When it comes to the Southland’s defense industry, this is not Pearl Harbor. Nor is it even the Reagan-led military buildup in the 1980s. Area defense contractors, in fact, are not likely to see much business in the short term from any U.S. military buildup to fight terrorists. Less clear are the economic benefits from any longer-term campaign.
Half of a $40 billion emergency aid package approved to respond to the terror strike is expected to go to replenishing munitions supplies, providing benefits for National Guard reservists and possible Special Forces units, as well as spying and bribing foreign operatives. Several top-secret “black projects” also could be in the works.
Even if the overall defense budget skyrockets past the projected $329 billion in fiscal year 2002, which began Oct. 1, analysts said there will be no significant boost in funding for Southern California firms as a direct result of the Sept. 11 attacks.
“Early indications are that very traditional Pentagon programs are going to get additional funds,” said Christopher Hellman, senior analyst for the Center for Defense Information, a Washington think tank. “Very little is going to flow into defense industries in L.A. The region doesn’t buy spies. It’s in the development and production of technology.”
But the area could play some role in the terrorism-related buildup. Before the United States can fire weapons at terrorists, it has to find them, and analysts said a portion of the $17 billion the Pentagon reportedly is seeking from the initial $40 billion package will be earmarked for reconnaissance planes, information technology and communications equipment.
This could position Northrop Grumman Corp. to receive funding to accelerate the production of its Global Hawk unmanned aerial reconnaissance vehicle, which is capable of traveling up to 65,000 feet for more than 30 hours at a time and eliminates the danger of a pilot getting shot down.
Initial plans called for the company to begin delivering two planes per year at a cost of $16 million to $20 million each in 2003, with production doubling after a few years until the Air Force has a fleet of 60 planes.
“There is close to a 100% chance that funding for it will be accelerated,” said Loren Thompson, an analyst with the Lexington Institute, an Alexandria, Va.-based think tank. “Global Hawk has specific features that make it potentially useful against a threat. It’s an advanced technology that could be rapidly produced.”
Information technology used to intercept and process data from satellites and other sources would be provided by Computer Sciences Corp. of El Segundo, which subcontracts to every major contractor.
Should the Pentagon decide to go with a business-as-usual approach in pursuing expensive hardware, projects that could land funding for additional or accelerated production
include:
++The Joint Strike Fighter, which would generate more than $100 billion in subcontracting work out of the $300 billion overall contract for one of two teams led by Northrop, which is under team leader Lockheed Martin Corp., or Raytheon, which is under team leader Boeing Co.
++Navy’s F/A-18 Super Hornet jet fighter’s center and rear fuselages, which are made by Northrop in El Segundo under a contract with Boeing for 212 of the $50 million planes.
++Air Force’s Boeing C-17, built in Long Beach, for which the Air Force has already awarded $14.2 billion for 80 of the cargo planes.
++Global Positioning Satellites and communications satellites made in Long Beach by Boeing, which just finished making 10 satellites under a $1.7 billion Navy contract and is currently building six satellites for the Air Force in a $1.3 billion contract.
++Space-Base Infrared System, a constellation of low-orbiting satellites that identifies and tracks incoming ballistic missiles. Raytheon of El Segundo and TRW Inc. of Redondo Beach are competing with a team led by Spectrum Astro Inc. of Gilbert, Ariz., for a production contract to be awarded late next year. The project would be part of President Bush’s hotly debated missile defense proposal.
Although the $60 billion to $100 billion missile defense plan remains on the table, the Southland will not see any additional funding in the foreseeable future for that project, said Lt. Col. Rick Lehner, spokesman for the Ballistic Missile Defense Organization, a joint agency overseeing the program.
The region’s high-tech base stands to receive billions of dollars if the project is approved. But no more funds will be sought beyond the $8.3 billion expected to be approved for research, development and testing in the fiscal 2002 defense budget. n
Greenberg is a staff reporter at the Los Angeles Business Journal.
