Skunk Works: A Personal Memoir of My Years at Lockheed

15 THE TWO-BILLION-DOLLAR BOMBER

Kelly’s ghostly voice nagged at me during the fifteen years I occupied his big corner office and ran his Skunk Works. I always thought of the place as his, because his personality and character were branded on everything we did. Whenever I did something I knew he would never approve of, the old pain in the butt would be hammering at my conscience with a sledgehammer. Expediency and Kelly were archenemies. As his successor, I inherited all his old nemeses as well as his friends. All of Kelly’s fourteen golden rules for running the Skunk Works stayed in place: they worked for him and they worked equally as well for me.

Angels belong in heaven, not in the tough competitive world of aerospace, but I kept my word to Kelly and never did build an airplane that I didn’t believe in. Like him, I turned down projects I felt were wrongly conceived. I never lied to a customer or tried to dodge the heat when we screwed up. I knew how other companies operated, and I was convinced that our reputation for integrity would gain more business than we would ever lose by turning away questionable ventures. And I was right.

I admit that being extremely careful about how we spent our time and limited resources was easier when profits were high and our workforce fully engaged. But I also turned back bucks when business was lousy too. For example, during one very slack period in the mid-1980s, the Reagan administration was ready to sign up the Skunk Works on a three-year feasibility study for developing a hypersonic airplane, which, by definition, meant an aircraft capable of flying faster than five times the speed of sound. The Reagan science advisers were proposing an airplane that flew at Mach 12 and offered me a million dollars per Mach number to show them how it could be done. The trouble was that I couldn’t design such a vehicle if they offered me twelve billion. That project was nothing but a simple-minded boondoggle from start to finish.

President Reagan had proposed a national hypersonic plane project during a televised address. The way he described it, Flash Gordon might have been his speechwriter. The vehicle, a commercial passenger plane, would take off from a regular airport runway, climb above the stratosphere into space, then, as an intercontinental rocket vehicle, blast into orbit, before gradually descending like a regular airliner to a distant airport. Reagan called the hypersonic plane “The Orient Express” because it would fly from New York to Tokyo in only two hours. Reagan wanted to build it in four to eight years. He’d be lucky to do it in fifty.

I was outraged by that speech — not at the president, but at his technical team, which apparently had sold him a hypersonic version of the Brooklyn Bridge. I phoned Reagan’s chief science adviser at the White House, Jay Keyworth, and told him the idea was utterly absurd. I reminded Keyworth of the enormous problems we had encountered building the Blackbird, which flew “only” at Mach 3.2. I said to him, “Do you know what would’ve happened if we tried to fly much faster than that? The airplane’s surface would have come apart from heat friction. And that was titanium. Do you have something stronger? And by the way, our crew wore space suits and we still worried about boiling them alive if our air-conditioning system failed. And you are proposing to fly at Mach 12, where the surface heat on the fuselage would be 2,500 degrees and still have a passenger cabin filled with women, children, and businessmen, sitting around in their shirtsleeves! Not in my lifetime. Nor in yours.” I told Keyworth, “Whoever dreamed up that presidential address ought to be canned. I’m not at all certain we would have that kind of technology ready by the middle of the damned twenty-first century, and if you don’t realize that, you are in the wrong business.”

But the lure of building a hypersonic airplane dies hard and has become fool’s gold to aerospace dreamers. The idea is still kicking around in Congress, its proponents in search of funding like a stray dog sniffing around for a bone. Building the airplane, to be called the X-30, will be a joint project of NASA and the Defense Department. But long before the first serious dollar is plonked down, someone in charge had better realize that Reagan’s “Orient Express” is really two separate concepts — one a rocketship and the other an airplane. Most likely, that particular twain shall never meet successfully.

Do the virtuous get their just rewards? The short answer is not if they’re dealing with the Pentagon on a regular basis. I had thought, for example, that because the Skunk Works had performed so brilliantly in developing the Stealth F-117A fighter in the mid-1970s that we had earned post position on the inside track for a new stealth bomber. To me, that was a logical evolution from one highly successful program to another. Events not only would prove me wrong, but would lead to the most costly debacle in the history of the defense industry.

I began with the best of intentions: to interest the blue-suiters in a stealth bomber that could carry out a mission over the most heavily defended targets. I made my pitch at the Pentagon one spring day in 1978, during lunch with two of the sharpest people in the business — Gene Fubini, head of the Defense Science Board, and Defense Under Secretary Bill Perry, who was the Carter administration’s czar of research and development and godfather of our stealth fighter program. Perry’s boss, Defense Secretary Harold Brown, had given him control over stealth. Both Bill and Gene were really depressed over the costly delays and poor testing of Rockwell’s new B-l bomber, built to replace the Strategic Air Command’s aging B-52 bomber fleet, but which had the look and feel of a lemon.

The Strategic Air Command was thinking of going instead with an updated version of the General Dynamics F-111, the swing-wing tactical fighter-bomber, which in its development phase as the TFX had been mired in political controversy and cost overruns of horrendous proportions. General Richard Ellis, who now headed SAC, looked favorably on the idea. Since the Air Force bought airplanes by the pound, Ellis wanted a smaller bomber that would cost less and be bought in large numbers in spite of tightening defense budgets. It was far from a perfect solution to SAC’s need to update its bomber command, but at that point most blue-suiters were struggling to find an alternative to being stuck with squadrons of B-1s that seemingly had a decade’s worth of problems to solve before they could become operational.

“If you guys are eager for a small bomber,” I told Fubini and Perry, “look no further than our basic design for the stealth fighter. All we’ve got to do is make it larger and we have an airplane that could carry the payload of the F-111, but with a radar cross section at least ten orders of magnitude better. We’ll hit the most heavily defended target on your list. Can the F-111 make the same claim?”

Both Perry and Fubini knew damned well I wasn’t just blowing sales smoke. They were both privy to the extraordinarily low radar results we were achieving with the early models of our fighter. Perry had also recently signed off on a study contract for us to begin designing a stealth naval vessel. He was practical and hard-nosed and demanded results, but he considered us the industry leader in the new stealth technology. Still, Perry had no intention of granting us a monopoly on stealth.

But canceling the B-1 bomber — rendered obsolete by stealth — was a major political mess. It would cost Rockwell millions of dollars and more than ten thousand jobs at its Palmdale, California, plant, and was certain to stir an explosive protest by California’s large and powerful congressional delegation. But before our lunch broke up, I had the clear impression that Perry was going to suck up his courage and push Harold Brown and Jimmy Carter to cut their losses and shelve the B-1, which had been designed principally to nuke the Russians by coming in low on the deck to make its bombing run, avoiding radar detection. The Air Force had completed a disturbing study of the airplane’s survivability against the latest Soviet ground and air weapons that indicated that 60 percent of the B-1 attack force would be shot down before reaching its target. That loss rate was intolerable. By contrast, the Skunk Works had commissioned an independent study by a defense think tank showing that a bomber employing our stealth technology would achieve a survivability rate over the most heavily defended targets of greater than 80 percent.

A few days after my Washington lunch with Fubini and Perry, I received a call on my secure line from Major General Bill Campbell, who was head of planning at SAC. Bill was no stranger to the Skunk Works. He was a former SR-71 pilot, and I knew him well. “Ben,” he began, “General Ellis would be very receptive to a stealth bomber. I want to send out to the Skunk Works a couple of our most senior bomber pilots to sit down with you and your people and work up for General Ellis’s approval the requirements for a deep-penetration stealth attack bomber.”

I was delighted. SAC’s needs and our technology would be in perfect sync from the earliest planning stages. And ever mindful that the final decision rested with General Ellis, I nicknamed our stealth bomber project after Ellis’s wife, Peggy, and I hoped he would remain happily wedded at least until we had the contract in hand.

The SAC pilots, both colonels, worked with us in Burbank for two months, helping to draw up a requirement description for a small tactical bomber with a range of 3,600 nautical miles, carrying a payload of 10,000 pounds. Our airplane was configured to supplant its potential rival, the F-111.

General Ellis quickly approved the program. And we received funding for a two-year development study. So I had every reason to believe that the Skunk Works was going to stay busy for many years to come. We would soon be building squadrons of stealth fighters, maybe as many as 150 of them, and almost simultaneously begin producing a similar number of stealth bombers — and I was anticipating more work than even Lockheed’s main plant could possibly handle.

The bomber project alone would be enormous. And it never crossed my mind that we might still lose the bomber project after Bill Perry convinced President Carter to kill the B-1. We were the logical choice to replace the B-1.

Perry was convinced that a stealthy deep-penetration bomber would give us air supremacy over the Soviet bloc for at least a decade or longer. He sold Secretary Brown and the Joint Chiefs. They, in turn, sold the president. Anti-stealth technology was a hundred times more difficult to develop than the original stealth technology itself, and would demand extraordinary breakthroughs in the area where the Russians were at their weakest — in supercomputers.

That period at the Skunk Works was the busiest I had ever been. Had I been less preoccupied juggling several big stealth projects simultaneously I might have given more thoughtful consideration to life without Bill Perry at the Pentagon. Because as the presidential campaign heated up and we headed into the fall election, President Carter was clearly in deep political trouble and the chances were growing that Ronald Reagan was about to become the new commander in chief. Perry was a Democrat and was certain to be replaced by the Reagan defense team. Perry enjoyed respect both in the Pentagon and on the Hill for his technical acuity; without him, the Skunk Works lost a true believer in stealth technology, willing to push against the Pentagon bureaucracy to get important work done.

Northrop was our closest rival in stealth technology. Although they had lost to us in the stealth fighter competition, they were damned good. Their stealth guru was a bearded maverick named John Cashen, a shrewd and tough competitor, who once told me over a few friendly beers that if he had a choice between going to bed with the world’s most beautiful woman or beating the Skunk Works out of a contract, he would not hesitate for a second knowing which to choose. “I’d rather screw Ben Rich any time,” John chuckled.

John had heard rumors about our supersecret bomber project and managed to push his way into competition with an unsolicited proposal of his own. “This is going to be a huge project, in the billions of dollars, and we can’t just hand it to you on a platter,” an Air Force general told me. That was probably true, but I knew it was only half the story.

The open secret in our business was that the government practiced a very obvious form of paternalistic socialism to make certain that its principal weapons suppliers stayed solvent and maintained a skilled workforce. Aerospace especially demanded the most trained workers, a labor pool totaling about a quarter million, in the employ of the four or five biggest manufacturers and their host of subcontractors. Each of the major players enjoyed its own special niche, which kept contract awards relatively equitable. The largest was McDonnell Douglas, which specialized in fighters, building hundreds of F-15 interceptors for the Air Force and the Navy’s top fighter, the F-18. Next came General Dynamics, builder of the F-16, a cheap, lightweight fighter sold by the hundreds to our NATO allies, as well as submarines, tanks, and missiles. Lockheed was a solid third, specializing in Polaris missiles, satellites, military cargo aircraft, and spy planes. And finally, Northrop and Rockwell.

At the time that the blue-suiters informed me that Northrop would be competing against us for the stealth bomber, the rumor in the industry had Northrop taking it on the chin with big losses on a project I was familiar with. I couldn’t help but chuckle because they had screwed up royally while trying to peddle the lightweight fighter they had wanted me to come aboard to build.

Kelly was right on two counts: Northrop never did start up a Skunk Works operation and its top management was all over that lightweight fighter, interfering in ways that made a bad situation infinitely worse. They had lost more than $100 million on that single-engine fighter, called the F-20, built at the administration’s suggestion as a so-called nonprovocative fighter, which meant one that was made to be sold to friendly countries but designed to be vulnerable to our own state-of-the-art interceptors. Arming our friends was good business, but being able to shoot them down if they became our enemies was good strategy. To build this kind of airplane required the permission and cooperation of the administration, which could otherwise block such hardware sales.

So Northrop zeroed in on the Taiwanese, who were receptive to upgrading their fighter squadrons with the new Northrop product. But when the mainland Chinese voiced outrage at the impending sale and called it a serious provocation, the administration got nervous and withdrew Northrop’s license to sell the fighter.

Perhaps tacitly acknowledging the administration’s culpability in the fighter fiasco, the Pentagon invited Northrop into the bomber competition. I should have read the tea leaves right then about the final outcome of the competition, but I was naive and perhaps a trifle self-confident that we would win on merit, given our expertise and experience in stealth technology. We had the better team, but Northrop had the greater need.

Rockwell was already on the ropes because of the loss of the B-1, and if Northrop was forced to endure big layoffs and big losses with no project in sight to turn things around, the impact would devastate the aerospace business and create economic and political turmoil. Carter and the Democrats were standing in the middle of a thawing lake watching the ice crack all around them.

Because of stealth, we in the Skunk Works had actually prospered under the Democrats. In fact, during his final months in office before the Reagan team took over, Bill Perry was deeply concerned that we in the Skunk Works were overextended with stealth projects and were underestimating the demands involved on our facilities and workforce if we won the bomber competition. About two weeks before Reagan’s inauguration, Bill called me to offer guidance. “Ben,” he cautioned, “this project will be too big for you to handle in the usual Skunk Works way. The Air Force will want five bombers a month. You’ll need ten times the space and workforce. I just don’t think you can go it alone. Get yourself a partner and team up.”

His suggestion made sense, and I phoned Buzz Hello, who was head of Rockwell’s aircraft division, which had been decimated by the administration’s decision to cancel the B-1 and had thousands of square feet of empty floor space at its big assembly plant in Palmdale, about sixty miles from Burbank. I enjoyed pleasant relations with Hello, and using his giant facilities would save us a fortune. And he had on payroll a lot of skilled workers who had already been security cleared by working on the B-1. Hello was extremely receptive to my call and agreed to become my partner on the stealth bomber. Five minutes after I hung up, Hello received a call from Northrop’s CEO, Tom Jones, asking him to be Northrop’s partner on the same project. Jones was furious that I had beaten him to Rockwell and partnered with Boeing instead.

Teaming up was a great way to economize and cut financial risks, but it was also tricky. Today’s teammate was tomorrow’s competitor and there was a natural reluctance on both sides to share certain state-of-the-art technology or advanced production techniques. I took thirty of Buzz Hello’s bomber engineers and brought in Lockheed’s best program manager, Dick Heppe, to take charge for us, figuring that after we won the competition, Lockheed’s main plant would share a lot of the B-2’s production with Rockwell.

After Perry left, it didn’t take long for the project to change drastically. He was barely out the door when all the Air Force stealth programs were moved out of the Pentagon to Wright Field in Dayton, under General Al Slay, head of the Air Force Systems Command. Slay was a true believer in the new stealth technology, but he immediately changed the game plan. He was not at all interested in our original requirement for a medium-size bomber; he wanted a big bomber with expanded payload and weapons capability and a six-thousand-mile range. We rushed back to the drawing board to meet his demands.

The funding for the competition came out of a secret stash in the Air Force budget. A young colonel working in the Air Force “black program” office at the Pentagon, named Buz Carpenter, arbitrarily assigned the funding the code name Aurora. Somehow this name leaked out during congressional appropriations hearings, the media picked up the Aurora item in the budget, and the rumor surfaced that it was a top secret project assigned to the Skunk Works — to build America’s first hypersonic airplane. That story persists to this day even though Aurora was the code name for the B-2 competition funding. Although I expect few in the media to believe me, there is no code name for the hypersonic plane, because it simply does not exist.

Northrop’s design team and mine worked in total ignorance of what the other side was doing. But following basic laws of physics, they came up with strikingly similar designs — a flying-wing shape, a type that Jack Northrop, the company’s founder, pioneered in the 1940s. Unfortunately, he was not able to create aerodynamic stability in the age before sophisticated computerized avionics, so his flying wing never really got off the ground. Our designers and Northrop’s had no problem making our wings fly and concluded that this unusual boomerang shape afforded the lowest radar return head-on and provided the favorable lift-over-drag ratio necessary for fuel efficiency in long-range flight.

I had absolutely no idea that we and Northrop were designing the same basic airplane shape until Gene Fubini, head of the Defense Science Board, came to visit me at the Skunk Works and saw a model of our stealth bomber on my desk and gasped, “How in hell did you get a model of the Northrop stealth bomber?” When Fubini saw my amazed look, he knew he had spoken indiscreetly.

Both companies were preparing quarter-size models of their designs for a “shoot-out” on an Air Force radar range in New Mexico to determine stealthiness. Wind tunnel tests would follow to determine the best lift-over-drag ratios and other aerodynamic characteristics. The winner would claim the big bomber contract, a high-stakes twenty-year B-52 replacement program.

Although the two designs were very similar, the big difference between them was that John Cashen was getting advice from a three-star general at the Pentagon to make the airplane as large as possible to extend its range, while I was listening to a three-star general at SAC headquarters in Omaha, who urged me to stay as small as I could get away with while still meeting the basic Air Force requirements for the new bomber. “I’m telling you, Ben, that small will win over big, because budget constraints will force us to go with the cheaper model in order to buy in quantity.” His strategy made sense. But it also created a few significant structural differences in the two models. Because our airplane was designed to be smaller, the control surfaces on the wing were smaller, too, which meant we needed a small tail for added aerodynamic stability. Northrop had larger control surfaces and needed no tail at all. So they had a slight advantage in lift-over-drag ratios, which meant a better fuel efficiency for extended-range flying.

In May 1981, we and Northrop contested on the Air Force radar range. Our results were spectacular; through the grapevine I heard that we beat John Cashen across the board, on all frequencies. A few weeks later I received a classified message from Wright Field questioning the figures we had submitted on aerodynamic wing efficiency. The message was addressed to Northrop, but mistakenly routed to me. So I saw that Northrop’s team was claiming an efficiency 10 percent greater than our own. Frankly, I would question that, too.

Our quoted price to the Air Force per B-2 was $200 million. I heard that Northrop’s quote was significantly higher, so I was shocked when we received formal notification, in October 1981, that Northrop had been awarded the B-2 project “on the basis of technical merit.” I was so outraged that I took the unprecedented step of trying to challenge the ruling. Lockheed’s CEO, Roy Anderson, agreed with me and marched on Verne Orr, then secretary of the Air Force, to protest. The two had an angry confrontation. Orr pounded on his desk and said, “Goddam it, not only was Northrop better than you, they were much better than you.” Anderson, barely in control of his own temper, just looked Orr in the eyes and responded, “Well, Mr. Secretary, time will tell.”

Yes, indeed. Truer words than Roy Anderson’s were seldom spoken.

A blue-suiter called me to explain that the Air Force had determined that Northrop’s B-2 had better payload and more range and therefore would be the better buy. While it was true that Northrop’s B-2 was more visible in most radar frequencies than our airplane and therefore more vulnerable, it would need to make fewer sorties because it carried more bombs than our model. Therefore, fewer sorties evened out our advantage in being less visible. “The bigger the bomber, the fewer the missions over hostile territory. Their loss rate would be no worse than yours, and might even be better,” Secretary Orr had insisted to Roy Anderson. I figured Orr must have had Jesuitical training.

Lockheed’s management was, of course, disappointed, but no one blamed me for the loss. To a man, we knew we deserved to win that contract. But the toss of the dice was out of our hands, and we found solace in our leadership in stealth technology, which had made the Skunk Works a billion-dollar enterprise for the first time in its history.

In the end, the government’s B-2 decision cost the taxpayers billions. Northrop was supposed to build 132 B-2s at a cost of $480 million each — more than twice what we had originally estimated per airplane. But as those projected costs mounted drastically, Congress lowered the number of bombers to be built to seventy-five and the cost per airplane leaped to $800 million. The fewer the airplanes, the higher the cost is a reliable rule of thumb and a painful lesson about the awful cost of failures in the expensive defense industry business. Now the number of B-2s authorized by Congress is only twenty, and the American taxpayers are spending an incredible $2.2 billion on each B-2 being produced, making the B-2 the most expensive airplane in history. When one crashes — and new airplanes inevitably do go down — it will be not only a tragedy but a fiscal calamity. Northrop’s management is in large part to blame for all the delays and cost overruns, but so is the Air Force bureaucracy, which has swarmed over this project from the beginning. When we began testing our stealth fighter, the combined Lockheed and Air Force personnel involved totaled 240 persons. There are more than two thousand Air Force auditors, engineers, and official kibitzers crawling all over that troubled B-2 assembly building in Palmdale. What are they doing? Compiling one million sheets of paper every day — reports and data that no one in the bureaucracy has either the time or the interest to read.

The Air Force now has too many commissioned officers with no real mission to perform, so they stand around production lines with clipboards in hand, second-guessing and interfering every step of the way. The Drug Enforcement Agency has 1,200 enforcement agents out in the field fighting the drug trafficking problem. The DOD employs 27,000 auditors. That kind of discrepancy shows how skewed the impulse for oversight has become both at the Pentagon and in the halls of Congress.

Under the current manufacturing arrangements, Boeing makes the wings, Northrop makes the cockpit, and LTV makes the bomb bays and back end of the B-2 airplane, in addition to four thousand subcontractors working on bits and pieces of everything else. Because of the tremendous costs involved, this is probably a blueprint for how big, expensive airplanes will be built in the future. For better or worse, this piecemeal manufacturing approach — rather than the Skunk Works way — will characterize large aerospace projects from now on. With many fewer projects, the government will have to spread the work across an ever broader horizon. What will happen to efficiency, quality, and decision making? At a time of maximum belt-tightening in aerospace, those are not just words but may well represent the keys to a company’s ability to survive.