Boeing wants to force Northrop Grumman’s hand to preserve a share in the US missile defense market

Frank McCall, Boeing’s director of strategic deterrence systems, said on Tuesday 17th September that his company was willing to lobby the US Air Force and Congress to secure a share in the Ground Based Strategic Deterrent (GBSD) program. Boeing withdrew from the competition last July, pretexting that its only remaining rival bidder Northrop Grumman enjoyed an unfair advantage since the acquisition of solid rocket motor manufacturer Orbital ATK.

Nicolas Jouan, Aerospace and Defense Analyst at GlobalData, a leading data and analytics company, offers his view on the latest move from the aerospace manufacturer:

“Boeing is tempted to force Northrop Grumman’s hand into collaboration in order to preserve its share in the US defense market. GlobalData’s latest US Defense Market report reveals that the company will rank first in research and development (R&D) related expenditures with a 24% market share in FY 2020, but will be third in platforms acquisition related expenditures with 16%, far behind first place Lockheed Martin on 34%.

“The GBDS aims at replacing the aging LGM-30 Minuteman III intercontinental ballistic missile fleet that entered service in the 1970s with an initial 10-year service life. The Air Force intends to invest US$570m in R&D in FY 2020 for a preliminary design of the Minuteman’s successor, a major component of the American nuclear triad. Boeing is a historic player of the US missile defense market, and is not ready to lose without a fight.

“Northrop Grumman will still have the single biggest share of missile R&D expenditure in FY 2020 according to our taxonomy, with 29% of the total. Nonetheless Raytheon and Lockheed Martin will grab 12% and 11%, respectively, adding to a 37% market share for their diverse joint programs including Aegis Ballistic Missile Defense. Isolation is a danger for Boeing, also confronted to multiple setbacks in other segments of the market. The F-15EX is still to be sold to Congress as a credible fighter alternative and the KC-46 Pegasus suffers major technical issues, while the grounding of the B-737 MAX badly impacted the company’s commercial business.”

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