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B-29 Super-fortress: An Aircraft Ahead of its Time at the Right Time!

George A. Haloulakos, CFA, is a university instructor, author and entrepreneur [DBA Spartan Research and Consulting]. His published works utilize aviation as a teaching tool for Finance, Game Theory, History and Strategy.

Abstract

This year marks the 75th Anniversary of the Boeing B-29 Super-fortress as its maiden flight occurred September 21, 1942. In a continuing series, this article is yet another financial reappraisal of historic or iconic aircraft. As the single most expensive weapons system undertaken by the United States of America during World War II, it warrants our attention in both financial and strategic terms. The goal of this article is to share new insights from a Finance perspective. Among the insights to be presented: (1) Profitability Analysis, (2) Added-Value from Delivery/Distribution Systems and (3) Return on Investment (ROI).


This research article is organized as follows: First, we present observations based upon research and analysis of open source references. Second is an explanation on our analytical approach that is a fusion of Finance, Strategy and Aviation. Third is a financial analysis that includes lessons learned.
Finally our closing thoughts address the legacy of the B-29.

Observations

  • Victory – the ultimate metric by which a military asset is measured – is synonymous with the Boeing B-29 Superfortress. In its commemorative May 2015 edition featuring spotter cards of World War II aircraft as inserts, Air & Space magazine described the B-29 as “The bomber that ended the war; the only one ever to drop atomic bombs in combat.”
  • As a technology driver, the B-29 generated spin-off benefits outside of combat that we continue to benefit from this present day! Its game-changing role in the aviation/aerospace industry makes the Superfortress a truly historic capital asset that goes well beyond nostalgia.
  • The B-29 was solidly profitable. Its financial gains demonstrate an efficient, well-run capital project that provided a most satisfactory use of public funds fulfilling both military and civilian purposes.

Finance, Strategy and Aviation: Evaluating Historic Capital Projects

Continue reading B-29 Super-fortress: An Aircraft Ahead of its Time at the Right Time!

THE B1 LANCER: VERSATILITY + VIGILANCE = VICTORY (THE ULTIMATE RETURN ON INVESTMENT FOR MILITARY ASSETS)

GEORGE_SPARTAN0001George A. Haloulakos, CFA DBA Spartan Research and Consulting, Core Adjunct Finance Faculty – National University and Instructor-Finance, University of California at San Diego (UCSD) Extention – See more at: http://businessthinker.com/#sthash.EjnEdLHH.dpuf

 

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ABSTRACT

Financial and strategic decision making requires a dynamic rather than static approach when measuring Return on Investment (ROI).  This is especially true with military assets where the stakes for success or failure cannot be assessed by mere accounting terms but whether or not victory is achieved.  Deployment of a military asset such as the B1 Bomber transcends the eternal debate of “guns versus butter” because how it is ultimately used may determine whether a nation, in this case, the USA, is able to survive and secure a peace in which liberty and freedom prevail rather than the peace of surrender.  Peace through strength is not adventurism but the ability to protect and defend the liberty and freedom of our citizens anywhere in the world.  The B1 Bomber has proven to be a very successful asset in securing this goal since entering service in 1985.  In this paper it will be shown that versatility, firepower, economy and efficiency are the foundation in which the B1 Bomber has achieved a superior ROI in quantitative and qualitative terms.  While the words “economy” and “efficiency” are often perceived as incongruent with assessing the value of military assets, context will be provided in this paper to properly understand why it applies with the B1.

Raison d’être for the B1 Bomber

If an enemy is determined on conquering you and uses all his or her resources to fulfill that objective, he or she is at war with you; and unless you contemplate surrender, then you are at war with that enemy!  Furthermore, unless you are considering treason, then your objective, like that of the enemy, is victory.  Since the end of World War II, our nation has dealt with such ongoing threats – namely the “Cold War” (1947-91) and the “War on Terror” (2001 – to date).  The B1 Lancer was designed, developed and eventually deployed to help achieve victory in such conflicts.  What makes the B1 story so compelling is how this aircraft evolved over time to remain relevant and viable as our military strategy itself has changed from massive retaliation to flexible response to precision targeting.  Ultimately its versatility and adaptability is why the B1 is one of the most important military assets in our arsenal of freedom.

Unlike previous generations of bomber aircraft, the B1, commonly known as the “Bone” [originally from “B-One”], has perhaps evoked far more discussion and analysis because of the nature of the 24/7 news cycle and digital media.  As such, in the popular press the B1 has been evaluated in the same manner as a new consumer electronics product or automobile.  As a practical matter, the technical difficulty of each generation of military aircraft increases geometrically, not arithmetically.  This means that to design, develop, test, manufacture and deploy a new aircraft requires at least 10-15 years.  To fully and properly evaluate such an asset requires a perspective and metrics that differs from the approach associated with disposable consumer and industrial products with short life cycles.  Moreover, it is not just a matter of throwing a switch and the plane is ready for flight but rather exhaustive testing is needed to make sure the new aircraft can fulfill its mission requirements with maximum safety for its crew.

A popular but mistaken criticism of the B1 was that it was accident prone because it incurred three crashes and seven mishaps during its first six years of operation.  Historic analysis [“A Tale of Two Bombers” authored by retired USAF Colonel Walter Boyne, July 2006] documents that the B1’s track record is noticeably better versus other, far less sophisticated bombers.  Colonel Boyne noted that over the first six years of operation, the B47 lost 176 aircraft (9% of the total B47 fleet) while the B52 lost 27 aircraft or 5% of its total fleet.  The B1 was just three percent!

As costs have increased over time, the useful life of an aircraft becomes even more vital when measuring its added-value.  For example, the supersonic B58 Hustler which had a brief operational career (1960-70) experienced a loss of 26 aircraft or 22.4% of production.  A total of 116 B-58s were produced: 30 trial aircraft and 86 production B-58A models.  Its cost/value relationship was significantly further diminished when the USSR developed highly effective surface-to-air missiles (SAMs) thus nullifying the B58’s high-altitude capability and forcing it into a low-level  penetration role for which it was never intended and thereby limiting both its range and strategic value.  It had been designed for nuclear strikes and was never employed for conventional bombing.  The B58 was so highly specialized that it was not a fungible asset that could be economically or efficiently transitioned into a different role.  [Readers may recall seeing footage of the B58 as the fictional Vindicator Bomber in the 1964 film “Fail Safe” and again in the 2000 made-for-TV remake of that same film.]  As such, even in the context of the Cold War, the B58 became less effective because it lacked versatility, flexibility and firepower necessary for a strategic bomber to maximize its purpose.

By the 1970s, it became apparent that while the B52’s versatility would enable it to remain a valuable asset, it was highly vulnerable to new threats posed by enemies of the USA.  In order to fulfill its military objectives, the B52 and its crews were now at far greater risk when engaged in combat.  This became painfully evident in December 1972 during the Vietnam Conflict when ten (10) B52s were shot down inside North Vietnam during round-the-clock bombing raids; the SAMs developed by the USSR and used by North Vietnam led to the loss of 28 crewmembers killed in action and 33 prisoners of war in the downing of those ten (10) bombers.  Sixteen (16) other B52s went down outside of North Vietnam.  Nine were due to combat.  Seven were “operational losses” which occurred while B52s were en-route to combat areas in Vietnam.

With the grounding of the B58s in 1970 and the vulnerability of the B52s on public display in 1972, the need for a high-performance but versatile strategic bomber was self-evident.  This, along with other prior developments to be discussed in this paper, helped provide the raison d’être for the B1 bomber.

VICTORY: The True Measure of Return on Investment for Military Assets

In the post World War II period, the USA was engaged in a 40+ year “Cold War” with the former USSR and in recent years has deployed military assets in various global theaters in the “War on Terror.”  In both conflicts, the B1 Bomber helped achieve victory in the “Cold War” while meeting or exceeding mission requirements in the “War on Terror.”  As both of these conflicts can be viewed as a battle for survival between the forces of liberty and freedom versus totalitarianism, the metric for measuring Return on Investment cannot be confined to mere accounting or finance based data.  In war victory is the true measure of success for victory means survival.  As Winston Churchill said:  “Victory at all costs, victory in spite of all terror, victory however long and hard the road may be; for without victory there is no survival.”  When factoring the immeasurable value of liberty and freedom, victory supersedes both accounting and finance data in assessing added-value from military assets.  On this basis, the B1 Bomber has been a significant contributor in achieving victory, and thereby has produced a satisfactory, if not superior, Return on Investment.

In business, accounting is based on historic cost data while finance is based on market-value based information.  Moreover, finance takes into account the opportunity cost (i.e., the highest valued alternative forsaken to pursue a given project) as well as the time value of money.  Both of these metrics, however, fall short of truly measuring the Return on Investment (ROI) for a military aircraft program.  Such weapons are designed, developed and deployed with the express purpose of achieving victory in the field of battle.  This does not necessarily mean that to assess its ROI a strategic bomber like the B1 requires actual use in a “shooting war” BUT its presence as a potential threat can have an enormous deterrent effect on the enemy because of the knowledge that it will succeed in its mission if actually deployed.  While this paper will demonstrate that in accounting and finance terms, the B1 achieved positive returns in the context of its mission, the true metric, victory, is the one emphasized here for reasons already noted.  Thus, we will now further examine the characteristics of this remarkable aircraft that has made the B1 a high ROI military asset.  The ROI is best appreciated when examined from both economic and strategic perspectives.

  • Economic ViewpointThe total economic return for the B1 is both quantitative and qualitative.  The quantitative benefits include a long service life, higher survivability rate and wider utilization of air bases.  Qualitative benefits include spin-off applications for other aircraft programs plus various industries.  In nominal US dollars, the unit cost for the B1 was $200 million per aircraft [based on $20 billion for design, development and manufacturing] or $283 million in constant 1998 US dollars.  The aircraft’s useful life is estimated to be at least to the year 2040 and beyond, which imply 55 or more years!  Compared to the older B52, the B1 has higher survivability, speed, firepower and can be deployed amongst a greater number of air bases because it requires less runway space.  As shown in a later section of this paper, the B1 was a significant contributor to help the USA win the Cold War and in the War on Terror has achieved a mission capable rate of 79%.  The B1 has a much higher survivability rate versus the B52 due to its stealth features such as blended contours and radar absorbing materials that reduced its radar reflectivity to one one-hundredth that of the B52.  Higher survivability reduces risk for the crew and lengthens the useful life of the aircraft.  As noted in the Aviation Video International documentary film series Great Planes, given the B1’s operating record, it has proven to be “not so expensive after all.”  In addition, production and deployment of the B1 was a major driver in reviving the US aerospace industry with major advances in computers, software, composite materials and precision guided munitions.  Much like the Apollo manned spacecraft program of the 1960s, there were enormous spin-off benefits for civil, commercial and personal applications in telecommunications, medical technology, engineering, science and other such related areas.  One example is how the advancement in computers accelerated concurrent with the production and deployment of the B1.  Computer technology was an integral part of America’s 25-year economic boom (1983-2007) because of the enormous productivity that cascaded throughout the economy from increased computer applications.  Another example is how B1-related design and development work has been a process driver for other major military and commercial aircraft programs.  CFM International (January 25, 2010) observed that the B1A engine was upgraded with greater durability and efficiency so that it was used in the B1B, and then later the basis for variants in the F14 Tomcat, F16 Falcon, B2 Spirit and various small-to-medium sized commercial airliners such as the long-range Boeing 737.  All of these economic benefits plus protection against enemies who have vowed to conquer us is a high ROI indeed!
  • Strategic ViewpointThe B1 Bomber’s strategic value has increased over time because it has a proven performance record as an effective deterrent in all three (3) major defense strategies employed by the USA over the past 50+ years.  Moreover, the B1 airframe has been adaptable to new technologies that could be incorporated into its design along with effective countermeasures that enable the aircraft to operate in different venues while fulfilling new mission requirements.  As noted earlier, the B58 Hustler had a relatively short service life because it lacked versatility to be useful with shifting strategies.  During the 1950s and up to the mid-to-late 1970s, American strategic forces were deployed in the context of what was termed the “Mutually Assured Destruction” (MAD) doctrine.  The premise is that full scale use of nuclear weapons by two opposing sides result in the mutual destruction of both the attacker and defender.  This assumes that both sides are able to launch a sufficient counterattack in war.  For manned bombers, however, this requires that an attack group plus its air-refueling tankers are able to get airborne 10 minutes or less after the enemy has launched its missiles.  Due to this narrow window of time, a number of bombers were kept airborne at all times (“24/7”) to reduce putting the entire fleet at risk by being on-ground.  However ORI (Operational Readiness Inspections) consistently demonstrated that USAF bombers were able to meet or beat the 10-minute launch threshold during the Cold War.   By the mid-to-late 1970s, the USSR had achieved a quantitative advantage in launchers and weapons platforms over the USA and simultaneously was expanding its reach as evidenced by its invasion of Afghanistan in 1979.  Such developments required a shift in strategy to “flexible response” in which military assets had to be rapidly deployed in various global regions, often simultaneously, to project US power as a deterrent against further incursion.  Unlike the MAD doctrine which dealt with stationary targets, this implies that targeting of military and civilian centers were no longer fixed but now had to be adjusted in real time to accommodate the shift in world events and flow of enemy military assets.  With the defeat of the USSR and end of the Cold War in 1991, the emphasis in strategy shifted again, but this time to precision targeting.  The improved technology, shifting political climate and reductions in strategic forces necessitated a far more efficient, flexible and precision striking capability – especially with long-range bombers.  Precision striking capability colloquially means “more firepower for the money” with less or minimal collateral damage to non-target areas versus gravity bombs.

THE VICTORY FORMULA: Firepower + Versatility + Economy

Superior Firepower [as measured by payload]

Firepower, which measures the capability of a military asset, is best quantified when using a consistent or common metric for comparative analysis applicable to multiple bomber aircraft.  In this case, we use the precision JDAM (Joint Direct Attack Munitions) or “smart bombs” as the way to measure capability of directing force at an enemy through strategic bomber deployment.  Essentially, the precision JDAM is a guidance system “bolted” or “strapped” on to a gravity bomb thereby converting it into a precision guided weapon.  As a practical matter, the rules of engagement evolve over time to reflect not only improved technology but political considerations that include, but are not limited to, “collateral” damage to non-combatants.  For this type of environment, “smart” or “precision guided” weapons become the more common metric when evaluating firepower as the aforementioned collateral damage cannot always be treated as “tactical necessities.”  While each bomber aircraft has unique storage and delivery features along with varied mix of offensive weapons, the JDAM or “smart bomb” is an up-to-date asset that replaces “gravity bombs” used in prior combat situations, and since it can be incorporated into each aircraft, this is the asset used for measuring firepower for each bomber aircraft.  In the Bomber Payload exhibit located in the Appendix, it is self-evident that the B1 outguns the B52 and B2 (the other major USAF bombers) on per aircraft and fleet basis.  Here is a statistical comparison on a JDAM basis.

Aircraft Type Internal JDAMs External JDAMS Total JDAMS(ac/fleet)
B1 (# in fleet: 65) 24 12 [if permitted by START] 36 / 2,340
B52 (# in fleet: 76) 12 6 18 / 1,368
B2  (# in fleet: 20) 16 NA 16 / 320

Explanatory Notes: (1) a/c: aircraft; (2) Total firepower = (# of a/c) x (JDAMS per a/c); (3) Fleet size are combat aircraft (test aircraft are not included in respective fleet firepower metrics).

Even without the external JDAMs, the B1 outguns the B52 and B2, respectively, by +100% and +50%.  This is the most relevant comparison as the B2 was not designed for external payload while the B1’s external capability is limited by treaty.  As a practical matter, each aircraft type has specific characteristics and mission capabilities that make each a valuable asset in the context of an overall military strategy.  This simple comparison demonstrates that on a JDAM payload basis, the B1 is the best performing bomber aircraft in the US arsenal.

Firepower, in and of itself, is not necessarily the sole measure of superiority.  The ability to project and deliver that firepower is crucial to its ultimate purpose in achieving victory.  In the ensuing sections, it will be shown that the B1’s multiple capabilities on a combat readiness basis at a moment’s notice, including a blend of flexibility and strength, affirm its superior firepower.

Versatility = Stellar Performance

The B1 is a multi-mission aircraft carrying the largest payload of both guided and unguided weapons in the USAF inventory.  As such it can rapidly deliver those weapons in massive quantities against any adversary, anywhere in the world, at any time.

The B1’s versatility is best described by Air Combat Command in its Fact Sheet:

“The B-1B’s blended wing/body configuration, variable-geometry wings and turbofan afterburning engines, combine to provide long range, maneuverability and high speed while enhancing survivability. Forward wing settings are used for takeoff, landings, air refueling and in some high-altitude weapons employment scenarios. Aft wing sweep settings – the main combat configuration — are typically used during high subsonic and supersonic flight, enhancing the B-1B’s maneuverability in the low- and high-altitude regimes. The B-1B’s speed and superior handling characteristics allow it to seamlessly integrate in mixed force packages. These capabilities, when combined with its substantial payload, excellent radar targeting system, long loiter time and survivability, make the B-1B a key element of any joint/composite strike force. The B-1 weapon system is capable of creating a multitude of far-reaching effects across the battlefield.”

Unlike other high-performance but less adaptable bomber aircraft such as the B58 Hustler, this versatility has enabled the B1 Lancer to remain a relevant, front-line weapon in the context of three major strategies: massive retaliation, flexible response and now, precision targeting.  During the showdown stage of the Cold War in the 1980s, the shift in strategy from massive retaliation to flexible response began as military targets were no longer stationary and the risk of potential conflict became more spread out geographically with changes in the global political-economy.  By 1987, when the B1 entered into the service of the Strategic Air Command (SAC), whose motto was “Peace is our Profession,” the shift was underway.  At this point, the B1 was initially outfitted with nuclear weapons.  SAC was deactivated at the end of the Cold War and the ensuing reorganization of military aircraft assets into the Air Combat Command marked another shift in strategy, this time to precision targeting.

With the end of the Cold War, political tensions became more regionalized (albeit on a global basis) and threats of war were on a more limited scale in which the danger of massive worldwide nuclear destruction was no longer the concern it had once been.  In this setting, while the adversary was no longer a monolithic entity like the USSR, danger still lurked but in the form of terrorism.  With advanced technology and heightened political sensitivity about quelling military threats but with minimal or no collateral damage to civilians or non-combatants, precision targeting with conventional weapons became the norm.  With the B1 shifting to greater conventional weapon capability, its versatility became more apparent as several bomb wings could now be deployed into the Air National Guard along with the development of the USAF Weapons School B1 Division.  In sum, the B1 has delivered stellar performance while operating under different strategies to protect and defend the liberty and freedom of our citizens anywhere in the world.

Economy: Efficiently Fulfilling the Mission

As noted earlier, economy (i.e., getting the most or highest total return in terms of quantitative and qualitative benefits from a capital outlay) for a military aircraft can be measured in terms of firepower, service life, versatility and its overall contribution to helping achieve victory in war.  On all of these measures, it has been shown in this paper that the B1 Lancer has met or exceeded expectations.  Another measure of economy is efficiently fulfilling its combat mission in the midst of an actual firefight (i.e., where bombs are dropping, missiles are being fired and air-to-air combat is a constant risk) and in this regard, it will be shown here that the B1 also excels.  In the ensuing section, the B1’s contribution to winning the Cold War is discussed in the context of the overall strategy that led to that outcome.  In this section, we will provide examples of the B1’s economy in combat situations.

According to Air Combat Command, the B1 was first used in combat in Operation Desert Fox (1998) where aircraft penetrated Iraqi defenses to destroy Republican Guard barracks.  The following year in Operation Allied Force, six B1 aircraft accounted for 2% of air sorties but delivered more than 20% of total tonnage in this conflict!  In Operation Enduring Freedom the B1s accounted for 5% of the strike sorties against Afghanistan while delivering over 70% of the precision guided JDAMs.  In Operation Iraqi Freedom the B1s represented just 1% of the combat sorties but 22% of the guided weapons!   All of this was accomplished with a 79% mission success rate and with zero losses of aircraft and crew.  The B1 was dubbed the “MVP” – Most Valuable Plane – for its versatility and success rate in Operation Iraqi Freedom.  In 2012, a squadron of nine B1s flew 770 sorties in Afghanistan during a six-month period – the most ever for B1s on a single deployment.  This squadron spent 9,500 hours airborne while having at least one aircraft in the air at all times, accounting for 25% of combat aircraft sorties over the country while there and averaging 2 to 3 requests for air support per day.  All of these examples and the accompanying metrics affirm the economy of the B1 – i.e., efficiently fulfilling its mission! 

Caveat: Playing to Win

While the capabilities of military assets such as the B1 are critical to the success of the mission and achieving victory, there is an equally important factor: the will to win.  The B1 Bomber is designed to achieve optimal results when under the command of leadership that plays to win rather than a play-not-to-lose / avoid being second-guessed approach.  To place a sophisticated military asset such as the B1 in a sub-optimal, play-not-to-lose performance role puts both the aircraft and crew at grave risk.  This is analogous to high-level (e.g., Olympic class) sporting events where if a top athlete in peak condition does not play all-out, he or she risks having their body injured or compromised.

The B1 provides an optimal mix of process and technology to project-and-deliver maximum firepower anywhere and anytime, while possessing stealth-like flexibility to approach, evaluate, readjust if necessary and then strike with lethal precision.  Moreover it has a proven performance record of doing so with the high likelihood of safely returning to home base, preserving both the equipment and crew for its next deployment.  The B1, along with other high-powered bomber and strike aircraft, are not toys or playthings to be deployed as if one is playing an interactive video game.

The B1’s deployment by the Reagan Administration in the early-to-mid 1980s was a key element to implementing an “offensive” rather than “defensive” strategy.  In this showdown stage of the Cold War, flexible response had replaced massive retaliation in terms of strategic emphasis, but this was in the context of demonstrating a will to win and apply massive retaliation if necessary.  The B1 had restored penetration capability for the USAF strategic bomber force — [whose diminishment with the B52 in the early 1970s during the Vietnam Conflict was now fully evident] — plus its stealth characteristics enabled it to loiter, search and destroy.  This proved to be crucial for the USA in regaining the initiative and upper hand because the B1 would be able to locate mobile targets such as missile launchers and destroy them if necessary.  Prior to the B1 deployment, US long-range bombers by the mid-to-late 1970s, namely the B52, had very limited penetration capability in relation to USSR air defenses (interceptor aircraft and missiles) and thus relegated to a stand-off position in which it could launch cruise missiles.  De facto, this essentially meant US manned bombers were in an all-or-nothing role with limited reconnaissance capability because for the B52 to enter enemy airspace to verify targets would put the aircraft and its crew in a very low survivability situation.  Launching missiles from a safe stand-off position severely limited the flexibility of a manned bomber force.  Once launched, the missiles could not be recalled, and there was no way to determine if in fact the targets had been moved prior to attack, which could be accomplished by an aircraft with stealth and penetration characteristics.  With the USSR having shifted from stationary to movable launchers, the B1’s flexibility, penetration and stealth capabilities proved invaluable in neutralizing this threat.  In other words, re-locatable targets (e.g., mobile missile launchers) need to be found before they can be destroyed.  The B1’s versatility and firepower to accomplish this task enabled US air power to reassert its superiority in strategic forces.

The B1 was a game changer because it demonstrated that the USA was no longer standing pat but upgrading its long-range bomber force to not only be more effective with both “massive retaliation” and “flexible response” strategies, but also be adaptable to future strategies incorporating new technologies and different rules of engagement (influenced by political / diplomatic considerations).  In the context of game theory, this now forced the opposition to rethink its strategic posture and capabilities, as well as make its own upgrades or changes to its armed forces, thereby necessitating increase in their own public defense expenditures.  The private enterprise driven US economy, noted for innovation, entrepreneurship, capital formation and wealth creation, was better able to support development and deployment of military assets such as the B1 as its aforementioned economic spin-off benefits facilitated even greater economic expansion.  By comparison, a centralized state ownership economy like the USSR could not keep up.  With the USA now operating in a “we win, they lose” mode, the upgraded American strategic forces supported by a revitalized, growing economy check-mated their Cold War Soviet rivals, achieving victory in 1991.

The B1 fleet is operated by Air Combat Command (ACC) whose motto is “Global Power for America.”  The ACC maintains command-ready forces able to respond to challenges in a constantly changing world in order to protect our nation’s security.  With the end of the Cold War in the early 1990s, the B1’s role was shifted to delivery of conventional rather than nuclear weapons due to its greater firepower (as measured by payload), flexibility (allowing it to seamlessly integrate with mixed forces), and its unique combination of long-range, maneuverability, and high speed while enhancing survivability.  Moreover, the shift from nuclear to conventional armament, allowed for B1 aircraft to be deployed in the oft more efficient and economical Air National Guard, state-based Air Force militias in the USA.  [The role of militia organizations are described in the US Constitution – Article 1, Section 8, Clauses 15-16 and Amendment 2].  According to the Boeing Company [which now owns Rockwell, the original maker of the B1 Lancer] public documents: “The U.S. Air Force decided to retire 33 B-1Bs and remove the aircraft from Mountain Home and the Georgia and Kansas Air National Guard bases. This has now been accomplished and the remaining aircraft were consolidated at Dyess AFB and Ellsworth AFB.”  However the ability to redeploy the B1 implies capacity and flexibility to fulfill its mission in a more economical manner as well as adapt to changes in the political economy.

VIGILANCE: The Back-story

Beyond victory in combat, the B1 profile would be incomplete without the back-story on how it survived formidable political opposition to later become one of the most important assets in the US military arsenal.  In order to fully appreciate how this came to be, it is necessary to review two (2) major aircraft programs – the Northrop YB49 Flying Wing and North American XB70 Valkyrie – whose individual histories had a material impact on the B1 Lancer.  Furthermore, there are a number of key people that deserve mention who were instrumental in sustaining research, development and testing for the B1 program in the aftermath of its 1977 cancellation.  Here is a summary of what happened and the resulting impact on the B1 Lancer.

How the Flying Wing and Valkyrie Provided the Segue for the B1 Lancer

Part 1: The Northrop YB49 Flying Wing

The Northrop YB49 Flying Wing was a jet-powered strategic bomber that first flew in 1947 and was designed for service in the USAF.  [Classic sci-fi movie fans might recall seeing actual test-flight footage of the YB49 in the 1953 film “The War of the Worlds” dropping an atomic bomb against the invading Martians.]  This futuristic aircraft provided the template for the Northrop B2 Spirit stealth bomber that entered service in the early 1990s.  But in the late 1940s and early 1950s, high-altitude and high speed were the preferred characteristics for a strategic bomber, and the Flying Wing was designed for low-altitude flying for penetration into enemy territory and had a maximum speed of 495 miles per hour.  In retrospect, the Flying Wing was well ahead of its time, reflecting the ingenuity and entrepreneurship of Northrop’s technology trailblazing founder and leader, Jack Northrop.  The Flying Wing had control and stabilization difficulties that decades later would be solved by “fly by wire” and “computer generated artificial stability” technologies, culminating with development and deployment of the aforementioned the B2 Spirit.

While these technological issues were significant and reasonable for passing over the Flying Wing in favor of the more conventional propeller driven Convair B36 Peacekeeper, there were back-room dealings and political gamesmanship involved with this decision.  These political maneuverings and their outcome would later play an important role in the B1 Lancer story.  In a 1979 videotaped news interview, Jack Northrop publicly stated that Northrop’s YB49 Flying Wing program was cancelled in 1950 by USAF Secretary Stuart Symington because Northrop refused to comply with Mr. Symington’s recommendation that Northrop merge with competitor Convair.  According to Mr. Northrop, Convair’s financial terms for the merger were not equitable.  Concurrently, Convair had very strong lobbyists in Washington, DC, while Northrop’s independent nature often conflicted with the political deal-making endemic to the nation’s capital.

As a result, despite its obsolete World War II-era design, the Convair B36 Peacekeeper prevailed in securing a mass-production order for USAF deployment during the Truman Administration.  Shortly thereafter, following his resignation as USAF Secretary, Mr. Symington was named President of Convair!  The reader is left to his or her own judgment regarding conflict of interest and the role of political wheeling and dealing in this matter, but there is still more to this story.  While still holding his post as USAF Secretary, Mr. Symington ordered all the Flying Wing air frames destroyed [they were chopped up and shredded onsite in plain sight of Northrop employees] AND he refused the Smithsonian’s request that the USAF donate one of those aircraft to the museum for its collection of Northrop’s pioneering aircraft.  For this reason there is no full-scale version of Northrop’s original all-wing aircraft for study and research.  It is self-evident that this was, and is, a loss for aviation history as well as for scientific research and development.  While Northrop retained the original YB49 flight test data, an important asset was forever lost as political deal making prevailed over the preservation of advanced aviation design for all generations.  Northrop was awarded a very small, low profile production contract for its F89 Scorpion fighter as compensation for cancellation of the Flying Wing.  But the opportunity cost associated with the willful and intentional destruction of the Flying Wing by vindictive political opponents was recognized as a setback for aviation and scientific progress.  Consequently, such actions were not repeated with later generations of strategic bombers, and this would ultimately help provide the necessary window of opportunity for the B1 to continue its research and flight test work following its initial cancellation.  [During those continuing research and flight tests, the B1 was reconfigured and upgraded from its initial B1A model to the B1B, enabling it to be transformed into a most versatile, formidable aircraft.]

Part 2: The North American XB70 Valkyrie

During the 1950s, the Boeing B52 Stratofortress succeeded the Convair B36 Peacekeeper as the primary USAF long-range bomber.  The rationale for manned bombers even as Intercontinental Ballistic Missiles (ICBMs) started to account for a larger percentage of total US strategic weapons was the ability to remain in the air at a long distance from their bases (thereby reducing their vulnerability to sneak attack).  High altitude and high speed continued to be emphasized to provide greater flexibility and elusiveness in combat.  The North American XB70 Valkyrie, designed for high altitude (77,000+ feet) and high speed (2000+ miles per hour), was thought to be a logical successor to the B52.  While lacking the range and payload of the B52, the Valkyrie’s high performance was viewed as a reason for its deployment.  However, during the late 1950s and early 1960s, USSR surface-to-air missiles and interceptor aircraft reached a stage of development where they could neutralize high-altitude / high speed long-range bombers.  On this basis, the value of the XB70 was severely limited as a mass-produced, front-line combat aircraft and by the end of the Eisenhower Administration had fallen out of favor.

In 1961, the Kennedy Administration cancelled mass production of the XB70 deeming it as unnecessary, uneconomical and lacking penetration capability into strengthened enemy air defenses.  However, unlike the Flying Wing cancellation of 1950, it was recommended that the XB70 Valkyrie be continued for advanced research into aerodynamics, propulsion and other subjects related to large supersonic transports.  Thus the Valkyrie could serve as a process driver for both advanced military and civilian jet aircraft.  In other words, a positive economic return would be accrued in a research rather than combat role.  The needless destruction of an asset having both scientific and military worth was avoided, thereby setting a precedent for future military aircraft projects.  This proved to be a saving grace for the B1 when it was initially cancelled in 1977 by not only providing a rationale for continuing research and test flights but also building an informational foundation transferrable to later generation of bomber aircraft.  Eventually, two XB70 aircraft were developed for multiple test flights with the data and material from these tests later being used for the later B1 program!  One of the XB70 aircraft crashed in 1966, with the second retired in 1969 so that it would be on permanent display in a museum.  Unlike the Flying Wing, the Valkyrie was allowed to continue, albeit in a research rather than combat role.  As such the XB70 helped advance aerodynamics and propulsion technology.  Moreover, when it fulfilled its research mission, the Valkyrie was made available for future generations to study as a static museum display.

Part 3: Lessons Learned From the Flying Wing and Valkyrie

There are two major lessons to be taken from these high-tech aircraft programs.  First, continued research and flight tests rather than abrupt cessation of an advanced jet aircraft program expands the frontier of knowledge so that it creates far-ranging applications in commercial and military venues.  This also gives flexibility to restart a program when new advancements create a significant competitive advantage in a combat role.  Essentially, this is what occurred with the B1 as its “B1B” version ultimately proved to be vastly improved over its “B1A” version because of improved firepower, survivability, economy, flexibility and versatility.  This was made possible by the advancements during 1977-80 that led to its restart in 1981.  The second lesson is that decisions concerning strategic military aircraft must be viewed not merely in financial or political terms, but how the possibility of eventual deployment can affect the enemy and give our nation flexibility and strength.  Abrupt cancellation of an advanced military aircraft can be misinterpreted by the enemy as a signal of retreat.  Indeed, it is more advantageous to always leave open the possibility of its deployment with the view that ongoing research and testing will further upgrade its combat capability.  Even if that aircraft is not deployed in its original version, its presence allows for our nation to maintain initiative and be in a decisive, offensive posture rather than a passive, defensive stance.  This allows our nation to preserve peace in which liberty and freedom prevail, rather than the peace of surrender.

Part 4: Vision and Courage in the Congressional, Military and Corporate Venues

The rationale for restarting the B1 in 1981 and how it proved to be a game changer in winning the Cold War has already been addressed earlier in this paper.  To place this in context, it is worth examining the preceding events.  The Carter Administration cancelled production of the B1A program in 1977 in favor of land and submarine based ICBMs, air launched cruise missiles, upgraded B52 bombers and funding an advanced technology bomber (i.e., stealth).  This decision was rooted in the aforementioned MAD (mutually assured destruction) doctrine of the 1950s and 1960s.  Viewing the world through such a prism meant that halting deployment of the B1A could be more economically replaced with air launched cruise missiles from a B52 at a standoff position and that stealth capability would be required to penetrate enemy air defenses.  The problem with this strategy was that it ignored the inherently long lead times required for design, development and procurement for a new jet aircraft PLUS was invalidated by a shift in USSR strategy in which the enemy was asserting itself worldwide in multiple theaters simultaneously.  This necessitated a shift in USA military strategy from massive retaliation to flexible response.  However, while the B52 fleet could support on-demand global missions, its long runway requirements severely limited forward basing alternatives thereby negating projection of American air power.  With these events in full swing during the post 1977 era and the precedents set by the YB49 Flying Wing and XB70 Valkyrie programs, the Carter Administration permitted continuation of research and flight tests for four B1A prototypes.  The reader may infer that this was a hedge against the earlier cancellation decision, especially given potential domestic political backlash and the increased threat posed by Soviet adventurism.

In this environment, Rockwell (formerly North American) – the primary B1 contractor — committed some of its own corporate funds for research and development with the implicit if not tacit encouragement of key USAF decision makers PLUS the Congressional budgetary support led by US Representative Robert K. Dornan (CA).  In addition, US Senator Barry M. Goldwater (AZ) was a stalwart supporter of US military preparedness, especially air power, while advocating superiority rather than parity of American armed forces vis-à-vis its USSR counterparts.  Messrs. Dornan and Goldwater were also experienced military pilots who had flown the B1 as well as all other major US military jet aircraft.  They understood the necessity of decisive force and projection of strength as a means of securing peace while protecting the freedom and liberty of our nation.  Since the House of Representatives has budgetary authority, Mr. Dornan’s ongoing support, as well as his ability to secure backing from US Representative Norman Dicks (WA) allowed for sufficient DOD funding to augment Rockwell’s corporate funds keeping the B1 program quietly active.

By 1981, when the Reagan Administration took office, the B1A had been totally transformed into the B1B, an entirely different aircraft versus its earlier version.  While lacking the speed of the B1A, the B1B proved to be a superior aircraft because it now featured stealth characteristics plus low terrain flying that meant greater survivability, penetration capability, increased versatility (including deployment onto shorter runways) and much longer service life because it could be integrated into a wider array of missions and strategies versus the B52 and predecessor strategic bombers.  In addition, the flight tests and research allowed for USAF, Congressional and corporate decision makers to eventually spread out the production of the B1 into virtually every single state.  Thus every state in the union was a stakeholder both financially and strategically in this ultimately game-changing military aircraft program.  The vision and courage of key decision makers in the ranks of the USAF, Congress and the corporate world (namely Rockwell) made it possible for the B1 to take flight as an important weapon in our nation’s arsenal of freedom.  The lessons of the past, namely the Flying Wing and Valkyrie, were successfully incorporated into not only maintaining the B1 on life support but upgrading it for future generations. 

CLOSING THOUGHTS

The B1 Lancer is an affirmation of peace and freedom through the display of American courage and exceptionalism.  This aircraft was the by-product of ingenuity, entrepreneurship, risk-taking and vigilance.  When produced and deployed on a massive scale, it not only helped secure victory in the Cold War but remains a versatile, front-line weapon in the War on Terror.  Its design and development was a major driver in reviving the US aerospace industry with major advances in computers, software, composite materials and precision guided munitions.  Moreover, the B1 has been adaptable for the various strategies employed for US national security – massive retaliation, flexible response and precision targeting – during the past 50+ years.  Having first been deployed in 1985, it has a projected service life reaching at least until 2040, if not beyond.  Carrying the largest payload of both guided and unguided weapons in the USAF inventory, Air Combat Command has stated on record ”the multi-mission B1 remains the backbone of America’s long-range bomber force.”  Based on its versatility, firepower, economy and efficiency the B1 Lancer has achieved a superior ROI in quantitative and qualitative terms.

PHOTO GALLERY: Online readers may wish to check out this exhibit of USAF B1 photographs posted by Mike Neely.  Here is the link: http://www.theaviationzone.com/images/html/other/various/bombers.asp

ACKNOWLEDGEMENTS

My sincere thanks to all the men and women associated with the B1 Lancer – especially those members of the US armed forces whose dedication, sacrifice and service make it possible for all of us to enjoy the blessings of liberty and freedom.  Special thanks to the Honorable Robert K. Dornan for his generosity of spirit, strength of character and seriousness of purpose in connection with his service to our nation.  I am especially grateful for his support of this paper and salute his patriotism.

About the Author:

George A. Haloulakos is a Chartered Financial Analyst [CFA] and consultant: DBA Spartan Research and Consulting, specializing in finance, strategy and new business ventures (1995-to date).  Author of DOLLAR$ AND SENSE: A Workbook on the ABCs of Investments and Directed Studies in Advanced Financial Analysis, George has published over 300 security analyst reports on diversified companies and industries.  George holds an MBA in Finance and BS (Summa Cum Laude) in Quantitative Business Analysis from the Marshall School of Business, University of Southern California, where he was a graduate assistant in finance & business economics.  He holds Certificates of Completion from the Holy Cross Greek Orthodox School of Theology and Monterey Institute of International Studies, and is a member of the ordained clergy of the Orthodox Church in America with rank/title of Reverend Protodeacon.

REFERENCE LIST

Air Combat Command (ACC) public documents.

Air Force Historical Research Agency, United States Air Force, Maxwell Air Force Base, Alabama.

Air Force Magazine (online). “A Tale of Two Bombers,” by Walter Boyne.  Volume 89, Number 7.  July 2006.

Aviation Video International (Australia). “Great Planes – Rockwell B1 Lancer.”

Aviationzone.com

Boeing Company public documents.  (Note: Boeing now owns Rockwell.)

Constitution of the United States of America.

Dornan, Robert K.  Former US Representative (California).  1977-1983, 27th Congressional District; 1985-1993, 38th Congressional District; 1993-1997, 46th Congressional District.  Telephone interviews December 24, 2013 and January 20, 2014.

Evergreen Aviation Museum (The Captain Michael King Smith Educational Institute).  McMinnville, Oregon, USA.

FORBES (online). “Some Disturbing Facts About America’s Dwindling Bomber Force,” by Loren Thompson.  August 16, 2013.

Flying Leatherneck Historical Foundation & Aviation Museum.  Marine Corps Air Station (MCAS) Miramar.  San Diego, California, USA.

Global Security.org

Goodpaster, Brig. General Andrew J., White House Office Records of Andrew J. Goodpaster 1952-61.  Dwight D. Eisenhower Presidential Library.

Green, William (compiler) and Punnett, Dennis (silhouette artist). The Observer’s Book of Aircraft.  Frederick Warne & Co. (London and New York). 1965.

Haloulakos, G.A. CFA Charterholder. (BS, MBA. Marshall School of Business, University of Southern California).  “Lockheed C130 Hercules: Versatility + Strong Cash Flow = Competitive Advantage.”  2014.  BusinessThinker.org and Experimental Aircraft Association

Haloulakos, G.A. CFA Charterholder. (BS, MBA. Marshall School of Business, University of Southern California).  “Lockheed Tri-Star Redux: A Play to Win Strategy.”  2013.  BusinessThinker.org

Haloulakos, G.A. CFA Charterholder. (BS, MBA. Marshall School of Business, University of Southern California) and Mossavar-Rahmani, Farhang.  Finance Chair – National University.  (DBA.  United States International University).  “The Boeing Company: A Case Study on Betting it All.”  2013.  Airliners.net and BusinessThinker.org

Haloulakos, George A., (DBA Spartan Research and Consulting), Case Study Files and Field Notes on Corporate Strategy, Military/Aerospace Industry, High-Tech and Commercial Jet Aircraft – Spartan Research, 1980 – 2014.

Haloulakos, George A. (CFA Charterholder).  Dollar$ and Sense: A Workbook on the ABCs of Investments.  Page 11.  Spartan Research and Consulting, Inc. (Bellevue, WA).  2002.  ISBN: 9780-1007-2482-2.  UCSD Bookstore.

Haloulakos, George A. (Graduate Assistant – Marshall School of Business, University of Southern California). “Reformulating Corporate Financial Theory for the 21st Century.”  Research support for M.C. Findlay, III (Finance Chair – Marshall School of Business, University of Southern California).  August, 1981.

Haloulakos, V.E.  Aerospace Engineer, Scientist and Professor.  (BSME, MSAE and ENGR.D.  Viterbi School of Engineering, University of Southern California).

Nampows.org. “B52 Combat Losses in Vietnam.”

1961 Budget Message.  Kennedy Archives, March 28, 1961.  Pages 1-38.

Patriot Files.com

Scott, Kelly.  CISA (Certified Information Systems Auditor), EA (Enrolled Agent), instrument rated private pilot, aviation enthusiast. (BS, MBA.  Haas School of Business, University of California at Berkeley).

Sweetman, Bill. Stealth Aircraft: Secrets of Future Airpower.  Motorbooks International.  1986

Taynai, Jason.  Crew Chief – B1 Bomber, Flight Line Launch and Recovery Support, Dyess Air Force Base, Abilene, TX (1986-89).

RESEARCH SUPPORT

Scott, Kelly.  Industry/Historic/Technical Research.  CISA (Certified Information Systems Auditor), EA (Enrolled Agent), instrument rated private pilot, aviation enthusiast. (BS, MBA.  Haas School of Business, University of California at Berkeley).   Mr. Scott worked for NASA Human Factors Laboratory at NASA Ames Research Center testing pilot heads up displays (HUD) simulation of ground taxi in poor visibility. 

APPENDIX

Precision Joint Direct Attack Munitions (JDAM): Bomber Payload

NOTE: Each Precision JDAM represented by “^”

B1 Lancer [Maximum Firepower: 36/aircraft] x 65 aircraft = 2,340 Precision JDAMs

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[Standard JDAMs: 24 internal] x 65 aircraft = 1,560 Precision JDAMs

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[External JDAMs if allowed by START: 12] x 65 aircraft = 780 Precision JDAMs

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B52 Stratofortress [Firepower: 18/aircraft] x 76 aircraft = 1,368 Precision JDAMs

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[Standard JDAMs: 12 internal] x 76 = 912 Precision JDAMs

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[External JDAMS: 6] x 76 aircraft = 456 Precision JDAMs

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B2 Spirit [Firepower: 16/aircraft] x 20 aircraft = 320 Precision JDAMs

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Sources: Boeing; Northrop-Grumman; patriotfiles.com; Spartan field-research notes.

GENERAL CHARACTERISTICS OF THE B1 BOMBER

Primary Function: Long-range, multi-role, heavy bomber
Builder: North American Rockwell/Rockwell International (now owned by Boeing)
Operations Air Frame and Integration: Offensive avionics, Boeing Military Airplane; defensive avionics, EDO Corporation
Power plant: Four General Electric F-101-GE-102 turbofan engine with afterburner
Thrust: 30,000-plus pounds with afterburner, per engine
Length: 146 feet (44.5 meters)
Wingspan: 137 feet (41.8 meters) extended forward, 79 feet (24.1 meters) swept aft
Height: 34 feet (10.4 meters)
Weight: Empty, approximately 190,000 pounds (86,183 kilograms)
Maximum Takeoff Weight: 477,000 pounds (216,634 kilograms)
Speed: 900-plus mph (Mach 1.2 at sea level); maximum speed (Mach 1.25 or about 950 miles per hour at 50,000 feet altitude); low-level speed (Mach 0.92 or 700 miles per hour at 200 to 500 feet altitude)
Range: Intercontinental, unrefueled / 7,500 miles
Ceiling: More than 30,000 feet (9,144 meters); service ceiling 60,000 feet
Crew: Four (aircraft commander, copilot, and two weapon systems officers)
Armament: 24 GBU-31 GPS-aided JDAM (both Mk-84 general purpose bombs and BLU-109 penetrating bombs) or 24 Mk-84 2,000-pound general purpose bombs; 8 Mk-85 naval mines; 84 Mk-82 500-pound general purpose bombs; 84 Mk-62 500-pound naval mines; 30 CBU-87, -89, -97 cluster munitions; 30 CBU-103/104/105 WCMD, 24 AGM-158 JASSMs or 12 AGM-154 JSOWs.
Date Deployed: June 1985
Number Built:  (a) B1A model – 4; (b) B1B model – 100.

Unit Cost: $283.1 million (fiscal 1998 constant dollars)
Inventory: Active force, 65 (test, 2); ANG, 0; Reserve, 0

Sources: Air Combat Command (ACC), Boeing Company