Md. may get more defense work

Contractors primed for new technologies

Drone, robot programs in place

`We can expect to do well,' state economic chief says

February 04, 2004|By Robert Little | Robert Little,SUN STAFF

The Pentagon's ambitious proposal to develop new technologies including anti-missile systems and robotic vehicles could prove fruitful for defense contractors in Maryland, many of which have staked their future on the "transformational" military that the Bush White House covets.

The proposed $401.7 billion defense budget calls for continued spending on futuristic military hardware such as the RQ-7 Shadow pilotless aircraft, the Army's Future Combat System of robotic and computerized equipment and the Air Force's F-35 Joint Strike Fighter. All of them use large design or manufacturing operations in and around Baltimore.

Although only a proposal - and one that could face a vigorous massage from critics in Congress - the 2005 fiscal year defense budget would prolong the major development and manufacturing programs that place Maryland among the top five or six states in the country in terms of its share of the Pentagon's budget.

"We live or die by the defense budget here," said Aris Melissaratos, secretary of the Maryland Department of Business and Economic Development. "We can expect to do well in times of increased spending on the military and homeland defense, so I'm quite pleased with what President Bush has proposed."

According to recent statistics from the Department of Commerce, Maryland's share of federal defense spending, estimated to be more than $10.2 billion a year in the most recent survey, ranks sixth nationwide overall and fourth per capita.

Commercial activity generated by military tenants such as Aberdeen Proving Ground, Patuxent River Naval Air Station and Naval Surface Warfare Center facilities in Southern Maryland provide much of the fuel for economic activity throughout the state, Melissaratos said.

The state also would benefit from the latest proposed budget by virtue of its prominent role in development and manufacturing programs that Bush's spending plan identified as government priorities.

The budget includes $42 million to buy four Shadow unmanned aerial vehicle systems from AAI Corp., for instance, continuing the marquee product line of a contractor with as many as 900 employees at its Hunt Valley headquarters and other locations in Maryland.

The remote-controlled Shadow is designed to provide tactical video and electronic surveillance for ground troops, and was recently deployed in Iraq.

The Army's Future Combat System, including development of robotic systems and electronic upgrades for the wheeled Stryker vehicle, is a focus of General Dynamics Corp.'s Robotic Systems division in Westminster.

Research and development spending for that program - most of which is being conducted by a team led by Boeing Co. and Science Applications International Corp. - would rise 78 percent under the proposed budget, from $1.8 billion to $3.2 billion.

The $9.2 billion proposed budget for missile defense is expected to contribute to about 150 new jobs at the Elkton division of Alliant Techsystems Inc., which is developing the propulsion for an anti-missile system called the Kinetic Energy Interceptor.

The division had about 380 employees before the contract was awarded. The developmental program, one element of what the White House envisions as a global anti-missile shield, is designed to destroy enemy missiles while they are in their vulnerable boost stage, soon after launch.

The budget also includes increased funding for the Navy's Standard Missile-3, an anti-missile system for which the Elkton plant is developing rocket motors.

And Maryland could benefit from the rising fortunes of Northrop Grumman Corp., whose Electronic Systems sector, based in Linthicum in northern Anne Arundel County, would play a commanding role in the Bush administration's proposed development of fighter aircraft, missile-defense technology and ship construction.

"Northrop Grumman's program areas are right in the sweet spot here, and it looks as though they're going to be well supported and well funded," said company spokesman Randy Belote.

"The Linthicum operation obviously plays a substantial role, by supplying sensors and electronics for most of our major programs. In terms of revenue, it's our largest sector," Belote said.

Bush requested $4.2 billion to buy 24 F/A-22 Raptor aircraft, an Air Force fighter whose radar systems are built in Linthicum. The budget also proposed spending $4.5 billion on the Joint Strike Fighter, a multirole jet whose radar is under development at the Baltimore-area plant and is envisioned as the most lucrative defense program ever.

The budget request also called for delaying the Joint Strike Fighter and possibly increasing its overall costs, which could mean that the Pentagon would purchase fewer planes once they were finished. But the F/A-22 and Joint Strike Fighter programs account for so many of Northrop Grumman's 7,200 or more employees in Linthicum that any decision preserving those programs is welcome, Melissaratos said.

"If they made it through the budget, then we're in great shape," he said.

The defense budget that Bush proposed would account for almost 20 percent of the total federal budget, an increase from about 17 percent in the Clinton era.

President Ronald Reagan spent 27 percent of the federal budget on defense, and George H.W. Bush's Pentagon spending amounted to about 22 percent of the budget.

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