US Navy halts funding for Raytheon weapons program

WASHINGTON, March 24 (Reuters) - The U.S. Navy said on Monday it was canceling funding for a Raytheon Co (RTN.N) program to develop a long-range satellite-guided naval weapon after 12 years of work and a series of recent test failures.

The Navy says it has spent about $350 million on the Extended-Range Guided Munition, a high-tech projectile designed to be fired from Navy destroyers up to 50 miles offshore, since it launched the program in 1996.

After years of problems, the time had come to move in a different direction, officials said. "We were not seeing the return on the investment that we had hoped to see," said Navy spokeswoman Patricia Dolan.

She said a number of factors resulted in the decision, including the length of time spent on the program, recent test failures and the fact that Raytheon had used up all the funding earmarked for the program.

Officials decided to scrap further work on the program after the guidance system, the rocket motor, and tail fins all flunked demonstration tests at White Sands Missile Range in New Mexico in February, according to a report in the Boston Globe.

The Navy said it had sent Raytheon's missile systems unit in Tucson, Arizona a letter notifying them that it did not plan to provide "any additional funding" for the program.

The Navy said it still had a requirement for an extended range weapon, but would now launch an analysis of alternatives to examine other possible ways to upgrade current sea-based support for ground troops.

The weapon that Raytheon had been developing was a projectile guided by Global Positioning System satellites. Among the weapon's problems was damage to the satellite guidance system after the projectile was shot from a shipboard gun.

No immediate comment was immediately available from Raytheon.

The Navy awarded the original contract for the weapon in 1996 to Texas Instruments, a year before Raytheon acquired the company's defense electronics component and the contract. (Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn)