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Defense spending to favor spying
09/29/2001
By GARY GENTILE LOS ANGELES — In the nation's ``new kind of war'' on terrorism, defense
spending is likely to focus as much on information and surveillance as bombs and
bullets. Unlike previous conflicts, which relied heavily tanks, fighter jets and
ships, a prolonged campaign against terrorists will place increased emphasis on
an electronic battlefield that will require sensors and software, analysts said.
Companies such as Northrop Grumman Co., which is developing a long-range
unmanned surveillance vehicle and has invested heavily in electronic warfare
systems, should benefit. Other contractors building the next generation of
satellite-guided missiles and sensitive snooping devices also will play a role.
``This is a new war that will require new weapons,'' said John Kutler,
chairman and chief executive officer of Quarterdeck Investment Partners, a Los
Angeles investment bank that focuses on aerospace and defense. ``The Pentagon
has been paying lip service over the past 10 years to its need to find a new
mission in the post-Cold War environment. Unfortunately, it didn't find the
mission. The mission found it.'' It's too early to predict which companies and which weapons systems will be
funded until the administration outlines the scope of its military response to
the terrorist attacks of Sept. 11. Bush, two days after the attacks, said ``a
new kind of war'' had been declared on the United States and added, ``My resolve
is steady and strong about winning this war.'' Analysts said the new kind of warfare will rely more than ever on collecting
and interpreting data, then communicating that information quickly and securely
to troops in the field. That need is even greater if the United States attacks
countries with few stationary military targets such as missile silos or bases.
Companies including General Atomics Aeronautical Systems Inc., which makes
the Predator unmanned spy plane, and Raytheon, which makes radar systems and
cruise missiles, should benefit. Bullets and bombs will still be needed to fight a sustained war, especially
if ground troops are used to invade countries that harbor terrorists, analysts
said. Money to upgrade existing weapons systems already was part of the Defense
Department's budget plans before the terrorist attacks. ``During the Kosovo air war, we almost ran out of stuff to drop,'' said John
Williams, a spokesman for the National Defense Industrial Association, a trade
group. ``Munitions are probably the first thing, depending on how massively we
want to do this and what the eventual targets are.'' Congress will soon receive a Pentagon review of military spending, which
should reveal the defense department's priorities for the next four years. The Senate is considering a request for $343 billion for Defense and Energy
department needs. The spending bill already has passed the House after
legislators there diverted some money President Bush wanted for his
missile-defense program to counterterrorism efforts. And an announcement on the next generation fighter plane, the joint strike
fighter, should be made within the next month. Boeing and Lockheed Martin are
competing for the contract. Other weapons programs, including a next-generation unmanned spy plane from
Grumman, the Global Hawk, and computer warfare systems that can protect domestic
computer networks and attack enemy systems, also are likely to receive funding.
The Defense Department doubled spending for the Global Hawk program in its
2002 budget. The remote-controlled plane, with a wingspan comparable to a Boeing
737, will carry more surveillance equipment and systems designed to track moving
targets than similar aircraft now in use. Grumman also is developing an unmanned combat craft called Pegasus, which
will carry missiles and other weapons. Boeing is working on a similar system.
Both are in the early testing stages. In March, the U.S. Air Force bought seven more Predators and signed an option
for another seven, bringing the total number in service to 79. General Atomics
is working on a jet-powered Predator that will carry more equipment and fly at
higher altitudes, above the range of enemy fire. The Defense Department's research arm also is working on a system to allow
surveillance planes or satellites to track moving targets, something existing
bombs and missiles cannot do with precision. The system uses airborne radar that
tracks a target and provides the information immediately to missiles in flight.
In addition to large, well-known contractors, a number of smaller firms,
called special access defense companies, are conducting classified research on
cyber warfare, analysts said. Companies involved in this area will discuss only their efforts to defend
commercial and military computer systems against what Grumman chief executive
officer Kent Kresa called an electronic Pearl Harbor in a speech last year.
But analysts said the Defense Department is likely developing cyber warfare
weapons of its own, designed to confound enemy weapons and scramble enemy
communications. ``There are people working to prevent terrorist hackers,'' said Jacques
Gansler, a University of Maryland professor and undersecretary of defense in the
Clinton Administration. ``On the other end of the spectrum, there are people
working on highly classified offensive and defensive information warfare
systems. On the offensive side, they can give false information or prevent
(enemy) systems from working.'' Computer Sciences Corp. of El Segundo declined to say whether it was working
on such projects. But the company does provide software to protect military and
civilian computer systems from intrusion, a service expected to play a pivotal
role as the newly established Cabinet-level office of Homeland Security gets
organized. ``Cyber defense will be a part of the homeland defense,'' said Thomas Burke,
director of information assurance for CSC. On the Net: Northrop Grumman Co. http://www.northropgrumman.com General Atomics Inc.: http://www.generalatomics.com
Raytheon Co.: http://www.raytheon.com Lockheed Martin: http://lockheedmartin.com Computer Sciences Corp.: http://www.csc.com Orincon Industries: http://www.orincon.com Alphatech: http://www.alphatech.com National Defense Industrial Assoc.: http://www.ndia.org
AP Business Writer