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Boeing Suffers the Most from Gates' Proposed Cuts in Defense Programs

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Decisive Cuts Define Pentagon's Way Forward

Defense Secretary Robert M. Gates today laid out his recommendations for the 2010 budget during a Pentagon press conference. Among the most dramatic cuts are the restructuring of the Army's Future Combat Systems program, which will terminate the Manned Ground Vehicle (MGV) segment of the program, saving some $85 billion. The $26 billion Transformational Satellite (TSAT) will also be axed. The $13 billion presidential helicopter program is also to be terminated. The Air Force will cease procurement of F-22, C-17 and planned acquisition of combat search and rescue helicopter will be terminated. A third base for Ground Based Interceptors will not be fielded. The Navy will push back the construction of several vessels, including aircraft carriers, amphibious and supply ships. On the upside, Gates wants to allocate more funding to accelerate F-35 production, he also added $2 billion to augment intelligence, reconnaissance and surveillance operations, by manned and unmanned assets. $900 million will be allocated to fund naval and land-based theater based missile interceptor programs. While Gates' proposed cuts are dramatic, the final decision is with the U.S. Congress which has the constitutional responsibility to decide whether to support these proposals.

Terminating the Manned Ground Vehicle (MGV)

The Army's Future Combat Systems program has become a primary target for Gate's cuts. The program is expected to undergo significant restructuring if Gates' recommendation on canceling the vehicle component of the current FCS program will follow through. The eight vehicles utilizing the MGV common chassis were the cornerstone of the Future Brigade Combat Team and the main justification for many of the systems' developments, including active and passive protection, system of systems architecture, communications and data transfer capabilities. This was also the most significant cost factor in the program - the MGV family was attributed with a budget of some $87 billion. It was also the least mature element of the program. "I believe we must have more confidence in the program strategy, requirements, and maturity of the technologies before proceeding further" warned Gates.

The secretary of Defense said he is particularly concerned that the MGV requirements, defined nine years ago, did not consider the current threats and shift toward heavier armor, a trend clearly demonstrated by the MRAP vehicle program, initiated and encouraged personally by Mr. Gates. "An Army vehicle modernization program designed to meet the needs of the full spectrum of conflict is essential. But, because of its size and importance, we must get the acquisition right, even at the cost of delay." said Gates. He said the Army should reevaluate the requirements, technology and approach and then re-launch the Army's vehicle modernization program, including a competitive bidding process. "I have concluded that there are significant unanswered questions concerning the FCS vehicle design strategy. I'm also concerned that, despite some adjustments, the FCS vehicles -- where lower weight, higher fuel efficiency and greater information awareness are expected to compensate for less armor -- do not adequately reflect the lessons of counterinsurgency and close-quarters combat in Iraq and Afghanistan." explained Gates.

Part of the FCS program that has reached advanced maturity will be accelerated while other elements will be delayed. The initial increment of the program is expected to 'spin out' technology enhancements to all combat brigades beginning FY 11. 

Gates also recommended the Army will trim its projected order of battle, leveling at 45 Brigade Combat Teams (BCT) rather than the 48 planned before, maintaining the troop level at 547,000, considered sufficient to maintain the manpower quality, and unit readiness while rotating units between training and combat missions. In order to increase the availability of helicopters to support deployed units, Gates plans to request $500 million more to recruit, train and support aircrews and ground support teams.

F-35 in – F-22 Out

The air force will also suffer under Gates' cuts. The secretary of Defense recommended ending the production of the F-22 fighter program. Lockheed Martin will build the last four aircraft approved by the Bush administration last year but cease production at 187 aircraft. The last F-22 rolls off the line toward the end of 2011. He reaffirmed his commitment to the Joint Strike Fighter program and recommended to add 16 additional F-35s (total 30) to be bought in FY '10, increase the funding for the program from $6.8 billion to $11.2 billion. According to Gates, shifting gears between the two programs will be able to maintain and even increase workforce committed to the program. In total, Gates plan to buy 513 F-35s over the five-year defense plan, and ultimately plan to buy 2,443. Gates indicated that the KC-X aerial refueling tanker schedule and funding will be maintained, with the intent to solicit bids this summer. The production of C-17 will be completed this year. Gates said that according to analysis, the 205 aircraft currently in service or construction are sufficient to sustain operations as planned.

A $2 billion increase in intelligence, surveillance and reconnaissance (ISR) support for the warfighter will fund the fielding and sustaining of 50 Predator and Reaper class unmanned aerial vehicle orbits by FY '11 and maximizing their production. This capability partly funded within the Global War on Terror supplemental budget, will now be permanently funded in the base budget. It will represent a 62 percent increase in capability over the current level and 127 percent from a year ago. In addition to the unmanned systems, manned ISR capabilities will also be augmented. DOD plans to initiate research and development on a number of ISR enhancements and experimental platforms optimized for today's battlefield, following the successful induction of turboprop aircraft deployed as part of Task Force ODIN in Iraq. Special Operations Command will increase personnel by more than 2,800, or 5 percent. Additionally, more funding is requested to buy more special-forces-optimized lift mobility and refueling aircraft. With the expected introduction of the new fighter, the air force is planning to retire 250 of its oldest Air Force tactical fighter aircraft in FY '10.

The $26 billion Transformational Satellite program (TSAT) will also be terminated. Instead, the Pentagon will deploy two additional Advanced Extremely High-Frequency (AEHF) satellites. Another future program being terminated is the next generation bomber, originally considered to replace the B-2 by 2018.

Gates said he is determined to stop programs that significantly exceed their budget or which overshoot the nation's needs. "Our conventional modernization goals should be tied to the actual and prospective capabilities of known future adversaries, not by what might be technologically feasible" said Gates.  Programs that haven't reached adequate maturity levels are also axed. Among these is the acquisition of presidential helicopter fleet of 23 VH-71 helicopters which exceeded the planned budget by 5.5 billion, and has fallen six years behind schedule. President Obama will have to contain with the current 30-40 years old VH3 helicopters until a new follow-on program is introduced, around FY-11. Gates also calls for the termination of the Air Force Combat Search and Rescue X helicopter program. "We will look at whether there is a requirement for a specialized search and rescue aircraft along the lines that the Air Force had in mind and whether it should be a joint capability" said Gates.

Missile Defense Programs

The Pentagon plans to add $700 million to field more Terminal High Altitude Area Defense (THAAD), and the Naval Standard Missile 3 systems, to increase deployable missile protection capabilities to protect U.S. forces and interests overseas. Additional $200 million funding will also be allocated for the conversion of six additional Aegis ships to provide ballistic-missile-defense capabilities.

The missile defense program will be restructured to reflect the current focus on theater missiledefense and, on intercepting long range ballistic missiles in their boost phase, rather than addressing each targets individually in either midcourse or the terminal phases. The U.S. priorities in missile defense were to protect the homeland, then protect allies, deployed forces and friends. "We're going to focus on our deployed forces, our allies and friends." said General JAMES CARTWRIGHT (USMC, Vice Chairman of the Joint Chiefs of Staff), "the systems that are considered operational - SM-3, THAAD, Patriot (PAC3) - building them out in quantity so that we can deploy them and move forward quickly there while we start to reassess what it is we can do in the boost phase for long range."

The primary threat is viewed as a missile attack from rogue states. Therefore, the number of ground based missile interceptors deployed in Alaska is considered sufficient and will not be increased as proposed before. Furthermore, the Multiple Kill Vehicle (MKV) program will also be canceled, due to significant technical challenges and the need to take a fresh look at the requirement. However, research and development in ballistic missile defense will continue to improve their effectiveness and capabilities of current assets, particularly against threats posed by North Korean missiles. Construction of a second Airborne Laser (ABL) Prototype Aircraft will also be cancelled. The testing and evaluation of the only existing ABL will continue - it was saved only due to the fact that the system's being a 'boost phase' type interceptor. Overall, the Missile Defense Agency program will be reduced by $1.4 billion. 

Focusing on LCS, and Aegis

Despite plans to terminate the DDG-1000 program, Gates decided to give the Navy an extension of time to work out a solution with the two shipyards tasked with building the first two prototypes - Bath Iron Works in Maine and Ingalls, in Mississippi. The current plan rely on a single shipyard to construct only three vessels. If the Navy is successful in shifting DDG-1000 construction to Maine, Bath will build two additional destroyers beginning in FY '10. Otherwise, the program will end with the first ship currently being built at Bath. Both shipyards will shift back to construct DDG-51 Aegis destroyers with Ingalls converting immediately and Bath convert to DDG-51 after completing the three DDG-1000s. The shipyards and Navy are expected to reach and understanding on this matter as lacking a conclusion, the disrupted workflow could result in layoffs.

The Navy aircraft carrier program will be shifted to a five-year build cycle, resulting in 10 carriers after 2040. The Next Generation (CG-X) Cruiser, amphibious-ship and sea-basing programs will be delayed. Construction of the 11th landing platform dock ship and the mobile landing platform ships will also push back to FY '11. Gates is supporting the U.S. Navy's goal to acquire 55 littoral combat ships and is recommending to increase the procurement of such vehicles from 2 to 3 in FY'10, the LCS is "a key capability for presence, stability and counterinsurgency operations in coastal regions" said Gates. The Navy should also improve its inter-theater lift capacity, operating four chartered joint high-speed vessels, until JHSVs are being delivered beginning in 2011. The Fiscal Year 2010 will also fund the procurement of 31 F/A-18E/Fs for naval aviation.