Kiplinger's focuses on six defense programs: Joint Strike Fighter, Maxx Pro (MRAPs), Littoral Combat Ship, missile engines, submarines and armored personnel carriers likely to be cut. Defense Systems in theBudget-Cut Crosshairs
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Defense Systems in theBudget-Cut Crosshairs

(U.S. Air Force photo/Senior Airman Julianne Showalter)

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With a renewed focus on cutting federal spending and reducing the deficit, even defense spending is on the chopping block in Washington.

Most of the proposed cuts -- about $15 billion in fiscal 2012 and billions more in coming years -- will be in the form of reduced spending on weapons systems and other parts of defense procurement.

Even with the cuts, the Pentagon's procurement budget for the fiscal year starting Oct. 1 will run about $95 billion – 56% more than it was 20 years ago.

Click on the navigation at right to see six systems or programs that are likely to be targeted, and the cities or regions where those cuts might be felt.

By Richard Sammon, Associate Editor, The Kiplinger Letter
February 2011
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Defense Systems in theBudget-Cut Crosshairs | Slide 2 of 7

Joint Strike Fighter

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Prime contractor: Lockheed Martin Corp.
Potential cut: $4 billion over the next three years
Where the work is done: San Diego, Atlanta, Houston

The next-generation combat fighter jet is intended to be a military mainstay for years to come, so the program won’t be gutted or suspended. It also has plenty of defenders in Congress and at the Pentagon, despite critics who say the JSF is better suited to Cold War military tactics and of limited use in dealing with emerging threats.
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Defense Systems in theBudget-Cut Crosshairs | Slide 3 of 7

International MaxxPro

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Prime contractor: Navistar Defense
Potential cut: $2.25 billion over five years
Where the work is done: San Diego

This is one of several mine-resistant armored vehicles (MRAPs) used in Iraq and elsewhere, and it’s a favorite of battlefield commanders. The savings would come by cutting orders from 5,000 vehicles to 3,500. Cuts of that magnitude would be fought by many in Congress, and would likely lead to sizeable job losses if implemented.
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Defense Systems in theBudget-Cut Crosshairs | Slide 4 of 7

Littoral Combat Ship

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Prime contractors: Lockheed Martin, Austal USA
Potential cut: $4 billion over 10 years
Where the work is done: Marinette, Wis., and Mobile, Ala.

This highly maneuverable coastal craft is eyed as a key component of the Navy of tomorrow. But major cost overruns and expensive redesigns have delayed building and delivery and left the craft vulnerable to cuts. Military experts suggest that a trim from $20 billion to $16 billion would not be out of line in this budget-conscious environment.
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Defense Systems in theBudget-Cut Crosshairs | Slide 5 of 7

M113 Armored Personnel Carrier

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Prime contractor: BAE Systems
Potential cut: About $30 million over five years
Where the work is done: Los Angeles, Houston

This light-armored carrier was a workhorse in Iraq (and yes, Vietnam), but with the winding down of operations there, many will be headed for storage. The savings would come from scaled-back production and would be relatively small. Each vehicle costs about $150,000, about a third of which pays for military electronics.
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Defense Systems in theBudget-Cut Crosshairs | Slide 6 of 7

Propulsion Systems

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Prime contractors: Thiokol, Raytheon Co.
Potential cut: About $40 million a year
Where the work is done: Boston, Los Angeles, Northern Virginia

The two companies combined are paid about $1.8 billion a year for rocket and missile programs, but only a fraction of that is for propulsion systems and research, so the overall savings would be small and symbolic. Other companies are doing similar work with the Defense Logistics Agency, so there is some overlap.
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Defense Systems in theBudget-Cut Crosshairs | Slide 7 of 7

Submarines

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Prime Contractor: General Dynamics
Potential cut: About $3.5 billion over 10 years
Where the work is done: London, Conn., Bath, Maine, other locations

Ballistic missile launchers and Virginia-class attack submarines will always have a role in the Navy, but they may have a lesser role in countering emerging threats. The savings would come mostly by delaying replacements for aging boats. In addition to affecting the bottom line for General Dynamics, the cuts impact dozens of subcontractors.
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