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Reagan's Betrayal

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When Reagan entered office, it would seem that the glory days had come for Northrop. Holmes Tuttle and the rest of Reagan's southern California kitchen cabinet from his Sacramento governor days held major influence in the new administration. The promise seemed fulfilled when Northrop landed the immense but deep-black contract for the B-2 stealth bomber. To be developed in complete secrecy, 100 of these bombers, invisible to radar, were to be built. They would bring the Soviet defense establishment to its knees by making its entire air defense system - the expensive crown jewel of the Soviet defense forces - totally obsolete.

Soviet air defense was based on an enormous web of radars, which led Soviet interceptors and surface-to-air missiles to intercepts with incoming American bombers. The B-2 was not invisible, but its radar signature was so small that it had to be within a few miles of a Soviet radar station to be detected. It could avoid known stations. Using radar detectors which could determine the direction of Soviet radars long before they could see the aircraft, it could also avoid mobile or unmapped stations. The B-2 was the cornerstone in Reagan's strategy to destroy the Soviet Union by making its offensive and defensive forces obsolete.

The B-2 was also important to Norcrafters because it was to mark the final triumph of John Northrop, the company's founder. Northrop's B-35 flying wing would finally go into production, thirty years later, in the guise of the B-2. It was not coincidence that the wingspan of the two aircraft was identical.

So it would seem that Northrop's golden days lay ahead. But Washington is not run by dictators. Other political forces were pulling in other directions. In January 1982, under pressure from China, Reagan personally vetoed the Taiwan deal for the F-5G. The aircraft had lost its launch customer. But the administration still backed Carter's export policy half-heartedly at first. The F-20 was proposed as more 'appropriate' and 'cost effective' for countries like Jordan, Egypt, and Turkey.

But General Dynamics saw the opportunity to finally be clear of Carter's goody-two-shoes edict restricting export of the F-16 to developing countries. The US Air Force began actively undermining the marketing of the F-20 through the back door. The Air Force had a vested interest in getting the F-16 widely exported and sold in massive numbers. More foreign customers for the F-16 would increase the production rate, take the aircraft down the learning curve, and make the aircraft much cheaper for the US Air Force to purchase for its own needs. Furthermore, widespread use of the aircraft by nominal allies around the world gave the Air Force a kind of reserve worldwide F-16 logistics network. Allies' ground equipment and handling facilities could be used for supporting quickly-deployed American aircraft in an emergency.

The Air Force exploited its position as a government entity to easily market the F-16. Under arcane American weapons export laws, Northrop had to submit every scrap of marketing literature, even glossy brochures that only contained information that had already been published worldwide in Aviation Week, Flight International, or Jane's, to a lengthy US government review. It could take months before approval was granted, on a case-by-case basis, to provide technical information on the F-20 to prospective customers. Air Force officers, on the other hand, could and did just hand over requested F-16 technical information to interested countries immediately, without any government approvals.

It also seemed to these countries, regardless of the technical and logistics merits of the two aircraft, that those being offered the F-20 were being told they were second-class allies, not deserving to fly the fighter that was the choice of the US Air Force. When the Reagan administration agreed to supply the Air Force version of the F-16 to Venezuela for delivery in 1983, it was the death knell for the F-20.

Reagan had also boosted F-16 production to astronomic levels as part of his defense buildup. This drove the aircraft down the learning curve and brought the price down to $ 8 million per aircraft, the same as the F-20. The F-20 now only had an advantage in technical excellence, and a logistics and fuel cost 1/3 less than the F-16. But the same gush of funds was allowing the Air Force to begin development of the F-16C. This version would be fitted out with all-digital avionics (although not a laser INS at first). It would be available by the late 1980's, and have the full backing of the US Air Force. So that would remove the technical lead of the F-20. All that was left was the logistics cost argument. Northrop attempted to address this by guaranteeing the price per flight hour to prospective customers - for twenty years (this drama is detailed below).

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