May 27, 2009 / 7:34 PM / 10 years ago

ANALYSIS-Pentagon push for vehicle program menaces another

By Andrea Shalal-Esa

WASHINGTON, May 26 (Reuters) - The Pentagon’s push to develop a $2 billion-plus fleet of armored off-road vehicles for Afghanistan may put pressure on another multibillion dollar competition to replace tens of thousands of military Humvees.

The Joint Light Tactical Vehicle or JLTV program has so far escaped Defense Secretary Robert Gates’ sweeping cuts, but analysts and industry executives say the Pentagon is certain to carefully reassess — and possibly scale back — the program when it reviews plans for other ground vehicles this summer.

Gates last month canceled the $87 billion manned ground vehicle portion of the Army’s Future Combat Systems (FCS) modernization program, saying it had been developed without taking into accounts lessons learned in Iraq and Afghanistan.

Gates, a big fan of the Mine Resistant Ambush Protected, or MRAP, vehicle program, was concerned about the lack of a V-shaped hull on manned ground vehicles that were being designed by BAE Systems Plc (BAES.L) and General Dynamics Corp(GD.N) as part of the FCS program run by Boeing Co (BA.N) and Science Applications International Corp [SAICI.UL].

Analysts and executives are beginning to suspect the JLTV program may face a similar fate, given rapid movement forward on a lighter version of MRAP trucks built to protect troops against roadside bombs in Iraq.

Lockheed Martin Corp (LMT.N), General Dynamics Corp (GD.N) and BAE Systems are competing for what could be $40 billion of work to replace the workhorse High Mobility, Multi-Wheeled Vehicles, or Humvees, used by U.S. forces in Iraq and elsewhere.

The Pentagon wants a vehicle that is more maneuverable and better protected against roadside bombs than the Humvee, which entered service in 1985. It plans to buy 60,000 JLTV vehicles for the Army, Marine Corps and special operations forces.

But the Marine Corps has already raised concerns about the increasing weight of the vehicles and their rising cost — another big red flag for Gates.

“It’s an absolute certainty that the JLTV program is going to be carefully scrutinized,” said Virginia-based defense consultant Jim McAleese, citing Gates’ focus on affordability and rapid fielding of weapons for wars being fought today.

He said lawmakers’ addition of billions of dollars of extra funding for MRAPs to the fiscal 2009 war spending budget, and signs that the Army could use them for its infantry brigades, could eclipse JLTV, which is not due to be fielded until 2015.

“We’re keeping a close eye on it. This program could be in serious jeopardy,” agreed one industry executive, who asked not to be named because the competition was still underway.

“MRAP has taken on a life of its own, independent of the original requirements,” said John Pike, defense analyst for globalsecurity.org. “MRAP is a hot production line, it’s a going concern and it’s half a dozen companies, which means you’ve got a lot of congressional interest. Some of these other programs, like JLTV, are just requirements at this stage.”

He said Gates was recently proven to be more supportive of programs that delivered early results to the battlefield — another factor that could give the MRAP program a boost.

The U.S. Defense Department plans to award a contract around the end of June to just one of four companies bidding to build up to 2,080 lighter, more maneuverable MRAP vehicles.

BAE Systems, Oshkosh Corp (OSK.N), Navistar International Corp (NAV.N) and Force Dynamics LLC, a joint venture between Force Protection Inc (FRPT.O) and General Dynamics, are competing to build the MRAP All Terrain Vehicle.

The number of MRAPs to be ordered could eventually double, given the U.S. military buildup in Afghanistan, said McAleese.

Gates has repeatedly highlighted the rapid development and fielding of thousands of MRAPs, which feature a V-shaped hull, and their importance in protecting troops from roadside bombs. Dean Lockwood, analyst with Forecast International, said for now, the Pentagon was proceeding with both the MRAP-ATV and JLTV programs, but some of the design work on MRAP-ATV could be transferred to JLTV to save time and money.

He also predicted that the JLTV program could be scaled back, given the growing cost and weight of the developmental vehicles, with the Army and Marine Corps opting instead to continue buying Humvees for less dangerous missions.

“They need something for the long term,” Lockwood said. “But on the other hand, when do you reach the point where you’ve hit good enough?”

James Hasik, a Texas-based defense consultant, said he would not be at all surprised if the JLTV program were cut back or even eliminated, given the Pentagon’s success with shorter-cycle programs like MRAP in recent years.

Given the size of the program and cost increases already making themselves apparent, “it’s a gigantic target,” he said.

Hasik said current efforts to add independent suspensions to the existing MRAPs, and development of the ATV version, could also dampen demand for the JLTV program.

(Reporting by Andrea Shalal-Esa, editing by Gerald E. McCormick) Keywords: ARMY/VEHICLES

((andrea.shalal-esa@thomsonreuters.com; + 1 202 354 5807; Reuters Messaging: andrea.shalal-esa.reuters.com@reuters.net))

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