Team Infidel
Forum Spin Doctor
Wall Street Journal
November 13, 2008
Pg. B3
By August Cole
Boeing Co.'s top defense executive said he expects the Obama administration's incoming defense officials to take a hard look at some of the Pentagon's biggest weapons programs, as well as those that are troubled by cost overruns or delays.
Jim Albaugh, chief executive of Boeing's Integrated Defense Systems unit, said during a Merrill Lynch defense-industry conference in New York on Wednesday that "as a new administration comes in, they will come in and take a hard look at everything" being done by the Defense Department.
Pressure on the Pentagon budget is expected to increase, particularly as the new president grapples with demands for federal assistance from the banking and finance sectors. This is particularly worrisome for defense companies that depend on continued spending on big-ticket programs for new weapons that have yet to be fielded. "We've had a great ride here," Mr. Albaugh said.
This year, the Pentagon was expected to award more than $60 billion in contracts for new weapons systems, including aerial refueling tankers, search-and-rescue helicopters and communications satellites.
That plan fell apart after Boeing, United Technologies Corp. and Lockheed Martin Corp., successfully filed protests that forced officials to start over on the tanker and rescue-helicopter contracts. Rather than rush ahead, Defense Secretary Robert Gates decided to punt those decisions into the next presidential administration.
Regardless of whether Mr. Gates, who is under consideration by Mr. Obama to keep his post, remains in the job, those programs must be dealt with during the first part of 2009.
Before the election, Richard Danzig, a top Obama defense adviser, identified the Army's $160 billion Future Combat Systems contract, as well as efforts to develop a national missile-defense system, as areas that would get close scrutiny. Both of those are big programs for Boeing
Although most of Boeing's defense efforts remain focused on the Pentagon, the company is also pursuing work in the intelligence, homeland-security and international markets.
Last year, about a third of Boeing's defense revenue came from the Air Force, its biggest military customer and a service wracked by troubles awarding its biggest contracts.
Air Force officials are preparing options for the F-22 Raptor fighter, which is a Lockheed Martin Corp.-led contract that also involves Boeing, and the C-17 Globemaster, a Boeing-made military transport jet. Despite efforts to keep them going, both of those programs are nearing the end of production if the Pentagon stands by its decision not to buy more of them.
The Air Force just lost a battle with top Defense Department officials over funding for what could be the next batch of F-22 fighters. The Air Force wanted to spend $140 million toward 20 more jets, but Pentagon officials said instead that they will allocate $50 million for four jets, effectively buying time for the next administration to decide the program's fate.
"Our goal is to set the table" for the next administration, said Air Force Secretary Michael Donley during a presentation at the Center for Strategic and International Studies, a Washington think tank.
November 13, 2008
Pg. B3
By August Cole
Boeing Co.'s top defense executive said he expects the Obama administration's incoming defense officials to take a hard look at some of the Pentagon's biggest weapons programs, as well as those that are troubled by cost overruns or delays.
Jim Albaugh, chief executive of Boeing's Integrated Defense Systems unit, said during a Merrill Lynch defense-industry conference in New York on Wednesday that "as a new administration comes in, they will come in and take a hard look at everything" being done by the Defense Department.
Pressure on the Pentagon budget is expected to increase, particularly as the new president grapples with demands for federal assistance from the banking and finance sectors. This is particularly worrisome for defense companies that depend on continued spending on big-ticket programs for new weapons that have yet to be fielded. "We've had a great ride here," Mr. Albaugh said.
This year, the Pentagon was expected to award more than $60 billion in contracts for new weapons systems, including aerial refueling tankers, search-and-rescue helicopters and communications satellites.
That plan fell apart after Boeing, United Technologies Corp. and Lockheed Martin Corp., successfully filed protests that forced officials to start over on the tanker and rescue-helicopter contracts. Rather than rush ahead, Defense Secretary Robert Gates decided to punt those decisions into the next presidential administration.
Regardless of whether Mr. Gates, who is under consideration by Mr. Obama to keep his post, remains in the job, those programs must be dealt with during the first part of 2009.
Before the election, Richard Danzig, a top Obama defense adviser, identified the Army's $160 billion Future Combat Systems contract, as well as efforts to develop a national missile-defense system, as areas that would get close scrutiny. Both of those are big programs for Boeing
Although most of Boeing's defense efforts remain focused on the Pentagon, the company is also pursuing work in the intelligence, homeland-security and international markets.
Last year, about a third of Boeing's defense revenue came from the Air Force, its biggest military customer and a service wracked by troubles awarding its biggest contracts.
Air Force officials are preparing options for the F-22 Raptor fighter, which is a Lockheed Martin Corp.-led contract that also involves Boeing, and the C-17 Globemaster, a Boeing-made military transport jet. Despite efforts to keep them going, both of those programs are nearing the end of production if the Pentagon stands by its decision not to buy more of them.
The Air Force just lost a battle with top Defense Department officials over funding for what could be the next batch of F-22 fighters. The Air Force wanted to spend $140 million toward 20 more jets, but Pentagon officials said instead that they will allocate $50 million for four jets, effectively buying time for the next administration to decide the program's fate.
"Our goal is to set the table" for the next administration, said Air Force Secretary Michael Donley during a presentation at the Center for Strategic and International Studies, a Washington think tank.