Missile defense winners and losers

By Jen DiMascio
|  Wednesday, Sep 29, 2010  |  Updated 7:23 PM CDT
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President Obama’s decision to scrap the Bush Administration’s plan to base an anti-ballistic missile shield in Eastern Europe is creating political, diplomatic and financial aftershocks in Congress and the defense industry, among allies and adversaries abroad, and from small towns in Alabama to the Alaskan frontier.

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President Obama’s decision to scrap the Bush Administration’s plan to base an anti-ballistic missile shield in Eastern Europe is creating political, diplomatic and financial aftershocks in Congress and the defense industry, among allies and adversaries abroad, and from small towns in Alabama to the Alaskan frontier.

Here’s a look at who wins and who loses in the decision to kill the $4.5 billion plan to put land-based missile interceptors in Poland and a radar site in the Czech Republic, and replace the system with smaller, land- and sea-based SM-3 interceptors that would defend against short- and medium-range missiles.

This corollary: Obama’s decision fueled a furious debate over U.S. national security, with the president claiming his new plan would improve it, opponents calling the plan Russian appeasement, and other critics divided over whether it would help or hurt NATO security, reign-in or embolden Iran. In short, it could take years to learn who the real winners and losers are.

WINNERS

Alaska

Alaska Sen. Mark Begich (D) said the decision to scrap the land-based anti-missile system in Eastern Europe made the ground-based missile defense system at the U.S. Army’s Ft. Greely more important.

“Assuming the President’s decision to cancel missile system deployment in Europe is final, Alaska’s [ground-based missile defense] system must be fully deployed and properly maintained to protect America from attacks by rogue states,” Begich said. “I look forward to receiving a full explanation from the Obama administration on this decision and how it proposes to maintain Alaska’s defense system.”

Begich is fighting proposed cuts to the Ft. Greely site made in Defense Secretary Robert Gates’ budget request this year. The senator sees Obama’s decision as a way to sell the importance of the Alaska site in protecting the United States from intercontinental missile attacks, in the absence of the European system.

Russia

Thursday’s announcement from the Kremlin -- which had bitterly complained that a U.S. missile defense system in Eastern Europe would compromise its security -- left little doubt that Russia thinks it came out ahead, an assessment shared by many GOP lawmakers on Capitol Hill.

“I very much hope that this correct and brave decision will be followed by others,” Russian Prime Minister Vladimir Putin told reporters.

The Russians have railed against establishing a missile shield in Poland and the Czech Republic, despite repeated assurances from Washington that the interceptors were not aimed at them, but at Iran. What is not know yet is whether Russia will respond – as Obama administration officials hope – with strong actions to help curb Iran’s missile and nuclear programs.

Lockheed Martin and Raytheon

As Mark Twain might put it, reports about the demise of missile defense are greatly exaggerated. The administration’s new plan focuses future investment on short- and medium-range missile systems including the Patriot, the Theater High-Altitude Air Defense system (THAAD), the Aegis ballistic missile system and the Standard Missile-3 (SM-3).

By extension, that means potential new business for Lockheed Martin, the nation’s largest defense contractor, which makes the Aegis missile defense system and THAAD. Raytheon, which makes the SM-3 missile and the Patriot, also likely will see a boost.

Moreover, said William Hartung, director of the arms and security initiative at the New America Foundation, “If the decision ends up putting Patriot missiles in more countries sooner and accelerates U.S. procurement of Aegis systems to offer the ‘sea-based’ defenses that are part of the missile defense restructuring, all of this could end up being a net gain for the defense industry.”

The Navy

This is the time of year when the Joint Chiefs of Staff start angling for the largest possible share of the Pentagon’s budget. Given the wars in Iraq and Afghanistan, soaring deficits and the economic crisis, the competition among services will be intense.

In that kind of environment, the joint chiefs tend to fright hard for parochial interests. So it’s a pretty good time to have a new and important mission backed by the president, defense insiders say – even it’s a boring one for sailors.

At a more basic level, the shift to sea-based missile defenses has already benefitted the Navy, which struggles every year for money to increase the size of its fleet. The president asked for six more DDG-51 ballistic-missile-capable destroyers for the Navy’s fiscal year 2010 budget, and more can be expected.

 

LOSERS

Alabama

Soon after the president’s announcement Thursday, Rep. Parker Griffith (D-Ala.) came under attack by Republicans, who accused him of not marshalling Democratic support to keep missile defense jobs in his district.

The first-term, Blue Dog Democrat represents Huntsville, Ala., where the Boeing’s ground-based missile defense research is based. His district has 32,000 military jobs and is home to 78,000 military retirees.

“Either Parker Griffith doesn’t have the gumption to stand up to his party’s president, or he’s a woefully ineffective advocate for Tennessee Valley jobs,” said NRCC spokesman Andy Sere.

Griffith did not respond to requests for comment.

Boeing

Boeing’s ground-based missile system has been cut off at the knees – first by Defense Secretary Robert Gates’ decision to scale back those systems in California and Alaska, and now by the President’s decision to cut the Bush Administration’s European missile shield.

The loss comes on the back of other cuts by Gates to Boeing’s transformational communications satellite, its Combat Search and Rescue helicopter, and its large role in the Future Combat Systems.

The Pentagon is going to keep part of the European missile defense shield alive with research and development dollars – but that’s far smaller piece of the pie than what comes with production.

Company spokeswoman Jessica Carlton said it’s too early to know exactly how Boeing’s operations in Huntsville will be affected.

"Boeing is proud of our role as the prime contractor for the Ground-based Midcourse Defense system,” Carlton said. “We look forward to continuing our efforts on the development, application and flexibility of the two-stage interceptor as it builds on the proven technology of the GMD system to meet new and evolving threats."

The Army

The net impact of the decision on the Army is unclear, but it’s hard to see how the service comes out ahead. It may pick up the management of ground-based missile systems as they are rolled out in Europe, and it manages land-based operations for THAAD missiles, which will have a role in the new system announced by Obama.

But some analysts expect a food fight between the Army’s missile operations in Hunstville, Ala., and the Navy’s emerging missile research center in Dahlgren, Va.. The momentum seems to be with the Navy as the Boeing missile defense system based in Huntsville is scaled back and budgets for the ship-board Aegis and SM-3 increase.

In the future, the Army and the Navy may go head to head over who manages the land-based variant of the SM-3. The Pentagon would like to send it to three sites in Europe, but that is not scheduled until 2018.

Poland

The timing of Obama’s decision couldn’t have been worse, coming on the 70th anniversary of the Soviet invasion of Poland. Although Poland will still be able to buy Patriot missiles and have a U.S. military presence on its soil, for many Poles, the decision not to base interceptors in their country underscored the folly of relying on fickle allies.

“Americans have always cared only about their interests, and all other [countries] have been used for their purposes. This is another example,” said Polish Solidarity leader Lech Walesa Walesa, who won the Nobel Peace Prize in 1983. Poles “need to review our view of America. We must first of all take care of our business.”

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