Possible Cuts to the U.S. Defense Budget Worry Britain

(MoneyWatch)  The Independent reports that the British government and defence industry are growing concerned about possible cuts to the U.S. defense budget having fallout to their already weakened economy. On top of Obama's treatment of Prime Minister Gordon Brown last week Britain worries that some key programs may be cut or canceled. Due to the consolidation of the U.S. defense industry in the Nineties as the Cold War ended when the U.S. ramped up after 9/11 the European defense companies gained significant business share in the U.S. Companies like EADS and BAE were able to get large contracts and team with American companies on various projects. The new Presidential helicopter, VH-71, is a program that seems to be teetering. Massive cost increases due to a changes in requirements after contract award have made it the recent poster child for acquisition programs out-of-control. Of course this contract is a European aircraft that is being modified by Lockheed Martin. If the program is canceled it will have a significant effect on Augusta Westland which will hurt the U.K. economy. The F-35 JSF also relies on English and other European companies for development and production. Cuts in quantities to that program will have a spill over effect to those countries. In the current global downturn these kind of hits to programs cannot be made up for by the British government. They are already stretched for total spending due to the high cost of their social programs. The FY10 defence budget will be interesting in what it keeps or cuts.