Missile Defense Plan’s Job Impact in California Unclear

Weapons makers were cheered by the Pentagon’s decision to seek more funding for a missile defense system, but said Wednesday that it’s too early to tell whether it will mean more jobs at California sites competing to design the system that might actually be deployed.

Raytheon Co. clearly got a boost from the Defense Department’s action because the Pentagon made a Raytheon-led Navy missile defense program a more direct competitor to a struggling Army project led by Lockheed Martin Corp.

Raytheon, Lockheed Martin and Boeing Co. are all developing systems that would launch missiles into space to knock out enemy missiles launched either at the United States or at U.S. or allied troops overseas.

There are three main types of systems under design that are competing for Pentagon dollars in hopes of being deployed. One is a stationary national system that seeks to protect all 50 states and could intercept the longest-range missiles. The two others are so-called mobile theater systems--one on land and the other aboard warships--for combating short- and medium-range missiles.

Analysts said the national system and one of the theater plans are the most likely to be selected. But Defense Secretary William S. Cohen said a decision on deployment won’t be made before next year.

The national project is headed by Boeing’s missile defense group in Anaheim, which was “definitely pleased” by Cohen’s announcement that the Pentagon’s proposed budget would allocate in excess of $6.6 billion to the program through fiscal 2005, for a total of more than $10.5 billion, said Boeing spokeswoman Cynthia Taylor.

Whether that translates into more jobs won’t be known until the budget is passed and Seattle-based Boeing negotiates changes to its original, $1.6-billion contract to head the program, she said. That three-year contract was awarded last May, and Boeing currently employs about 350 people on the program in Southern California, mostly in Anaheim and Downey.

In the theater area, Cohen said unspecified additional funding would go to develop Raytheon’s naval system, in which modified Raytheon Standard missiles would be launched from Navy cruisers to intercept enemy missiles.

But Cohen also said that as a result of problems with Lockheed’s system, the Raytheon Navy project will be evaluated alongside the Lockheed Army system and the Pentagon will then “focus on the most successful program.”

“We’re delighted with this development,” said David Shea, a spokesman for Lexington, Mass.-based Raytheon. The firm’s Standard missile is assembled in Tucson.

Lockheed’s mobile system is called the theater high-altitude area defense program, or THAAD. The project--which is based in Sunnyvale, Calif., where 600 of the program’s 900 employees work--has been plagued with problems, including five successive test failures.

In light of those glitches, Raytheon’s naval plan is being elevated because “it’s based on existing missile technology, so it doesn’t present that level of difficulty” to develop as the all-new THAAD, said Steven Zaloga, an analyst at the research firm Teal Group in Fairfax, Va.

The Pentagon also might be able to deploy the Raytheon system more quickly, Zaloga said. Indeed, the Pentagon said it wants additional funds because the threat of attack is growing.

Reacting to the Pentagon’s comments, Jeffery Adams, a spokesman for Bethesda, Md.-based Lockheed, said that makes “it all the more important for the THAAD team to remain highly focused on the success” of the project.

But no matter which system, if any, is ultimately deployed, none of the major defense contractors is likely to be left out.

Raytheon also is developing the ground-based radar for the THAAD program, and it’s working on radar for Boeing’s national system. Lockheed’s Sunnyvale plant is developing the launch vehicle for the national system.

* RESPONSE TO THREAT: The Pentagon is moving to revitalize missile defense programs. A17