The war in Europe was quickly growing more desperate and the lessons learned from the British use of Flying Fortresses told Boeing that their revolutionary aircraft design of 1934 was not going to last long in the bloody skies over Europe in the 1940s. The Army and Boeing both agreed that a new revision of the B-17 was in order and the Army, looking ahead, already had Consolidated working on what would become the B-24 which first flew on September 5, 1941.
There were many inadequacies of the B-17D. First and foremost was the utter lack of rear armament. The British had commented on it and the Japanese would later drive this point home in the Philippines. Also, the B-17 was not very stable at high altitude because of the small size of its rear stabilizer. Lastly, the firepower of the B-17D left a lot to be desired against the new fighters from Japan and Europe.
The new model was the Boeing 299-O. All future B-17s up to and including the G model would be designated by Boeing as 299-Os. The new model was designated the B-17E by the U.S. Army, however.
The B-17E was a completely new aircraft from the radio room back. Boeing's first priority was to add some kind of rear defense. The British had felt that a powered rear turret was a must but to install one on the B-17 would completely ruin the aircraft's sleek, aerodynamic lines and increase the aircraft's drag. Boeing was not willing to do such a dramatic change. Instead, they moderately increased the diameter of the rear fuselage to incorporate a new tail gun position. Two handheld .50 Caliber machine guns were placed on a pivot mount with their barrels exiting the fuselage through a canvas cover. This allowed the B-17 to retain its tapered, cylindrical fuselage and the aerodynamic benefits that went along with it. The gunner in this position sat in a kneeling position on what can best be descried as a modified bicycle seat.
The E was also the first of the 'Big Tailed' B-17s. The rear tail-plane was greatly increased in size and came from Boeings new 307 pressurized airliner. The fin was extended along the top of the fuselage by ten feet. The larger tail and the extended fin gave the B-17E exceptional high altitude lateral stability making it the perfect bombing platform for the rest of the war in Europe.
To address the armament issued, two other new and remarkable changes were made to the aircraft. The bathtub underside gun position was found to have such a limited firing arch that it was completely replaced by a remote controlled Bendex power turret. The gunner sighted the turret through a periscope blister projecting through the bottom of the fuselage just aft of the turret. The gunner would have to lay prone on the floor of the waist to sight this. This was not the best fix however since the gunner had a very limited field of view through the periscope and couldn't track fast moving modern fighters.
Only the first 112 B-17Es were equipped with this turret before it was replaced with the Sperry Ball Turret starting on aircraft number 41-2505. In a normal power turret of the day where the guns would pivot up and down while the turret moved only side to side, the guns in the Sperry Ball Turret were fixed and the entire turret would move to aim them. The gunner would be completely encapsulated in the turret, sitting in a fetal position, while he aimed and fired the guns. This turret would remain on the B-17 until production stopped in 1945.
In addition to the powered lower turret, a powered upper turret was also installed just behind the flight deck. The observation blister was deleted and a power operated Bendex turret with two .50 caliber machine guns was installed in its place. This position greatly improved the firepower to the front of the aircraft as well as offering defensive fire to the other sections of the aircraft. A single .50 caliber machine gun was also added to the radio room to help further protect the rear of the aircraft.
Alas though the issue of nose armament was still unresolved. Whether they felt the new top turret would cover frontal protection or they felt it was just unnecessary to upgrade forward firepower is unknown. Lastly, the waist windows went from being tear-drop shaped to rectangular, giving the gunners better fields of fire.
Up front, the cockpit windows were increased in size and new Upper Canopy windows were added over the pilot positions. Also added was a completely retractable tail wheel to help diminish the aerodynamic affect of the rear fuselage's increased diameter and the larger rear horizontal fin.
A contract for 277 B-17Es was signed in August of 1940. Two weeks later, another 235 aircraft were ordered. However, now there was a war on in Europe and production of the aircraft slowed because of a lack of raw materials. Also, Boeing wasn't prepared to handle the large government orders that accompanied the preparations for war. Because of this, the first B-17E was delivered 150 days late. Regardless, the last of the 512 B-17Es ordered was delivered fifty days ahead of schedule. Even so, the government knew that Boeing would need help in producing this aircraft when war broke out so the Army issued contracts to rival manufactures Douglas and Lockheed-Vega to produce B-17s under license from Boeing. By the time Douglas and Vega were tooled up for production, the B-17F was already on Boeing's assembly line. This unified production pool was known by it's initials, BVD and was founded in 1941.
The performance changes of the B-17E were marginal at best. Top speed actually dropped from 323 mph to 317 mph at 25,000 feet, a six mph difference. The height of the plane at rest went from 15' 5” to 19' 1”. The B-17E was heavier, slower, and had a slower rate of climb than the previous versions of the aircraft. However, a B-17E set up with pressure equipment for testing climbed to 42,000 feet!