A follow-on $65.8 million award to upgrade nine more B-1s with IBS, awarded in June 2012.
  • A subsequent third award for $59.8 million, covering upgrades on 10 more planes.

Boeing says the upgrades "provide B-1 bomber aircrews with a higher level of situational awareness and a faster secure digital communication link ... and will make the B-1 cockpit more reliable and supportable." Over the next five years, each plane will be equipped with multiple multi-functional color displays to monitor their data. New wiring, digital avionics, data links, electronic maps, and aircraft performance monitoring computers will also be installed.

With a completion date targeted for 2019, all 62 of the Air Force's B-1s should be upgraded before the 2020 deadline for the Air Force wanting its "new bombers." Best of all, the Air Force will be getting these planes at a very nice price.

Nuclear math
To date, Boeing has won three IBS upgrade contracts to supply upgrade kits, spare parts, and engineering support needed to upgrade 23 aircraft at a total cost of $225.1 million. But the cost of upgrading each incremental plane is falling as the work progresses. At the most recent rate -- $6 million spent to upgrade each plane in Lot 3 -- it appears the Air Force could end up spending less than $460 million to upgrade its entire B-1 fleet.

That's less than 1% of the projected $55 billion price tag for building an entirely new fleet of stealth long-range bombers -- the B-3 bomber project.

How to fight a nuclear war on the cheap
And this raises an interesting question: If the Air Force is on track to refurbish 62 new long-range bombers by 2019, does it really need to spend $55 billion developing a new class of stealth bomber? Granted, with many B-1 bombers aged 30 and older, the fleet will need to be replaced eventually -- but not immediately. The U.S. Air Force Air Combat Command is on record saying B-1s will still be flying well into the "mid-2040s." Similarly, the Air Force's six dozen-odd B-52 bombers are expected to keep flying through 2040.

Are these planes as super-stealth as the planned B-3 bomber? Probably not. But B-52s have been serving America well for decades, and not one has been shot down since the Vietnam War. Stealth-wise, the B-1 is said to have a radar cross section 69 times smaller than that of the venerable B-52, and should be proportionately harder to hit.

That sounds pretty stealthy to me. Maybe even stealthy enough that we can just "work with what we've got," cut $54.5 billion out of the defense budget, and leave the B-3 unbuilt.

This one looks good. How about we take the B-3 off the drawing board? Illustration: Wikimedia Commons.

Stick with the classics
Just as with airplanes, sometimes, the best stock to buy is the one you already own. As savvy investors know, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Read/Post Comments (4) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 25, 2014, at 4:07 PM, sciencedave wrote:

    Agreed. The arms race needs to slow down. Pentagon will argue new and better warplanes mean greater deterrent to conflict. The opposite is more likely today. Unfortunately decision to go with B-3 will be a political decision not a practical one.

    Boeing and like have had good runs but future gains will slow. Expect big defense stocks pull-backs this year if politicians come to realize the unsustainability of B-3 costs.

  • Report this Comment On January 25, 2014, at 8:58 PM, ilsm50 wrote:

    When the wars end the money going into the Overseas Contingency Operations trough will dry up.

    The pentagon's moochers are on the dole, taking taxpayer welfare. When the perpetual war fiction is uncovered the moochers will go broke. If the losers were held to deliver to their contracts they would be bankrupt.

    Each March the GAO reports on the 100 top acquisition the pentagon runs, they average 46% cost overrun and 7 years late to deliver.

    Good thing the 100 programs (at $1600B) are not needed for defending the US.

    The 2014 pentagon budget at $500B not including the war funding is about the same in real dollars as during the Reagan build up.

    I would never hold moocher stocks, any one of which could be bankrupted if the US enforced the False Claims Act.

  • Report this Comment On January 25, 2014, at 11:59 PM, emuellner wrote:

    One problem with the above article:

    The B-1B no longer carries nuclear weapons; its nuclear capability was disabled by 1995 with the removal of nuclear arming and fuzing hardware.

  • Report this Comment On January 26, 2014, at 6:41 PM, typicalGeek wrote:

    Rich Smith obviously didn't research this very well.

    The B-1 Lancers CANNOT be used as a Nuclear bomber due to their supersonic flight capability. This is due to the New START treaty - in effect since 2/5/2011.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2808792, ~/Articles/ArticleHandler.aspx, 8/28/2015 1:46:56 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Rich Smith

As a defense writer for The Motley Fool, I focus on defense and aerospace stocks. My job? Every day of the week, I'm monitoring the news, figuring out the winners and losers, and tracking down the promising companies for you to invest in. Follow me on Twitter or Facebook for the most important developments in defense & aerospace, and other great stories.

Today's Market

updated 4 hours ago Sponsored by:
DOW 16,654.77 369.26 2.27%
S&P 500 1,987.66 47.15 2.43%
NASD 4,812.71 115.17 2.45%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/27/2015 4:03 PM
BA $131.87 Up +2.53 +1.96%
The Boeing Company CAPS Rating: ****