September 21, 2021

Military Contractors Brace for Cutbacks

As the Pentagon Thursday announced changes in its programs, military contractors were bracing for cancellations or cutbacks of several programs.

In its latest round of budget tightening, the agency has said that it would stretch out purchases, cancel a high-flying spy drone and delay work on a new missile submarine.

The defense secretary, Leon E. Panetta, disclosed the cuts as part of a broader reorganization of the military meant to save $487 billion over a decade.

One of the biggest decisions will stretch out the purchase of 179 of the F-35 fighters that the Pentagon had planned to buy from Lockheed Martin over the next five years.

Mr. Panetta said the Pentagon remained committed to the plane, a stealth fighter that can attack ground targets. Different versions are being built for the Air Force, the Navy and the Marines. The services plan to spend up to $380 billion for 2,440 of the planes, making it by far the Pentagon’s largest program.

The other cuts were spread out among the major military contractors, though some reductions would be offset by spending increases on computer security, other unmanned planes and equipment for the special forces.

The plan to cut the size of the ground forces by 92,000 and eliminate older ships and planes came in response to political pressure to lower the federal budget deficit. It will eliminate most of spending increases that were above inflation, thereby limiting the Pentagon’s budget increases to approximately the rate of inflation after a big surge during the Iraq and Afghanistan wars.

Pentagon officials said that they had tried to limit the reductions to weapons programs and would focus on continuing efforts to modernize the armed forces. Many of the most costly and contentious programs — like the radar-evading F-22 fighter and a high-tech destroyer — had already been canceled or trimmed over the last three years, leaving few big-ticket items.

Mr. Panetta said he had decided to slow the purchases of the F-35 fighters “to complete more testing and allow for developmental changes before buying significant quantities.”

“We wanted to make sure before we go into full production that we are ready,” he said.

The plane was originally described as an affordable and dependable design. But changes in the requirements, faulty parts and software difficulties caused several years of delay and turned the program into the Pentagon’s biggest budget-buster.

Last year, Mr. Panetta’s predecessor, Robert M. Gates, threatened to cancel the Marine version of the plane, which can take off and land almost vertically, if Lockheed could not solve some of the problems. Mr. Panetta recently lifted that probation, saying the company had made substantial progress.

Pentagon officials also announced that the Air Force was canceling one version of Northrop Grumman’s Global Hawk surveillance drone. It flies at 60,000 feet and was intended to replace the piloted U-2 spy plane, which gained fame for flying over the Soviet Union during the cold war.

After an extensive review, the Air Force had decided last July to go ahead with the switch even though the Global Hawk’s costs had soared and Pentagon testing officials had questioned whether it was reliable.

The Air Force had said then that the unmanned plane, which took photographs and was also supposed to intercept communications, would be cheaper to operate than the U-2. But Pentagon officials said Thursday that it now looked as if the costs would be higher over the next five years for the Global Hawk than the U-2.

They said they still planned to build other versions of the drone that could survey large areas, though those costs could rise if fewer total planes are built.

Mr. Panetta said the Navy would delay its long-range plans to build a new nuclear-powered missile submarine by two years to ease the current budget pressures and help start the program on a more solid footing.

Pentagon officials have said that the new missile submarines would eventually replace the aging Ohio-class subs, which carry nuclear missiles and could cost $5 billion each. Pentagon officials said they also would delay construction of one Virginia-class attack submarine, two coastal combat ships and a large amphibious ship to reduce short-term costs.

Most of the ship construction is done by General Dynamics and Huntington Ingalls Industries, which was spun off by Northrop Grumman last year. Lockheed and a unit of an Australian company build the coastal ships.

Still, the Pentagon said it also planned to redesign the Virginia-class subs, which are smaller than the Ohio-class subs and protect other warships, to carry more cruise missiles and upgrade radars on both airplanes and ships. It will also design a new long-range bomber to replace the B-2.

Military contractors have laid off workers and consolidated plants in recognition that the boom times were ending. But Mr. Panetta said some of the cuts would be offset by increased spending on special forces, other surveillance planes and protections against attacks by computer hackers.

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