Clipped wings

Arguably these should be the best of times for the defense industry in general, and for the manufacturers of military aircraft in particular.

The nation is engaged in a war against international terrorism where money is hardly an object. The first campaign in that struggle in Afghanistan highlighted the revolutionary military capability the United States has leveraged from its advantages in air power. A small group of U.S. Special Forces troops in Afghanistan used advanced technology to order precision strikes, routing Al Qaeda and the Taliban.

So why are U.S. defense industry officials and military service leaders so nervous?

Because a combination of factors has made significant cuts in aircraft programs and even cancellations a distinct possibility for first time in more than a decade. To drive that home, Defense Secretary Donald Rumsfeld ordered Pentagon planners in May to draft strategies for potential cuts to five of the military's most expensive weapons programs, including Lockheed Martin's F-22 fighter, Boeing-Textron's V-22 Osprey tilt-rotor transport and Boeing-United Technologies' Comanche helicopter.

While the conventional wisdom last year was that the military services and their congressional allies were poised to turn back major cuts to tactical aircraft programs, the war on terrorism has given Rumsfeld renewed clout, adding to his well-known determination to transform the military by focusing on leap-ahead technologies and eschewing some programs conceived during the Cold War. Anyone who didn't get that message was rudely awakened in May when Rumsfeld announced that he was killing the Army's $11 billion Crusader artillery system. And Rumsfeld has strongly indicated that the housecleaning has just begun.

The aircraft program most vulnerable to outright cancellation remains the Marine Corps' Osprey, a hybrid transport that can travel at the relatively high speeds and long distances of a propeller-driven aircraft, yet take off and land like a helicopter. The aircraft recently resumed flight testing after being grounded for more than a year because of a series of accidents and investigations into falsified maintenance records. While the Marine Corps still wants to purchase 360 Ospreys to replace its aging inventory of CH-46 and CH-53 helicopters, V-22 production is currently limited to the "minimum sustaining rate" necessary for continued flight testing and research.

The Pentagon has also launched a study of the Air Force's F-22 stealth fighter program, and many observers expect the program to face another round of cuts. Designed to replace the service's fleet of F-15 fighters, the F-22 program has already been cut six times since its inception in the mid-1980s, from 750 aircraft to a proposed 331, with each cut raising the per-unit cost of the aircraft. If design costs are included, the F-22s will now cost roughly $200 million a plane, making it by far the most expensive fighter in history.

Because it is the least mature of the tactical aircraft programs, the Joint Strike Fighter is likely to face similar cuts. Last year, Lockheed Martin defeated Boeing in a competition to produce the new fighter, which is intended replace existing aircraft in the arsenals of the Air Force, Navy and Marine Corps. Under current plans, the combined service purchases for the plane would total 2,852 aircraft at an estimated cost of $223 billion, making it the biggest aviation program ever.

That is, if the Joint Strike Fighter and its fellow tactical aircraft programs can survive the winds of transformation.

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