Another^ article, same topic. 110+ comments.
Posted on 02/23/2004 1:01:46 PM PST by Ronzo
WASHINGTON (Reuters) - The Defense Department is scrapping the $38 billion RAH-66 Comanche helicopter program being developed by Boeing Co. and United Technologies Corp., government sources said on Monday.
The Pentagon plans to announce the decision on the armed reconnaissance and light attack helicopter, which has been in development for about two decades, at a news conference at 4:30 p.m., the sources said.
The Pentagon has already spent about $8 billion on the project and had planned to spend $30 billion more. The cancellation, which could mean jobs cuts at Boeing and United Tech's Sikorsky Aircraft unit, follows the scrapping of another long-range firepower Army weapons system, the Crusader artillery gun, in 2002.
Shares of United Technologies were down 3 percent in afternoon trading, while Boeing shares slipped 1.5 percent.
A senior defense official, who asked not to be named, cited cost considerations in the decision.
"It's a very expensive program," the official said. "You're looking at a finite amount of resources and what is the best place to use those resources. One of the analyzes we had was that Comanche is an area where we can save money and not take on significant additional risk."
Initial production of the Comanche was slated to begin in 2006. Each helicopter could have cost as much as $60 million. As more requirements pushed the weight and the cost of the twin-engine aircraft higher, the Army slashed its order to about 650 craft, from an early plan for as many as 5,000.
"Its mission was to scout the field and to attack, but we're scouting with UAVs (unmanned aerial vehicles) and we've got lots of other ways to shoot at tanks now," said John Pike director of the defense research group GlobalSecurity.org.
The Comanche was meant to replace OH-58 Kiowa and AH-1 Cobra helicopters, and assist AH-64 Apache attack helicopters in locating targets. The Comanche had been due to enter full production in 2009.
"It's a nice helicopter, but there is the question of whether it is better to upgrade the platforms we have or build new ones," said James Lewis, an analyst with the Center for Strategic and International Studies think tank. "And if you're in a tight budget, you want to look at upgrades."
U.S. lawmakers -- especially those from Connecticut, where Sikorsky was to assemble the craft -- are expected to ask tough questions about the cancellation of the project, especially after President Bush's fiscal 2005 budget included $1.2 billion for the Comanche, congressional sources said.
But massive federal budget deficits will likely convince most lawmakers to support the Pentagon's decision, they said.
Scrapping the program could result in termination fees of $2 billion to $4 billion being paid to Boeing and Sikorsky, the government sources said.
Matt Broder, a spokesman for Sikorsky, in response to a request for comment, said, "Our company's policy is not to respond to rumors. As far as we are concerned, the program is fully funded and on schedule."
Boeing officials said the Chicago-based company had not been informed of any program cancellation. "The Comanche program is on track and schedule. We have not been notified about any change in the program status," said Boeing spokesman John Morrocco.
STOCKS LOWER
Cancellation would be bad news for Connecticut-based Sikorsky, analysts said. United Technologies stock fell $3.02 to $93.60.
"For Sikorsky, it's a big blow," said Richard Aboulafia, an aerospace analyst at the Virginia-based Teal Group. "It could hurt their anticipated future revenue stream and puts them in a weakened negotiating position if there's ever any kind of industry restructuring."
Boeing, on the other hand, could benefit because the company builds the Army's Apache helicopter, Aboulafia said.
"Boeing has a great fall-back position because if the Army doesn't get Comanches, they'll fully fund Apaches," he said.
Other analysts were less optimistic. Wachovia Securities said the loss of the Comanche program could cost Boeing about $400 million in revenue in both 2004 and 2005.
Boeing shares were down 72 cents at $43.62.
Ronzo -- I humbly submit that you watch your punctuation and not precede all "s" characters with an apostrophe. To place my comment in context:
"The Army will not be ordering 650 Apaches ..." (plural)
"The Apache's electronic warfare system ..." (possessive)
Dave Barry once wrote a hilarious article in which he described the new meaning of an apostrophe: "Warning -- S coming."
In development for 20 years!!! Time to cut the cord...
3:1 ratio
Comanche in it's mature form (circa 2015) would have had the capabilty to detect, identify, prioritize and process targets, both autonomously and remotely between other combat air/ground systems. It was touted in the nineties as the Army's "quarterback" and was a good analogy at the time. However, rapidly moving technological advances with other systems, changing warfighting doctrine and the advent of the UAV explosion has all but put it out to pasture.
how does this capability compare with that of the Longbow '64s?
Longbow already has some of these functions and is much more survivable as an airframe. It wouldn't take much to upgrade (and is, in fact in the process of being done to an extent) to what Comanche was supposed to offer.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.