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The U.S. Air Force on Tuesday picked Northrop Grumman to build a new bomber to replace its aging fleet of B-52 and B-2 planes.
The government could eventually buy 100 of the new planes, which are expected to include radar-evading stealth technology. Details about the new plane are secret.
The defense contract is worth north of $20 billion, and could potentially reshape the aerospace industry for years to come. Along with choosing Northrop Grumman’s bid, the government said it also chose other suppliers that will be involved in the project — such as the engine manufacturer.
The planes could go into service as early as 2025.
“The stealth bomber fleet that they have now is really only about 20 aircraft. So it is relatively small,” said Dan Wasserbly, a defense industry expert at IHS.
Those stealth bombers were built by Northrop Grumman, but the defense contractor was not assured a win of the latest contract bid. It had formidable competition from a joint bid by Boeing and Lockheed Martin.
“It is kind of a David and Goliath story, ” said aerospace analyst Richard Aboulafia of the Teal Group. “It was hard not to be surprised somewhat.”
Now that Goliath lost, Aboulafia said the industry is likely to restructure. “We now have two programs for the next decade in terms of production,” he said — One at Lockheed Martin and the other at Northrop Grumman. “So, from Boeing’s standpoint they’ve got some tough decisions to make.”
Wasserbly said Boeing and Lockheed Martin are likely to receive a debrief from the Air Force on why it chose Northrop Grumman’s bid, which is expected to amount to about $564 million per airplane.
Boeing may decide to challenge the Air Force’s decision in court or through auditors — a practice that has become common for defense contracts, he said.
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