Bloomberg News

Pentagon Report Shows Budget Cuts Affect Lockheed to Huntington

June 11, 2013

The Pentagon sent Congress a report providing details of $37 billion in sequestration cuts affecting defense contractors from Lockheed (LMT:US) Martin Corp. to Huntington Ingalls Industries Inc. (HII:US)

The report, provided yesterday and required by the current year’s defense appropriations measure, lists the amounts that Congress appropriated for the Pentagon’s 2,500 programs, project and budget activities, and shows how much each will be reduced by the automatic spending reductions that took effect March 1.

The Air Force’s $2.5 billion to buy 19 F-35 jets made by Lockheed reflects a sequestration cut of $503 million, according to the report. The Navy’s final $808 million to buy four carrier-model F-35s incorporates a $157 million cut, and its $1 billion for six Marine Corps short-takeoff-and vertical landing fighters reflects a $146 million reduction.

While the report doesn’t spell out the number of weapons cut in each program, defense companies will be able to use the report to determine “what funding is available for that particular program for the fiscal year,” John Roth, the Pentagon’s deputy comptroller for programs and budgets, said in an interview.

The purpose is to provide Congress a baseline of Pentagon funding that defense committees will review as they consider a Pentagon reprogramming request to move $9.6 billion between categories and mostly into readiness accounts.

V-22, Drones

In other weapons cuts, the Navy’s $1.3 billion appropriation to buy 18 additional V-22 Osprey tilt-rotor aircraft from Boeing Co. (BA:US) and Bell Helicopter Textron Inc. (TXT:US) reflects an $18 million reduction.

The Air Force’s final $82 million on 717 laser-guided Lockheed Hellfire missiles fired by Predator and Reaper drones incorporates a cut of $313,000.

On shipbuilding, the $1.74 billion Congress approved for construction of Littoral Combat Ships made by Lockheed and Austal Ltd. (ASB) reflects a cut of $43.6 million, and $437 million provided as a down payment on DDG-51 destroyers built by Huntington Ingalls and General Dynamics Corp. (GD:US) reflects a $28 million reduction.

The $3 billion for two additional Virginia-class submarines made by Huntington Ingalls and General Dynamics reflects a $227 million reduction.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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Companies Mentioned

  • LMT
    (Lockheed Martin Corp)
    • $170.11 USD
    • 0.78
    • 0.46%
  • HII
    (Huntington Ingalls Industries Inc)
    • $93.07 USD
    • 0.09
    • 0.1%
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