Northrop Offers to Add 40 B-2s to Air Force

Bloomberg News

Northrop Grumman Corp. is offering to build 40 B-2 stealth bombers for the Air Force at a fixed price and would absorb any cost overruns. The program would cost the Pentagon about $29.4 billion.

Northrop Chairman Kent Kresa told Defense Secretary Donald Rumsfeld in a May 15 letter that the company could reopen the B-2 production line and build each bomber for about $545 million. The Pentagon would have to spend $190 million more for equipment, training and support, making the final cost about $735 million.

"We are looking at [the offer] but we are just not ready to announce any programmatic response," said Rumsfeld's spokeswoman, Torie Clarke. Pentagon officials have talked of upgrading the current fleet with new avionics and an ability to carry as many as 324 small satellite-guided bombs, but not reopening the production line.

Northrop shares fell $1.04 to close at $86.98 on the NYSE.

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