Wednesday, September 02, 2009
Air Force Would Cancel Boeing C-130 Upgrade, 15 Other Programs
By Tony Capaccio Sept. 2 (Bloomberg) -- The Air Force in its new five-year budget plan proposes canceling a Boeing Co. program to build and install upgraded software in the cockpits of C-130 transports. Ending the program Chicago-based Boeing won in 2001 would save about $345 million in fiscal 2011 and a total of $2.8 billion through 2015, according to unreleased budget documents. The savings would be the largest from 16 programs the service proposed to cancel as discussions opened on the new long-range plan. The review will continue until December with the goal of submitting it to the White House along with the military’s detailed fiscal 2011 budget in January. Other programs that would be cut include a radio communications system Lockheed Martin Corp. is building and a Boeing satellite communications system. The Pentagon directed the Air Force to cut about $24.2 billion, or about 3.8 percent, from the current $632 billion five-year plan, according to charts prepared and presented to senior Pentagon officials Aug. 18 by Lieutenant General Raymond Johns, deputy chief of staff for strategic plans and programs. The service “terminated programs with issues in performance, cost or rationale,” Johns wrote. The proposed budget, Johns stated, aims to protect “to the greatest degree possible” funding for the three top aircraft programs: the Lockheed Martin Corp. F-35, the military’s most expensive weapons program; the Air Force version of the V-22 Osprey tilt-rotor aircraft being built by Textron Inc. and Boeing; and the program to build a new aerial refueling tanker. Gates’s Guidance The service’s 2011-2015 plan is influenced by Defense Secretary Robert Gates’s guidance calling for modest growth in defense spending with emphasis on improving the security of nuclear weapons and building capabilities to conduct irregular warfare and cyber defense. President Barack Obama assigned Gates to rein in defense spending, which now consumes about 19 cents of every dollar of the federal budget. Adjusted for inflation, defense spending has grown about 43 percent since fiscal 2000. When war costs are included, the number increases to 72 percent. A study by the U.S. Government Accountability Office found that of the $1.7 trillion spent on new weapons in the last decade, 54 percent, or $919 billion, was attributable to cost increases. The Air Force was told it couldn’t reduce spending on military pay and benefits, family housing, science and technology or funds to sustain building infrastructure, according to the briefing charts made available to Bloomberg News. Air Force spokeswoman Colonel Marcella Adams said the service would not comment on the proposed budget. Other Terminations The largest other programs proposed for terminations and the potential 5-year savings include: -- $1.8 billion saved by canceling the Joint Tactical Radio program, a communications system that Lockheed is building for the Air Force and Navy. The Navy also proposes terminating the program, according to budget documents. -- $1.6 billion saved by ending the Wideband Global high- speed communications satellite system after a constellation of six satellites already on contract with Boeing is built. -- $641 million saved by canceling the Northrop Grumman Corp. program to build new engines for E-8 Jstars reconnaissance aircraft; -- $407 million saved by curtailing Boeing’s Small Diameter Bomb program. The 250-pound satellite-guided bombs are now being used in Iraq. --- $292 million saved by cutting to eight from about 22 the number of advanced Block 40 Global Hawk drones that Northrop Grumman is building. The Air Force in its 2011 budget would see savings of $212 million, $115 million and $110 million respectively from canceling the purchases of the Northrop E-8 engine and Global Hawk and the Lockheed joint radio. Upgrade Program The C-130 Hercules is the world’s most widely used short- and medium-range transport with over 2,200 built since the 1950s. The Air Force has about 427, including newer model C-103Js, which have the upgraded cockpit electronics. The plane is used in all military theaters including Iraq and Afghanistan. The program to install 222 upgrade kits on older C-130s was to run through 2017. Congress through this year has approved $1.7 billion for the program, and Boeing is producing the first 22 kits. Boeing has modified and completed test flights of three aircraft, spokeswoman Jennifer Hogan said. She said the company has not been notified of the proposed termination and the program “is production-ready.” The C-130 upgrade program has seen cost growth that pushed it to $5.8 billion from $4.1 billion. The Air Force “probably sees” canceling the C-130 program as “an easy target” because of increased J-model production, pressure on defense spending and the program’s cost growth, said Richard Aboulafia, a military aircraft analyst with Fairfax, Virginia-based Teal Group. Still, “with an aging and overtaxed” C-130 fleet, the Air Force “still needs to create and fund a life-extension program of some kind,” Aboulafia said.