Army to end Raytheon-Lockheed $1 billion-plus arms program

By Jim Wolf

WASHINGTON (BestGrowthStock) – The U.S. Army has recommended ending a joint Raytheon Co — Lockheed Martin Corp precision-attack missile program that has cost some $1 billion so far, a prominent industry consultant said Friday.

The plan to kill the so-called Line-of-Sight-Launch System must be cleared by Ashton Carter, the under secretary of defense for acquisition, who typically concurs with such a recommendation from an armed service.

Army leaders based their recommendation on “test performance, cost and doubts about the system’s relevance to future warfighting,” said Loren Thompson, an analyst close to the industry and the Pentagon.

Cancellation was “nearly a foregone conclusion,” he said. Army Vice Chief of Staff Gen. Peter Chiarelli made the decision Thursday, supported by the Army’s top acquisition panel, Thompson added.

The Army was working on a statement about the program and has no immediate comment, said Dave Foster, an Army spokesman.

The Navy also had been planning to put NLOS-LS on its shallow-water Littoral Combat Ship to deal with such threats as swarms of small attack boats.

Raytheon, in a revised statement, called the reported plan to kill the program “disappointing.” It is 90 percent through its six-year development phase, said John Patterson, a company spokesman.

Earlier in the day, Patterson had said Raytheon was disappointed by what he then thought had been an Army announcement of a cancellation.

“We stand ready to continue development of this important capability,” he said in the revised statement.

Lockheed Martin has not been notified of any termination, said Heather Kelly, a company spokeswoman.

Pentagon officials had detailed the system’s shortcomings to lawmakers earlier this month.

The “demonstrated” missile reliability is 61 percent, below the 85 percent requirement, David Duma, the Defense Department’s principal deputy director for operational test and evaluation, told the Senate Armed Services AirLand subcommittee on April 15. He cited the first operational flight tests of the system, carried out in January and February.

Netfires LLC, a joint venture of Raytheon and Lockheed, was awarded a $1.1 billion Army contract to develop and demonstrate the family of weapons in March 2004. It was to have been the first part of the Army’s Future Combat Systems modernization.

Defense Secretary Robert Gates canceled that program’s eight ground vehicles last year on grounds they were ill-suited to roadside bombs that have taken a heavy toll on allied forces in Iraq and Afghanistan.

The NLOS-LS system comprises the container launch unit and a precision attack missile. Lockheed Martin is responsible for the container launch unit.

The potential value of the system was not immediately available, according to representatives of Lockheed, Raytheon and the Army.

In afternoon New York Stock Exchange trading, Raytheon shares were off 8 cents to $59.46 and Lockheed shares were off 35 cents to $86.32.

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(Reporting by Jim Wolf; editing by Lisa Von Ahn, Gerald E. McCormick and Andre Grenon)

Army to end Raytheon-Lockheed $1 billion-plus arms program