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Raytheon's AIM-120D AMRAAM faces funding cut

A panel of US lawmakers has proposed a devastating funding cut for the Raytheon AIM-120D AMRAAM in order to clear a growing production backlog.

Raytheon's production line for the latest version of the medium-range air-to-air missile is more than 100 weapons behind schedule and operational testing has yet to begin.

As a result, the House appropriations committee's defence panel wants to eliminate funding in the AIM-120D production account, freeing up $435 million for 379 missiles to be spent elsewhere in the fiscal year 2012 defence budget.

Such a move, if approved by the Senate, would gut Raytheon's production line for one year. Since its AIM-120D and export AIM-120C7 missiles are produced on the same line, the price of the latter could rise as order quantities are reduced. That could leave foreign buyers with a larger bill or fewer missiles next year.

If Raytheon's production line catches up next year, the proposal also threatens to create a break in the line for AIM-120D missiles, which add a two-way data link and GPS-aided navigation. Production breaks generally create higher costs when funding resumes.

The proposed funding cut would wipe out Lot 26 in the annual AMRAAM production sequence.

The US Air Force is still negotiating terms with Raytheon for Lot 25 of production, which also includes AIM-120D missiles for the US Navy.

"The combination of the delayed FY2011 contract and the lag in production allows the requested FY2012 funding to be used for higher priorities," the appropriations panel's report said.

The Senate appropriations committee's defence panel is expected to consider the issue in July as part of the FY2012 defence budget.

Any differences between the Senate and the House versions of the defence spending bill must be resolved in conference before a joint package can be sent to the White House to be signed.

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