Imran Khan
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US military looks to protect big arms programmes
Sunday, October 19, 2008
WASHINGTON: The US armed services are maneuvering to defend big-ticket weapon programmes as the nations economic woes mount and the government spends billions of dollars shoring up the financial system.
Experts say the services have a good chance of succeeding to the benefit of contractors such as Lockheed Martin Corp , Boeing Co , Northrop Grumman, General Dynamics Corp and Raytheon Co. To the extent there is budget pressure on the biggest programmes, they are likely to be stretched out or scaled back slightly rather than scrapped, several experts said.
Its very rare for programmes to be actually canceled, said Steven Kosiak, vice president for budget studies at the Centre for Strategic and Budgetary Assessments. Even such controversial efforts as missile defence, which has been receiving about $10 billion annually in recent years, was pruned less than three percent this year by lawmakers a measure of bipartisan support.
The Air Force is seeking the abrupt retirement of 314 F-15 and F-16 fighter aircraft and nine A-10 close air support planes to save $3.4 billion in fiscal 2010, which begins next Oct 1.
Its goal: to use the money to keep on track Lockheeds next-generation F-35 Joint Strike Fighter, modernize bombers and buy unmanned surveillance planes. In addition, Air Force officials have made clear they hope to extend production of Lockheeds radar-evading F-22 air superiority fighter a decision for a new president who will take office in January after the Nov 4 election. And less than 24 hours after canceling a projected $6.2 billion deal with Textron Incs Bell Helicopter unit due to cost overruns and delays, the Army said it would
stage anew competition as soon as possible.
The Army said a new fleet of 512 reconnaissance and attack helicopters remained a critical requirement. Big weapons programmes generate so many jobs that they spawn potent political constituencies, said Loren Thompson, a defence industry consultant. Weapons programmes will be fiercely defended. The Army is also seeking to protect its $160 billion Future Combat Systems program, the centerpiece of its modernisation efforts. The programme is co-managed by Boeing and SAIC.
Were 100 per cent behind it, and well make it a priority in all of our budgeting going forward, Army Secretary Pete Geren told reporters earlier this month, days after a $ 700billion financial rescue package was signed into law.
Not all defence-industry watchers believe military spending can be largely immune to the sputtering economy. James McAleese, a McLean, Virginia, government contracts lawyer, said the Army helicopter cancellation signals the start of leaner times for the defence industry. This vote of no-confidence is an obvious wake-up call for the rest of the defence community for at least the next four years, he said.
The Bush administration has projected that defence spending, adjusted for inflation, will flatten and gradually decline starting in 2010, after peaking in fiscal 2009 that began Oct 1. Defence spending has risen four or five percentage points above the inflation rate over the past eight years. Congress authorised $612.5 billion for national security in fiscal 2009, including $542.5 billion for the basic defence budget and a $70 billion allowance for the wars in Iraq and Afghanistan. Thompson said demand for fighter aircraft, ships, tanks and other multibillion-dollar weapons systems is driven mainly by overseas threats and domestic politics, not economic forces.
Congress, for example, often has defeated Pentagon efforts to kill programmes. This year lawmakers kept alive the Navys next-generation destroyer programme and a second engine for the F-35 fighter. David Berteau, a defence industry analyst at the Centre for Strategic and International Studies and a former Pentagon acquisition official, said the big programmes were based on fundamentally sound requirements.
If they were not funded, the military would have to spend large sums to upgrade aging systems or abandon missions and were not going to do that, he said. Jacques Gansler, the chief weapons buyer from 1997 to 2001 who still advises the Pentagon on many issues, predicted the sums being spent on national security would not have a precipitous decline.
Sunday, October 19, 2008
WASHINGTON: The US armed services are maneuvering to defend big-ticket weapon programmes as the nations economic woes mount and the government spends billions of dollars shoring up the financial system.
Experts say the services have a good chance of succeeding to the benefit of contractors such as Lockheed Martin Corp , Boeing Co , Northrop Grumman, General Dynamics Corp and Raytheon Co. To the extent there is budget pressure on the biggest programmes, they are likely to be stretched out or scaled back slightly rather than scrapped, several experts said.
Its very rare for programmes to be actually canceled, said Steven Kosiak, vice president for budget studies at the Centre for Strategic and Budgetary Assessments. Even such controversial efforts as missile defence, which has been receiving about $10 billion annually in recent years, was pruned less than three percent this year by lawmakers a measure of bipartisan support.
The Air Force is seeking the abrupt retirement of 314 F-15 and F-16 fighter aircraft and nine A-10 close air support planes to save $3.4 billion in fiscal 2010, which begins next Oct 1.
Its goal: to use the money to keep on track Lockheeds next-generation F-35 Joint Strike Fighter, modernize bombers and buy unmanned surveillance planes. In addition, Air Force officials have made clear they hope to extend production of Lockheeds radar-evading F-22 air superiority fighter a decision for a new president who will take office in January after the Nov 4 election. And less than 24 hours after canceling a projected $6.2 billion deal with Textron Incs Bell Helicopter unit due to cost overruns and delays, the Army said it would
stage anew competition as soon as possible.
The Army said a new fleet of 512 reconnaissance and attack helicopters remained a critical requirement. Big weapons programmes generate so many jobs that they spawn potent political constituencies, said Loren Thompson, a defence industry consultant. Weapons programmes will be fiercely defended. The Army is also seeking to protect its $160 billion Future Combat Systems program, the centerpiece of its modernisation efforts. The programme is co-managed by Boeing and SAIC.
Were 100 per cent behind it, and well make it a priority in all of our budgeting going forward, Army Secretary Pete Geren told reporters earlier this month, days after a $ 700billion financial rescue package was signed into law.
Not all defence-industry watchers believe military spending can be largely immune to the sputtering economy. James McAleese, a McLean, Virginia, government contracts lawyer, said the Army helicopter cancellation signals the start of leaner times for the defence industry. This vote of no-confidence is an obvious wake-up call for the rest of the defence community for at least the next four years, he said.
The Bush administration has projected that defence spending, adjusted for inflation, will flatten and gradually decline starting in 2010, after peaking in fiscal 2009 that began Oct 1. Defence spending has risen four or five percentage points above the inflation rate over the past eight years. Congress authorised $612.5 billion for national security in fiscal 2009, including $542.5 billion for the basic defence budget and a $70 billion allowance for the wars in Iraq and Afghanistan. Thompson said demand for fighter aircraft, ships, tanks and other multibillion-dollar weapons systems is driven mainly by overseas threats and domestic politics, not economic forces.
Congress, for example, often has defeated Pentagon efforts to kill programmes. This year lawmakers kept alive the Navys next-generation destroyer programme and a second engine for the F-35 fighter. David Berteau, a defence industry analyst at the Centre for Strategic and International Studies and a former Pentagon acquisition official, said the big programmes were based on fundamentally sound requirements.
If they were not funded, the military would have to spend large sums to upgrade aging systems or abandon missions and were not going to do that, he said. Jacques Gansler, the chief weapons buyer from 1997 to 2001 who still advises the Pentagon on many issues, predicted the sums being spent on national security would not have a precipitous decline.
