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The first B-21 Raider stealth bomber flight-test aircraft was successfully powered-on during the second quarter, a key milestone ahead of the initial flight that is expected during the second half of 2023, Kathy Warden, chairwoman, president and CEO of Northrop Grumman [NOC], said on Thursday.
Northrop Grumman did not provide more specific timing on the first B-21 flight, which is a largely classified program. Once first flight is achieved, the company expects to received the first low-rate initial production (LRIP) contract for the program, which will mark the start of the transition from the current development phase to manufacturing the next-generation bomber for the Air Force.
The program has come under cost pressure due to inflation, which is now abating, but the company was notified during the second quarter that the Defense Department has “allocated” $60 million in fiscal year 2023 funding toward LRIP procurement to help offset inflation impacts, Warden said during the company’s earnings call. The funding is just for one fiscal year, she added.
“And we continue to work closely with the government on an effort to address the impacts of macro-economic disruption,” she said.
Warden also outlined several opportunities the company must improve its operating margin in the coming years, including a focus on cost management. Part of its approach to cost management is incorporating digital solutions, including to improve program execution by “bringing together employees, customers, and partners into an integrated environment so they can seamlessly work together,” she said.
Digital tools are also being added to the B-21 program and have been “tied to advanced manufacturing technologies to realize over 15 percent labor efficiencies in one area of the build,” she said. In June, the program expanded the use of digital solutions “across the whole build process,” she added.
During the call, Warden was asked by one analyst whether the company will bid on the Air Force’s sixth-generation air superiority program, called Next Generation Air Dominance (NGAD). She replied that the company “quietly notified the U.S. Air Force” that it would not bid as a prime contractor.
Northrop Grumman has been responding to other potential prime contractors seeking supplier bids, she said, noting this work would be mainly done within the Mission Systems operating segment.
TD Cowen Washington Research Group yesterday called Warden’s no-bid decision on NGAD a “stunner,” leaving Lockheed Martin [LMT] and Boeing [BA] to duke it out.
Air Force Secretary Frank Kendall recently said only two teams were involved in the program.
The NGAD program includes manned and unmanned aircraft. The unmanned portion of the program is currently called Collaborative Combat Aircraft (CCA) and Warden said Northrop Grumman is “looking at it closely.”
Kratos Defense & Security Solutions [KTOS] and Boeing [BA] are at least two other companies interested in the CCA program.
Warden declined to answer whether Northrop Grumman will bid on the Navy’s version of an NGAD, the F/A-XX, which would replace the Boeing-built F/A-18E/F Super Hornet multi-role fighter.
Northrop Grumman has been wary of bidding on fixed-price development contract when it believes the risk and reward ratios are out of balance.
The company pursuing opportunities and as information comes out on programs, “you could assume that if we feel we’re well positioned and the government is appropriately balancing risk and reward, as I said, that would be a program we would pursue,” Warden said regarding the F/A-XX.
TD Cowen Washington Research Group in its client note said “We could foresee a scenario where Northrop teams with Lockheed on NGAD, teams with Boeing on F/A-XX and competed hard on the USAF’s Collaborative Combat Aircraft programs.”
Northrop Grumman has a portfolio of unmanned aircraft systems and builds fuselages for Lockheed Martin’s fifth-generation F-35 fighter and the F/A-18.
