When Northrop Grumman was awarded its Low Initial Rate of Production (LRIP) Contract in January 2024 for the B-21 Raider, it seemed all was well.
The new bomber was considered a second-generation, smaller version of the famous B-2. By comparison, the B-2 would carry roughly half the payload of the B-2 but at a fraction of the cost of the 1980s “stealth bomber.”‘
B-21 Raider Stealth Bomber. Image Credit: Industry Handout.
“What could go wrong” when you are building a smaller version of something you have already perfected the design of,” was the sentiment at the time.
Then, the aerospace giant’s first-quarter numbers rolled in. Despite all of the promising news to date, Northrop Grumman has suffered a US $477 million loss on the B-21 program. Company executives have explained that the loss is due to unexpected costs in material acquisitions.
However, the loss supposedly paves the way for the program’s acceleration—provided that is a step the US Air Force (USAF) wants to take.
Northrop Grumman has blamed a spike in manufacturing costs for its B-21 Raider program for this 49 percent reduction in first-quarter profits. Paradoxically, these losses are reported while the US Air Force (USAF) calls for an augmented production run of 145 new-generation stealth bombers.
This would be an almost 50 percent increase from the original plan to acquire only 100 of this aircraft type. USAF officials say the increased numbers are necessary to respond to mounting threats to US security interests in several theaters of operation.
Previous Losses for B-21 Raider
This quarter’s downturn is not the first financial downturn from the B-21 program. Northrop Grumman reported a loss of nearly $1.2 billion from the program back in 2024. The latest news is revealed as the company admits to an oversized drop in profits combined with much lower-than-expected sales numbers.
When coupled with other previous financial reporting, the overall loss on the program amounts to some $2 billion.
The same company officials claim that these financial setbacks are ripple effects from changes in the B-21 program and are not a sign of canceled orders or other contractual issues. Nonetheless, in response to the quarterly reporting, the company’s share price fell by 10 percent in pre-market trading.
Company executives’ closer inspection reveals that the aircraft had “rework” costs, plus economic multipliers like inflation comprised some of the additional causes for increased costs. But the larger culprit appears to be process changes, which have turned out to be greater than the impact of climbing materials costs.
The B-21 Raider was unveiled to the public at a ceremony December 2, 2022 in
Palmdale, Calif. Designed to operate in tomorrow’s high-end threat environment, the B-21 will play a critical role in ensuring America’s enduring airpower capability. (U.S. Air Force photo)
Northrop President and CEO Kathy Warden spoke on the company’s reporting numbers but stated she was limited in what she could say due to the classification regimes associated with the B-21 design.
USAF representatives did not disagree with her assessment as to the cause of losses on the program, but the Northrop Grumman chief did admit that this charge on earnings was “not something we will need to do again.”
Beyond EMD for B-21 Raider
Warden stated that the company has already begun work under a second low-rate initial production lot contract and is completing the engineering, manufacturing, and development (EMD) phase of the program.
B-21 Raider. Image Credit: U.S. Air Force.
She made little to no comment on the aircraft’s flight test program, but she did say that preliminary work had begun on perfecting the B-21 configuration.
“We have … started some work on modernization, and we are building out the capability to train and sustain on the aircraft as well. So those will be gradually phased in over these next several years, and there isn’t change based on what we’re recording this quarter in that profile for the program,” she said.
The company’s Chief Financial Officer, Ken Crews, provided additional details, stating that these costs would be amortized across 2026, 2027, and 2028.
Changes to the B-21 manufacturing processes “positions us to ramp to the quantities needed in full-rate production,” Warden said. This will also include being able to “ramp beyond the [100 units to be built] quantities in the program of record.”
About the Author: Reuben F. Johnson
Reuben F. Johnson is a survivor of the February 2022 Russian invasion of Ukraine and is an Expert on Foreign Military Affairs with the Fundacja im. Kazimierza Pułaskiego in Warsaw. He has been a consultant to the Pentagon, several NATO governments and the Australian government in the fields of defense technology and weapon systems design. Over the past 30 years he has resided in and reported from Russia, Ukraine, Poland, Brazil, the People’s Republic of China and Australia.
