Army focused on cutting costs, not troops

WASHINGTON Mon Oct 25, 2010 6:21pm EDT

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WASHINGTON (Reuters) - Top Army officials on Monday said they had met Pentagon cost-cutting targets that should allow them to avoid cuts in troop levels and avert a return to the short times between war deployments that have been blamed for rising suicide rates.

The Army has met its goal of trimming overhead and low-priority programs by $28 billion over the next five years, Chief of Staff General George Casey told reporters at the annual Association of the U.S. Army conference.

Casey said the Army was now in negotiations with top Pentagon leaders about the cost-cutting proposals, but did not provide specifics on the trims.

Defense Secretary Robert Gates has told the services to find a total of $100 billion in savings over the next five years to ensure that the overall U.S. defense budget can continue to grow by one percent after inflation.

U.S. defense companies, including Boeing Co, Lockheed Martin Corp, General Dynamics Corp and Raytheon Co, are watching closely for news of any program cancellations that result from the cost-cutting drive.

Casey and Army Secretary John McHugh did not comment on reports that the Army plans to terminate the Surface-Launched Advanced Medium-Range Air-to-Air Missile being developed by Raytheon, and the multinational MEADS missile defense program, but emphasized their top priority was to safeguard current force levels.

Both men said they were keenly aware of the strains that two wars in Iraq and Afghanistan had put on soldiers, and said they would not cut programs aimed at slowing an alarming rate of suicides among troops, and helping soldiers deal with injuries or post-traumatic stress disorder.

"For us the most important thing is we get through the next several years without having to cut force structure," Casey told reporters. "So far we've been able to meet the reductions without having to do that."

Casey said soldiers sent to the battlefield today would be able to stay at home for 18 to 24 months before their next deployment, compared with just 12 to 15 months in recent years.

TOUGH CHOICES AHEAD ON ARMED HELICOPTER

Army aviation officials were confident about funding for their programs at the moment, but said they would face difficult choices in coming months, including whether to revive an armed helicopter program canceled two years ago.

Brigadier General Tim Crosby, who heads the Army's program executive office for aviation, said he should be briefed soon on an analysis of various alternatives for the program, but it was not yet clear that the Army would mount a new competition.

"Budgets are going to be tight," Crosby told Reuters.

Companies hoping to compete for that order are Sikorsky Aircraft, a unit of United Technologies Corp, Europe's EADS, which is teamed with Lockheed, and Boeing.

But the Army is also exploring a possible new multi-role helicopter, a program that could take even longer to kick off.

Companies exhibiting at the trade show, attended by about 35,000 Army and industry officials, said they were looking more at upgrades for existing weapons than new developments.

ITT Corp, for instance, has spent millions of its own dollars to develop a new high power alternator, which provides an output of 1,000 amps at high idle for Mine Resistant Ambush-Protected (MRAP) vehicles, more than three times the power delivery of current alternators.

ITT says the new equipment would give the vehicles more power to run critical equipment like jammers to guard against roadside bombs, radios, weapons and communications, and sees a possible market worth $150 million.

Textron, for its part, is hoping that a new secure but inexpensive system that allows the Army to push video images from unmanned planes to individual troops using off-the-shelf cell phones will draw interest from senior officials in the current tight budget environment.

"For not a lot of money, and very quickly, we can greatly improve their capability in the field," said Fred Strader, president and chief executive officer of Textron Systems.

(Reporting by Andrea Shalal-Esa; Editing by Gary Hill)

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