The fate of a major missile-development program involving Tucson-based Raytheon Missile Systems looks uncertain at best, after the program was recently placed on the budget equivalent of life-support.
The proposed cut to the Joint Air-to-Ground Missile (JAGM) program is the deepest Raytheon faces in the Pentagon's proposed $525 billion base budget for fiscal 2013, which trims spending across a wide range of programs.
The proposal comes as Raytheon, with partner Boeing, and Lockheed Martin are awaiting a Pentagon decision on who will complete engineering and manufacture the missile system, once expected to be worth some $5 billion over 20 years.
JAGM is designed to replace three air-to-ground missiles that first entered service in the 1970s - Lockheed's Hellfire; and the Maverick and an air-launched version of the TOW (Tube-launched, Optically tracked, Wire-guided, or Wireless) missile, both made by Raytheon.
People are also reading…
Amid reports that the program partners, the Army and Navy (on behalf of the Marine Corps), were poised to kill the program, JAGM limped into the delayed 2012 defense budget, getting $127 million of $245 million initially requested by the Pentagon.
In the 2013 budget, only $10 million is requested for JAGM development - a paltry amount for any program, a defense analyst said.
"It's not just on life support: It's at its own wake," said Loren Thompson, chief operating officer of the Lexington Institute.
"The amount of money left is so small. ... It's probably just a placeholder until the department decides what to do with the program," Thompson said, noting that joint programs often struggle because they are often foisted on one service.
Based on previously projected spending, the move saves some $300 million in the 2013 budget and $1.6 billion through 2017, the Pentagon said in its 2013 budget overview.
"The Army and Navy have deemed that it is a manageable risk to significantly reduce the investment in the JAGM program from FY 2013-FY 2017," the overview document states.
"The program retains minimal funding to determine if it is possible to integrate JAGM technology into U.S. government-owned missiles (guidance, warhead and motor)."
The Army was expected to pick a winner in the JAGM competition this spring. An Army spokesman said an update on the decision timetable wasn't immediately available.
Raytheon doesn't comment on budget proposals, but you can bet company officials were poring over the Obama budget request within minutes of its public release last week.
It's not entirely a zero-sum game for Raytheon, or for Lockheed for that matter. While the Pentagon decides what to do with JAGM, Raytheon and Lockheed will keep on making the missiles that JAGM is designed to replace.
Raytheon recently restarted production of laser-guide Mavericks in Tucson and has been working on improvements to the TOW, including a new airborne launcher. Lockheed is still producing advanced Hellfires at plants in Florida and Alabama.
Contact Assistant Business Editor David Wichner at dwichner@azstarnet.com or 5783-4181.