"Lockheed's star war is dud so far:
Anti-missile missile hasn't hit a thing in four
expensive tests; It
may lose program to rival; Firm's reputation is on
the line in
bid for even larger program"
The Baltimore Sun, 4/19/98
By Greg Schneider
Sun Staff
During the first part of May, something is supposed
to explode
over the high desert of New Mexico.
It could be a pair of missiles colliding at a
combined speed
four times faster than a bullet. Or it could be the
reputation of
America's biggest defense contractor.
Lockheed Martin Corp. of Bethesda, whose slogan is
"Mission Success," has failed to hit the target in
four previous
tests of a new Army missile designed to knock enemy
rockets
out of the sky.
Congress has ordered the Pentagon to develop such a
weapon because American troops are all but defenseless
against the ballistic missiles of rogue nations such
as Iran. If
this next test fails -- and each one costs tens of
millions of
taxpayer dollars -- it is uncertain whether Lockheed
Martin
will get another chance to make it work.
To crank the pressure up even higher, the Pentagon is
scheduled to announce almost simultaneously next
month the
winner of a landmark contract to assemble a missile
defense
system for the entire country.
The candidates are Boeing Co. and a joint venture of
Lockheed Martin, Raytheon and TRW.
With ballistic missile defense the kind of lucrative,
politically
prominent market that Lockheed Martin prefers to dominate
-- worth $4 billion next year -- May is shaping up as an
unusually important month for the company.
Dual successes would give Lockheed Martin unparalleled
status. Failures, especially in light of the
company's court battle
with the government over plans to buy Northrop Grumman
Corp., would mark a corporate low point and raise
questions
about Lockheed Martin's ability to manage complex
systems.
"Clearly there were problems in terms of quality" on
the Army
missile program, Pentagon acquisitions chief Jacques
Gansler
said in an interview. "One might call that management
issues.
My impression is they're trying to address those.
We'll see."
For an annual report to Congress last week on the Army
missile system, called the Theater High-Altitude Area
Defense
program, or THAAD, Gansler had his staff consider an
option
that would be particularly humiliating to Lockheed
Martin:
bringing in another company to compete for, take over or
clean up the troubled system.
"It was analyzed and we decided not to. Of course, we can
always revisit that," Gansler said.
Lockheed Martin has taken a year since its last
failure to test
each component of the THAAD system. "We are scrutinizing
this thing a lot tighter than we have in the past,"
said the
company's program manager, a plain-talking retired Army
general named John H. Little.
He said he will postpone the test up to the last
moment if
anything appears out of whack. The launch has already
been
delayed twice, having been scheduled originally for
December.
Another failure and, "I know the government will not
be very
happy," Little said. "I know I will get wire brushed
pretty good
and Lockheed Martin will get wire brushed pretty good."
Making one rocket strike another on the fringes of
space is a
hard thing to do. Scientists have been trying to
figure that out
since President Ronald Reagan unveiled the "star wars"
program in 1983. Over those 15 years, the nation has
spent
about $50 billion developing the technology. After
all that
investment -- more than the Pentagon spends in one
year on
all new aircraft, Navy vessels and weapons systems
combined
-- there is still no working system.
"The thing has consumed 50 percent more than the stealth
bomber program and they've got nothing to show for
it. We're
talking nothing," said John Pike of the Federation of
American
Scientists, who has long criticized the effort.
Anti-missile missiles come under the aegis of a
Ballistic Missile
Defense Organization, or BMDO, and is divided into two
categories: Theater missile defense, where THAAD is a key
component, means shooting down ballistic missiles that
threaten troops in the field. National missile
defense means
protecting the continental United States.
Compared with Reagan's original goal of an umbrella
in space
to stop Soviet warheads, the current national defense
plan is
modest. About 20 missiles housed in one central
complex --
possibly in North Dakota -- would counter the odd
terrorist
shot or accidental launch. The government would like to
deploy it as soon as 2003. Even that limited plan
involves a
mind-boggling network of satellite sensors, ground radar
systems and computer links. To save money, the Pentagon
wants to hand over assembly of that system to a private
company.
That contract, for what's called the National Missile
Defense
Lead Systems Integrator, will be awarded during the first
week of May. It could be worth more than $10 billion.
Lockheed Martin formed a new company with its partners
Raytheon and TRW to seek the job. Their United Missile
Defense Co. is considered a heavy favorite over Boeing,
because the three partners already are working on major
components of the system while Boeing has little
experience.
"Our three companies have most of the expertise in
the United
States on ballistic missile defense technologies and
programs.
In fact, we have almost all the programs, with the
exception of
one [relatively small] contract held by Boeing," said
William C.
Loomis, a former Lockheed Martin executive who is
president
and chief executive of United Missile Defense.
Lockheed Martin dominates its two partners in the
field, and
experts say the company has made ballistic missile
defense a
priority.
"This is an emerging market and clearly one that Lockheed
Martin is looking to expand as one of their key
markets of the
next century," said Brett Lambert, an industry
analyst with the
defense consulting firm DFI International.
Losing the national missile defense contract would
not cripple
the company, because it already has so many of the
component contracts, Lambert said. But, he added, it
would
be a huge moral victory for Boeing.
Some experts say the Seattle company could be the better
choice. As Pike put it, a Boeing 747 jetliner is
nothing but a
huge system put together from thousands of components.
That's just the type of systems integration demanded by a
national missile defense network. But Lockheed
Martin's skills
in that area have come under scrutiny because of its
problems
with THAAD.
Even though Lockheed Martin is only a third of United
Missile
Defense, "their lack of performance on THAAD could have
some negative bearing" on the national missile
contract, said
financial analyst Paul Nisbet of JSA Research Inc.
A Pentagon panel released a report in late February that
criticized the nation's ballistic missile defense
programs in
general, and THAAD in particular, for what it called
a "rush to
failure" brought on by unrealistic pressures to hurry and
develop.
"The THAAD program office also expressed concerns with
the contractor program management. Again, the root causes
were associated not only with the technological
challenge but
also with the basic set of disciplines essential to
success in
developing and testing complex systems," wrote the panel,
which was chaired by retired Air Force Gen. Larry Welch.
The Welch Report, as it is known, went on to say that
similar
problems could put the national missile defense
system at risk.
Rep. Curt Weldon, a Pennsylvania Republican who heads a
key defense subcommittee, was angered by the report and
said the technology has mainly suffered from poor public
relations.
THAAD has had seven tests, including four in which the
missile was actually fired at a target rocket. Only
the first test,
of the missile's engine, was considered a success.
But Weldon
says the Army has done a poor job of explaining that
even the
"failures" contributed a great deal of knowledge
about the
technology.
"If THAAD has another unsuccessful test," he warned,
"some
members of Congress, I think, will try to kill the
program."
No one feels that pressure more than Little, the Lockheed
Martin program manager.
"When we started out, the people who put it together said
they were willing to accept risk because they wanted the
capability quickly. I think that eroded with the
tightening of the
defense budget," Little said.
Originally, THAAD was going to be test-shot once a month
for two years. That's too expensive today.
Under certain scenarios, Little could still hold his
head up even
if the next shot misses. Simply completing the test
sequence
without a system failure would produce valuable
information.
Just to be safe, Little said he will bring "every
good luck charm
I own" to the White Sands, N.M., test range early
next month.
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