Boeing Co. and its contractors across the county are bracing for potential cuts to one of their biggest government contracts here.
Defense Secretary Robert Gates has proposed dropping an $87 billion ground vehicle program that’s part of Boeing’s locally based Future Combat Systems program. He could recommend more cuts to the program.
Future Combat Systems is the Army’s $160 billion program,started in 2003 in Huntington Beach,to enhance battlefield intelligence with robotic sensors and combat vehicles.
Boeing works with about 50 Orange County suppliers on the program, including Huntington Beach-based System of Systems Integration Laboratory, which handles modeling and simulation, computers and software and testing.
The program is set to run through 2015.
San Diego-based SAIC Inc., which has offices in Fountain Valley and Huntington Beach, is a lead contractor for the program.
In California, Future Combat Systems counts 200 suppliers and 24,000 jobs for a $1.1 billion economic impact, according to Boeing.
Nationwide, the program is responsible for 91,000 jobs in 43 states, contributing $4.5 billion to the economy.
Chicago-based Boeing, the county’s fourth largest employer with about 8,000 positions, was reluctant to estimate how many jobs might be affected if the funding is pulled.
Boeing said it would be taking part in talks about the program before Congress votes on the budget cuts.
“We will be studying Secretary Gates’ announcement for potential impact,” the company said in a release.
Gates criticized Future Combat Systems’ ground vehicles, saying they were too lightweight and high off the ground to deal with roadside bombs well, he said. He encouraged opening up bids for contracts to develop a more effective vehicle.
Other components of the Future Combat Systems program that rely on sensors for surveillance, reconnaissance and communications for unmanned planes and robotic fighter planes are set to remain intact.
Gates is expected to submit final details of his proposed 2010 budget to the White House before it sends a budget proposal to Congress early next month.
Industry analysts have speculated that Gates has a strong chance of getting his proposed budget approved by Congress.
A rising government deficit has many politicians angling to reduce military spending, especially for programs not tied directly to the wars in Iraq and Afghanistan.
Boeing already has been planning for a flattening of the defense budget and said it would offer less expensive weapons created from existing technology to meet budget constraints.
Boeing also may receive a termination fee from the government if the Future Combat Systems program is trimmed.
“It is still early in this process and it would be inappropriate to speculate about what might happen,” a Boeing spokesman said.
Opposition
Lobbyists are expected to put up a fight for the program, with Army chief of staff Gen. George W. Casey Jr. as well as a number of politicians leading the opposition.
Sen. James M. Inhofe, R-Okla., has spoken out against potential cuts that might affect his state.
“Without it, we risk sending our sons and daughters into combat in vehicles that are second-rate and are less survivable and effective in combat,” he said.
Other programs facing budget cut threats include Bethesda, Md.-based Lockheed Martin Corp.’s F-22 Raptor fighter jet, with promises that four more would be ordered before scrapping the program, and the Navy’s DDG 1000 destroyer program, which is being worked on by a handful of contractors.
Gates still plans to spend a record $534 billion in 2009 on defense, earmarking money for research and development of unmanned planes, special forces and cyber warfare.
The budget cuts aren’t the first blow to Boeing this past year.
The company recorded nearly 1,900 local job losses as it shed 19% of its workforce last year.
Its losses stemmed from a regular fluctuation of contracts, retirement and layoffs at its struggling space satellite business in Seal Beach.
It also took a hit when it lost a $35 billion contract to build a refueling tanker for the military to Los Angeles-based Northrop Grumman Corp.
Now the contract is up in the air and may still go to Boeing, due to protests.
Other key Boeing programs based in Huntington Beach include C3 Networks, which integrates communications software for the military, and the Joint Tactical Radio System program, which works on enhancing the military’s radios with data and video feeds.
