DOD budget may be cut under Obama, Boeing says
Boeing Co.’s top defense executive believes the Obama administration will closely examine some of the Defense Department’s biggest weapons programs, as well as those experiencing cost overruns or delays, reports The Wall Street Journal.
Jim Albaugh, chief executive of Boeing's Integrated Defense Systems unit, said during a Merrill Lynch defense-industry conference in New York on Nov. 12 that “as a new administration comes in, they will come in and take a hard look at everything” being done by the Defense Department.
Pressure on the Pentagon budget is expected to increase, particularly as the new president grapples with demands for federal assistance from the banking and finance sectors. This is particularly worrisome for defense companies that depend on continued spending on big-ticket programs for new weapons that have yet to be fielded. “We've had a great ride here,” Mr. Albaugh said.
Before the election, Richard Danzig, a top Obama defense adviser, identified the Army’s $160 billion Future Combat Systems contract, as well as efforts to develop a national missile-defense system, as areas that would get close scrutiny. Both of those are big programs for Boeing.