Lockheed to Lose 17 F-35s Under Automatic Pentagon Cuts
The Pentagon will cut 17 of the 343 F-35 fighters it planned to buy from Lockheed Martin Corp. in fiscal 2016 through 2019 unless Congress repeals automatic budget cuts, according to a new Defense Department report.
The move would save about $1.7 billion from $45.5 billion in planned spending for the F-35, the costliest U.S. weapons program. The report spells out an array of cuts in other projected purchases, from air-to-air missiles made by Raytheon Co. (RTN) to aerial refueling tankers from Boeing Co. (BA)
The report obtained by Bloomberg News, “Estimated Impacts of Sequestration-Level Funding,” provides the Pentagon’s most detailed breakdown yet on the impact of the cuts. Defense Secretary Chuck Hagel and the military service chiefs have been pressing Congress to avert the process called sequestration, which is scheduled to take full effect again in fiscal 2016 after two years of temporary relief.
“Reviewing these cuts illustrates the additional war-fighting risk that the department will incur” if “automatic reductions persist,” according to the 37-page report.
Cuts in federal spending on defense and domestic programs were embedded in a 2011 agreement to lift the federal debt limit. The report says the Defense Department will have to absorb $115 billion in additional reductions through fiscal 2019 if sequestration stays in effect, including $35.3 billion in fiscal 2016.
The cuts in F-35 funding would pare 15 planes from the Air Force’s version and two from the Navy’s.
Still, the document shows that Pentagon officials are standing by pledges to do what they can to protect the $391.2 billion F-35 program from Bethesda, Maryland-based Lockheed, which involves eight other nations.
Marines’ F-35 Spared
Planned funding of $11.1 billion for the fighter’s Marine Corps version -- the B model designed for short takeoffs and vertical landings -- would be preserved, with none of 69 aircraft cut, according to the Pentagon report. The U.K. and Italy are also purchasing the B model.
That’s good news for Hartford, Connecticut-based United Technologies Corp.’s (UTX) Pratt & Whitney unit and Rolls-Royce Holdings Plc (RR/), based in London, which make the Marine version’s more complex propulsion system.
The Pentagon’s anticipated five-year, $550 billion budget for weapons purchases would be cut by $48.3 billion. Its $337 billion research plan would be reduced by $18 billion.
The $1 trillion operations and maintenance account, which funds military readiness, would decline by $40 billion.
The new document, which was initiated by the Pentagon and not requested by Congress, offers projections that contractors, local governments and unions can use as ammunition in pressing lawmakers for the repeal of sequestration. The report may be issued this week.
The risk is that some members of Congress may view the litany of cuts as exaggerated in light of past warnings. Frank Kendall, the Defense Department’s top weapons buyer, said in February that “we cried wolf about this a lot” before fiscal 2013, when what resulted was “sort of the death of a 1,000 cuts,” none of them having a huge impact, according to an account by Defense One.
Sequestration would eliminate more than $1.3 billion through 2019 for the Air Force to start an “adaptive engine” technology demonstration program, according to the report.
The program is of interest to General Electric Co.’s aviation unit in Whippany, New Jersey, and Pratt & Whitney’s military engines unit as potential recipients of the funds.
The Sikorsky Aircraft unit of United Technologies would see a delay of several years in the start of the new Combat Rescue Helicopter program.
The Air Force intends to award the contract in June. Sequestration would cut $957 million of the $1 billion the service planned to spend through 2019 on the contract.
Sikorsky also would lose 61 UH-60 Black Hawk helicopters of 410 planned through 2019, as the Army would cut $1.24 billion of a planned $7.2 billion.
Waltham, Massachusetts-based Raytheon would make 1,737 Amraam air-to-air missiles at its Tucson, Arizona, facility, down from the planned 2,268. Pentagon spending on the missile would drop to $2 billion from $3 billion.
The report outlines impacts for several of Boeing’s highest-profile munitions and aircraft programs.
Quantities of tail kits made by the Chicago-based company at its St. Charles, Missouri, facility to convert unguided bombs into GPS-guided Joint Direct Attack Munitions would drop to 24,263 from a planned 41,358, as $327 million would be cut.
Boeing also would lose five KC-46 refueling tankers through 2019. The Air Force would buy 64 aircraft instead of 69, as $1.1 billion would be cut in what is now a $14.8 billion five-year development and procurement plan.
Planned orders for refurbished AH-64 Apache attack helicopters would drop by 67 to 192 as the Army cuts $1.2 billion from a $5.6 billion five-year plan. Boeing manufactures Apaches at its Mesa, Arizona, facility.
Quantities of Boeing’s new P-8 naval reconnaissance aircraft, which is assisting in the search for the missing Malaysian Air flight, would be cut to 50 from 56 as the Navy trims $1 billion from its $12.2 billion five-year plan.
Navy ship construction that affects contractors and workers from Rhode Island, Connecticut, Maine, Virginia, Alabama and Mississippi, Louisiana and California, would be reduced to $61 billion from a planned $69 billion under sequestration. That would mean a loss of eight vessels from a planned 44.
Three of 10 planned DDG-51 Arleigh Burke destroyers and $3.1 billion of $16 billion in spending would be lost to General Dynamics Corp. and Huntington Ingalls Industries Inc. (HII)
One Virginia-class submarine, also made jointly by the two companies, would be reduced through 2016. The Navy would buy nine instead of 10, saving $1.2 billion.
Huntington Ingalls, based in Newport News, Virginia, also would see a reduction of $977 million in funding for the Gerald R. Ford-class aircraft carrier program, as funding is reduced to $10.2 billion.
Delivery of the second carrier in the class, the John K. Kennedy, would be delayed to 2024 from 2022.
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