US defense industry frets about high Iraq spending [View All]

[ECH1969]

A surprising group of protesters is starting to voice concerns about the high level of spending on the U.S. occupation of Iraq: the defense industry. Some defense firms and industry experts are concerned that money spent on Iraq is taking away from more lucrative, longer-term multibillion-dollar programs.

The United States needs to scale down involvement in Iraq and pare back its uniformed forces to keep the large, so-called "transformational" programs on track, according to L-3's Lanza, founder of the Pentagon's ninth-largest supplier.

If high Iraq costs persist, large programs like the Army's Future Combat Systems modernization plan, led by Boeing Co., and Lockheed Martin Corp.'s state-of-the-art Joint Strike Fighter jet, are likely to be scaled back or stretched out, industry analysts said.

"No one was told that there was a choice between Iraq and recapitalizing the nation's military," said Richard Aboulafia, an analyst at Teal Group, which advises defense and aerospace companies.

http://today.reuters.com/News/newsArticle.aspx?type=domesticNews&storyID=2006-02-06T231752Z_01_N06282462_RTRUKOC_0_US-ARMS-IRAQ.xml