Will three remaining seats become two in aerospace industry game of musical chairs?
Building weapon systems for the Pentagon has always been a complex process.
When the customer is the USAF, it’s even more so.
The current Lockheed Martin F-35 fiasco is a case in point, as was the Northrop B2 Spirit, the first true stealth bomber.
Both programs represent a catastrophic confluence of very complex engineering, changing program requirements and mind-boggling cost overruns.
The USAF recently announced the winner of their most recent weapon system contract, for the yet-to-be-named Long-Range Strike Bomber, and that winner was Northrop-Grumman.
The other competitor, the team of Boeing and Lockheed Martin, have naturally protested the decision to the US Government Accountability Office.
According to the Boeing-Lockheed Martin team, the government did not properly account for the potential of cost overruns in the program.
Is this sour grapes on the part of the loser?
What makes the LRS–B program different is that it may determine the fate of one of the biggest manufacturers of weapon systems in the world.
Things have changed a lot since the start of the Cold War. Fifty years ago, a B-52 looked expensive at a little less than $10 million, but a B2 today is literally a billion-dollar airplane.
These planes are so expensive, in fact, that only 21 have been built.
And the B-52? 744 were assembled by Boeing by the end of production in 1962, at plants in Seattle and Wichita. That’s a true production run.
The 21 airplane B-2 contract would be considered a pilot project by aircraft manufacturers of the 50s or 60s.
Is new technology so capable that it can replace 30 times the number of previous generation aircraft?
Maybe, but from a manufacturing perspective the key takeaway is that modern military aircraft are so expensive on a per-unit basis that mass production is no longer needed.
The Boeing/Lockheed Martin team produced the excellent F–22 Stealth fighter between 1996 and 2011.
Total production run? Eight test and 187 operational aircraft. The program cost, however, was $66.7 billion as of 2011.
It’s simple: military aircraft programs are stunningly expensive, but produce very little actual hardware.
The astronomical costs, however, coupled with low production volumes caused by the planes’ lack of affordability put the industry in a tough spot.
Military aircraft are now replaced with new designs over a span of decades, not years. Lose a contract today, and the company may not get another chance for a generation.
This puts Boeing and Northrop in a unique situation: for Boeing to stay in the military aircraft business, it’s most tactical move may be to buy Northrop Grumman.
With Boeing’s F-18 line scheduled to shut down in 2017, the company would have little more than air refueling tanker business on the books. And those airplanes are derived from Boeing civilian airliner technology.
There’s a very real chance that the three large US military aircraft contractors – Boeing Defense, Lockheed Martin and Northrop Grumman – could be two very shortly.
This means it’s musical chairs in the military airframe business right now.
That’s bad for business, and unless either the USAF or the industry itself finds a way to get costs under control and production volumes up, the result may be a seriously diminished production capability in US defense aviation.
If the Air Force needs a sudden ramp-up in production, could the industry respond?
In World War II, General Motors built Grumman fighter planes, using the highly efficient mass production methods developed at Fisher Body division. GM delivered over 5,000 airframes which was double the production total from Grumman itself.
Could the automotive industry handle production of fifth-generation aircraft like the F-22 or the B-2?
I don’t think so.
And besides, you’d have a hard time getting a manufacturing engineer out of bed for a production run measured in dozens.
