Boeing, Northrop Try to Defend Their Programs Against Possible Budget Cuts
Wednesday, March 25, 2009
Missile defense went on the offensive yesterday, as two major contractors set out to justify their costly programs in anticipation of budget cuts from the Pentagon.
It's a sharp turnaround from recent years of plenty for Boeing and Northrop Grumman, which have joined other big defense companies in benefiting from increased defense spending and the wars in Iraq and Afghanistan. But the Obama administration has promised new priorities in spending, spurring the companies to try to protect their major programs.
The Defense Department's nearly $60 billion missile defense systems have come under particular scrutiny because of cost overruns, schedule delays and questions about whether their technologies are proven. Industry officials said the White House has asked the Pentagon to cut about $2 billion from missile defense in its fiscal 2010 budget.
Among the missile defense programs being considered for cuts or scaling back are two run by Boeing and two by Northrop. Boeing is trying to defend its ground-based midcourse defense (GMD), a system of sensors and other equipment to stop long-range missiles, and a program to equip a modified 747 aircraft with a laser that can shoot down missiles soon after they're launched. Northrop is a subcontractor to Boeing on its airborne laser.
Northrop is trying to win support for its space-based surveillance and tracking system, which consists of satellites and other equipment that helps track, detect and intercept missiles, and its kinetic energy interceptor, another system that can help destroy medium- and long-range missiles.
Under the Bush administration, missile defense funding grew from $5 billion a year to $10 billion a year, according to defense analyst Travis Sharp. That is expected to change under Obama, who said on the campaign trail that he was not going to support paying for unproven technologies in missile defense.
Obama says he wants to reduce military spending by keeping closer tabs on the way contractors do business. He said at a news conference last night that he has targeted $40 billion in procurement savings, and that he'll continue to look for ways to reduce wasteful spending on multibillion-dollar weapons systems.
"Missile defense under Bush was an experiment in acquisition," said Clark Murdock, an analyst at the Center for Strategic and International Studies. Now, he said, "We got a system that can be deployed, but what no one really knows is how well these systems work." Murdock said many of the missile defense programs haven't been subjected to enough "realistic testing."
Northrop and Boeing held media briefings yesterday to tout their programs, about a week after missile defense spending began to become more of a focus for cuts to weapons systems. The General Accountability Office said in a report last week that the missile defense programs are $2 billion to $3 billion over budget. And on Monday, Marine Corps General James E. Cartwright, vice chairman of the Joint Chiefs of Staff, told attendees at an industry conference that the Pentagon was going to have to make "hard choices" about which weapons programs to fund. He said the focus on missile defense was shifting from developing and improving individual weapons toward creating programs that would give the military greater flexibility to deal with a variety of threats.
Northrop's executives played off Cartwright's wording yesterday in a morning briefing at the National Press Club. Executives said the company has about $6 billion in missile defense work under contract and flashed a slideshow of its missile defense systems. The bottom of one slide read, "Our nation needs mobile, global, flexible missile defense."
"We recognize that the missile defense budget is going to come down," said Larry J. Dodgen, sector vice president and deputy general manager for Northrop's missile defense division. "We think we have wise choices for the future."
Four Boeing executives defended that company's missile defense programs yesterday in a basement meeting room at the Willard Hotel on Pennsylvania Avenue, while serving guests cheese, crackers and cookies. Cutting its ground-based missile program could mean losing 55,000 "well-paying, clean industry" jobs in 36 states, according to Mira Ricardel, vice president of business development for Boeing's missile defense division.
Boeing gave out trinkets bearing the logo of its missile defense programs, including a box of mints, a bag of blue and white jelly beans and a magnetic dart board that reads "Right on Target" with a fireball explosion in the background.
The company's airborne laser program is eight years behind schedule and $4 billion over budget. Rep. Ellen O. Tauscher (D-Calif.), who chairs a House Armed Services subcommittee, said earlier this week that the program reminded her "of the definition of insanity."
"You keep doing the wrong thing over and over and don't learn from it," she said.
Mike Rinn -- vice president and program director of Boeing's airborne laser program -- acknowledged Tauscher's comments that the program is over budget and behind schedule. But he said the technology has matured in the past four to five years, adding: "If the definition of insanity is breakthrough technology, then call me crazy."