The US Army has partially terminated the $200bn manned ground vehicle (MGV) programme in which Boeing is the lead contractor.
It is believed that US Defense Secretary Robert Gates terminated the programme because the vehicles weren't shown to adequately protect against the roadside bombs they were designed to guard against.
The Army had already issued a stop work order for the MGV as well as the giant Non-Line of Sight Cannon (NLOS-C) on 24 June, in preparation for the partial termination.
The Army will now conduct a 120-day requirements analysis for a new ground combat vehicle (GCV) programme.
In a press statement from Boeing a spokesperson said that "while this is disappointing, we are encouraged by the Army's commitment to preserve key technologies and leverage the significant design and development work already accomplished.
"We are working closely with our customer to minimise the impact to the programme as we restructure our contract to continue to support the Army as it transitions to its new Brigade Combat Team modernisation plan," the Boeing spokesperson said.