January 4, 2011 / 3:37 AM / 7 years ago

UPDATE 1-U.S. to detail $100 bln in Pentagon savings, cuts-sources

* General Dynamics amphibious program likely to be cut

* Raytheon’s ground-launched missile also in cross-hairs

* Lockheed fighter program facing restructuring (adds analyst comments, byline)

By Andrea Shalal-Esa

WASHINGTON, Jan 3 (Reuters) - U.S. Defense Secretary Robert Gates is expected to announce as early as Thursday about $100 billion in savings for the Pentagon and cuts to some weapons programs, sources said on Monday.

The announcement will detail a plan that military services have been hammering out for months. The Pentagon is under increasing pressure to cut its budget given huge federal deficits and a reduction of troops in Iraq.

One weapons program expected to end is the Expeditionary Fighting Vehicle, a 40-ton amphibious landing craft that General Dynamics Corp is developing for the Marine Corps, said two sources, who were not authorized to speak on the record.

Gates is also likely to cancel a ground-launched missile system being developed by Raytheon Co , said defense analyst Loren Thompson, chief operating officer of the Virginia-based Lexington Institute.

“Secretary Gates must prove he is running a tight ship because the federal government is running a huge budget deficit,” Thompson said.

Pentagon spokesman Colonel David Lapan declined comment on whether Gates would make the announcement this week, saying only that Gates would announce his decisions on efficiencies at an appropriate time.

The Pentagon’s largest weapons program, the Lockheed Martin Corp F-35 Joint Strike Fighter, is facing another restructuring that could extend the program’s development phase by up to two years, said a third source familiar with the plans.

The program was already restructured last year, adding 13 months to the development phase.

Lockheed said it would be premature to comment on changes, but said the F-35 program had made progress over the past year and that the 10th F-35 entered flight test on Dec. 30.

Thompson said Gates would package his weapons decisions as moves aimed at eliminating programs that were either not needed or being poorly managed, adding, “It’s getting harder and harder to find programs that match those descriptions.”

One industry source said the Pentagon had already spent $3.3 billion developing the EFV amphibious vehicle and could see 200 of the vehicles built for $3.6 billion more -- less than the $8.2 billion required to build the 573 vehicles currently included in the budget.

The White House has said it would release its proposed budget for fiscal year 2012 during the week of Feb. 14.

Marine Corps General James Cartwright told investors in December that the U.S. defense budget would likely decline in coming years. [ID:nN02227349]

Defense News, a trade publication, reported in December that the White House Office of Management and Budget had ordered the Pentagon to cut its budget by $90 billion over the next five years, beginning with a $12 billion cut in fiscal 2012.

The Pentagon’s fiscal 2011 budget plan had called for a spending of $549 billion in 2011, growing to $566 billion in 2012, excluding war spending. (Additional reporting by Phil Stewart; Editing by Sofina Mirza-Reid and Lincoln Feast)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below