NEW YORK, Jan 25 (Reuters) - Lockheed Martin Corp and Boeing Co, the two largest U.S. defense contractors, said on Friday they will team up to compete for the country's next long-range bomber, which the U.S. Air Force wants to deploy in 10 years.
The two will face competition from Northrop Grumman Corp, which has said it plans to bid for the new bomber contract -- a deal that defense analysts say could be worth $10 billion or more.
Northrop, the No. 3 U.S. defense contractor, built the last U.S. long-range bomber, the B-2, but Boeing has more experience historically with that type of aircraft. Lockheed has focused recently on smaller jet fighters.
"This team is ready, willing and able to meet the requirements the U.S. Air Force will hopefully issue for this new bomber program in the next 18 months," said Darryl Davis, president of Boeing's Advanced Systems unit, on a conference call on Friday.
It is too early to say whether the plane would be manned or unmanned or to define any other specifications, Davis said.
The Air Force is expected to pick a winner late next year or 2010. Boeing and Lockheed said they would fund research on the project themselves until the Pentagon allocates funds to the program.
Company executives declined to give details on which company would take the lead on the program, or which company would build the airframe or systems.
But sources familiar with the companies' plans who did not want to be identified said on Thursday that under their arrangement, Boeing, the No. 2 Pentagon supplier, would be the primary contractor with about 60 percent of the deal. Lockheed, the world's largest defense contractor, would have around 40 percent.
SECRETIVE OPERATIONS
The research and development work will be led by the companies' most secretive and forward-looking operations, Lockheed's Advanced Development Programs unit and Boeing's Advanced Systems unit.
Lockheed approached Boeing to form the team, according to Frank Cappuccio, general manager of the Lockheed unit, known as Skunk Works.
The two companies, which have been working together in secret for the past 12 months or so, said on Friday they would combine to "perform studies and system development efforts" on the new plane, including work on sensors, network battle management and virtual warfare simulation.
Boeing and Lockheed often compete against each other for big Pentagon contracts, but they worked together on the radar-evading F-22 fighter jet, the Small Diameter Bomb program, and recently merged their government rocket launch units into a joint venture.
The U.S. Air Force announced plans for a new long-range bomber several years ago, but the program has not received much attention or funding in the regular defense budget because of competing budget demands.
According to defense experts, plans call for the new bomber to be subsonic, manned and have a range of about 2,000 miles.
Developing a new bomber from scratch could be costly, but defense analysts say the Pentagon may already have spent billions on early conceptual work from its classified budget.
A new bomber is needed to upgrade the Air Force's aging bomber fleet, which is based on 1970s technology and expensive to maintain, said Lockheed's Cappuccio. "It's really an economic thing with the government," said Cappuccio. "They have to recapitalize or go bankrupt holding onto a 1979 Chevy. Would you want to hang on to your 1979 Chevy for another 20 years? They have to do something." (Reporting by Bill Rigby in New York and Andrea Shalal-Esa in Washington; Editing by Brian Moss and John Wallace)
