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Budget Talks Moot Program Cancellation for JAGM

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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Navy Continues LCS Production with Orders for Both Teams

Earlier this year the U.S. Navy had gone ahead and awarded contracts to the two builders of the Littoral Combat Ships (LCS) for up to ten ships of their designs. The LCS is a new small warship that will be the a largest class of ships built over the next few decades for the Navy.

Two teams one lead by Lockheed Martin (LMT) and the other by Austal America (ASB:AUS) are building the ships. Lockheed uses the Wisconsin based Marinette Marine as their shipbuilder and Austal utilizes their yard in Mobile, AL. Each team had orders for two but the new contracts increased that to up to 12.

Now the Navy is allocating funding for the ships under these contracts with Lockheed and Marinette receiving a contract for the second ship of their order of ten, LCS 7, which will be named the U.S.S. Detroit. The ships are expected to cost upwards of $400 million when completed but the contract is for about $375 million. The Navy had previously ordered LCS 5, the U.S.S. Milwaukee.

Austal has completed U.S.S. Independence (LCS 2) and is building the U.S.S. Coronado (LCS 4). They received an order for a further LCS at the same time Lockheed did which is worth about $368 million. This should be for LCS 8 but no name or number was given.

The subsidiary of the Australian maker of high speed ferries and other ships had earlier received a contract for engineering support worth about $20 million while Lockheed received one as well worth a little more.

The Navy had originally planned to use multiple sources for the LCS due to the need for the rapid construction of so many ships. This acquisition strategy went through some changes with at one point the Service planning a single source for the second batch after the delivery of the first four ships. Due to the competitive bids received from Lockheed and Austal the Navy asked Congress for permission to use two sources which was approved late last year. This led to the similar contracts for ten ships each.

The Navy has had plans to build upwards of fifty of the ships which while they have dissimilar hull designs carry the same basic payload of weapons and sensors. The ships will conduct a variety of missions including patrol, anti-submarine warfare and mine warfare.

Photo from uscgantareapa flickr photostream.

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GeoEye Selects Lockheed Martin to Build Next-Generation Commercial Remote Sensing Satellite System

GeoEye Selects Lockheed Martin to Build Next-Generation Commercial Remote Sensing Satellite System
March 11, 2010 1:59:00 PM

SUNNYVALE, Calif., -- Lockheed Martin Space Systems Company, a core business area of the Lockheed Martin Corporation (NYSE: LMT), announced today that it has been selected by GeoEye, Inc. (Nasdaq: GEOY) to build the company's next-generation, high-resolution Earth imaging satellite system known as GeoEye-2. Financial terms are not being disclosed at this time.

Lockheed Martin has begun start-up activities and procurement of long-lead components to support the earliest possible launch date for GeoEye-2. This effort will lead to a contract award for the design, engineering and manufacturing of the satellite and the associated command and control system.

Lockheed Martin Space Systems, a world leader in the most advanced space-based systems for government and commercial customers, designed and built the world's first commercial, high-resolution, Earth-imaging satellite, IKONOS, which has been providing 0.82-meter ground resolution imagery to GeoEye's customers around the globe for more than a decade.

These map-accurate images are used for applications in national security, environmental monitoring, state and local government, disaster assessment and relief, land management and for many other geospatial applications.

"GeoEye and Lockheed Martin have had a long and productive partnership since building and launching the first commercial remote sensing satellite," said Joanne Maguire, executive vice president, Lockheed Martin Space Systems. "Our GeoEye-2 solution will leverage our strong government and commercial satellite system expertise and focus on operational excellence and mission success to provide GeoEye with another world-class, high-performance spacecraft for its customers."

Matthew O'Connell, GeoEye's chief executive officer and president, said, "We look forward to working with Lockheed Martin again and eagerly anticipate the construction and successful launch of another cutting-edge satellite which will provide proven reliability and greatly enhanced imaging capabilities for our customers."

Lockheed Martin's GeoEye-2 solution will build on the company's deep heritage and ability to execute within cost and schedule in this mission area and offer increased agility, resolution and flexibility over IKONOS and GeoEye-1. This will enable the National Geospatial-Intelligence Agency (NGA) to provide critical geospatial situational awareness and global security information to intelligence analysts, war fighters and decision makers. Commercial users will also benefit from access to GeoEye-2's map-accurate color imagery. The spacecraft will feature a high-resolution ITT camera that has been in development for more than two years.

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