In a blow to Boeing Co.'s defense business, the Pentagon on Tuesday said it was curtailing plans to develop a new generation of weapons and computer technologies for the U.S. Army.
The Army's biggest development program, dubbed Future Combat Systems, or FCS, was initially projected to cost $160 billion. But the Pentagon said it was canceling a major component of the program to develop new manned vehicles at a cost of $87 billion.
The Pentagon also said it was splitting up the remaining components of the program, including the development of robotic vehicles and Internet-like computer networks and renaming it the Army Brigade Combat Team Modernization.
Under the prior plan, Chicago-based Boeing was assigned as the prime contractor to oversee development of all the elements of the Army's new weapon systems, including both the manned and robotic vehicles as well as satellite-based technologies linking the vehicles together.
But Defense Secretary Robert M. Gates "expressed a specific concern that the portion of the FCS program to field new manned combat vehicles did not adequately reflect the lessons of counterinsurgency and close-quarters combat in Iraq and Afghanistan," a Pentagon statement said.
"He was further troubled by the terms of the current single contract covering the whole FCS effort," it said. "The restructuring ordered today addresses these issues."
When Boeing was tapped in 2002 to be the "lead system integrator" for the program, it was the first time the Army had turned to a single defense contractor to oversee development of a range of new technologies and weapons. It was one of the biggest and most ambitious contracts ever secured by the world's largest aerospace company.
Boeing officials said the company was reviewing the Pentagon directive but could not immediately determine what effect the restructuring would have on its operations.
More than 1,000 Boeing engineers in Huntington Beach work on some elements of the program. In all, the company has about 25,000 employees in Southern California.