Budget Talks Moot Program Cancellation for JAGM

by: Matthew Potter
October 14, 2011

Category: Boeing, Business Line, Companies, Congress, Department of Defense, development program, Events, Federal Budget Process, Lockheed Martin, Military Aviation, production program, Proposal, Raytheon, Restructuring, Services, U.S. Air Force, U.S. Army, U.S. Marine Corps | RSS 2.0

The U.S. defense budget will decrease over the next several years. The current state of the overall Federal spending dictates that as the United States cannot afford to have $1 trillion plus deficits for ever. The “Super Committee” in Congress working on the debt crisis have either to come up with cuts or automatic ones will kick in with defense taking a big hit.

The 2013 – 2018 budget is currently being worked in the Pentagon and news is starting to come out of whole programs being targeted for cancellation. This is one of the easier ways to reduce spending. You may have to eat the development costs spent to date but the work done can be recovered and applied to a new program if one is ever started again but you save a great deal of money by not producing, integrating, fielding or sustaining a system. It seems the Army and Air Force are targeting their new tactical missile system called the Joint Air-to-Ground Missile (JAGM) designed to replace the current Hellfire and Maverick weapons.

Ending the program at its current state of about to enter Engineering, Manufacturing and Development and then production would save $5-6 billion over the next ten years.

The JAGM is the second attempt this century to replace the helicopter and air launched missiles currently used. The Hellfire especially fired from Army AH-64 Apache and Marine AH-1 Cobras has seen a great deal of use in Iraq and Afghanistan. Both it and the Maverick were developed originally back in the Eighties to attack Soviet tanks but have seen use in all of the U.S. combat actions since then. The original replacement program, Joint Common Missile, was itself cancelled back in 2006 timeframe due to cost and requirement issues. At that time Lockheed Martin (LMT) were the prime contractor for the system.

The JAGM has seen Lockheed and a team of Raytheon (RTN) and Boeing (BA) provide EMD proposals. The two missiles participated in a “fly off” where each company fired three systems in support of the EMD phase. The JAGM relies on a tri-mode seeker using laser homing, millimeter wave radar and infrared to engage targets in a variety of weather and terrain settings.

As the budget pressure ramps up there will be more discussions like this as the military services look at terminating modernization and investment programs to save bodies and current equipment. The U.S. will also have to spend tens of billions of dollars fixing and resetting equipment as it returns from Iraq and Afghanistan. This will make new programs a premium.

Every time a decision like this is floated there will be supporters in the military, industry and Congress who will try to save it. This is what will happen with JAGM as the 2013 budget goes forward to the Hill and is developed. There is no guarantee that just because the cut is proposed that it will be approved.

This is one of the first of many such battles to come over the next few years as the U.S. tries to “rightsize” its military and defense spending.

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