The road ahead

For a region of the country where defense issues play such an important role, it may be reassuring to hear analysts say it's unlikely defense will take a hit when the Barack Obama administration takes office. But, as with any sweeping statement, the devil is in the details.

Broadly speaking, analysts say Obama will be disinclined to make cuts that could cost Americans jobs during an economic downturn. Marion Blakey, president of the Aerospace Industries Association, said Obama understands the critical nature of defense, and the acute need to modernize the military with new equipment. (Story)

But at least one defense company is not so sure. England-based defense giant BAE Systems, which has operations in the United States, including the Gulf Coast, expects the United States to spend less on its military in an Obama presidency. (Story)

In either case, the new administration will face tough questions on major weapons programs, including how to move forward on the next generation of destroyers - an issue of high importance to Pascagoula and New Orleans. Both Obama and John McCain talked about controlling the cost of defense programs, and that could lead to more fixed-prices rather than those that allow a contractor to bill the government for cost increases.

There are at least two high-profile projects in the Gulf Coast that will be impacted by the next administration, not the least of which is the Air Force tanker project. In February the $40 billion contract was awarded to the Northrop Grumman/EADS North America team. The plan was to assemble the planes in Mobile, Ala.

But the Government Accountability Office later agreed with a Boeing protest and said the selection was flawed. After initially planning to put the rebid on a fast track, the Pentagon decided there was not enough time and opted to punt to the next administration.

Those who favor the Northrop/EADS team are likely a bit concerned that Obama won the election. When the contract was first awarded to Northrop/EADS, both Obama and Hillary Clinton criticized the Air Force decision.

After the Pentagon decided to punt, Obama praised the Pentagon for that decision. In September, he suggested he would favor Boeing for the contract if elected president. Obama told members of an aerospace union with close ties to Boeing that he would do everything in his power to “create and defend American jobs.”

If he holds true to that and works towards Boeing winning the contract, reaction outside the United States will be, to say the least, interesting. On the grass roots level, a Boeing win will likely be applauded by European aerospace defense workers who have seen jobs go away – in some cases to the United States. But foreign companies that compete in the tough U.S. market for defense dollars will not be happy with a Boeing win. Any moves toward protectionism will not be viewed favorably.

The other high profile aerospace program of interest to the Gulf Coast is the Constellation program and the current shuttle program. In the space sector, both Michoud Assembly Facility in New Orleans and Mississippi’s Stennis Space Center will be impacted by decisions of the next administration.

Obama has called for renewing the nation’s commitment to NASA and to provide a budget with sufficient resources for success in its critical missions - space exploration and human spaceflight, science and aeronautics research. He outlined his feelings in a letter to congressional leaders.

Among other things, Obama said NASA should take no further action that would make it more difficult or expensive to fly the shuttle beyond 2010. He closed his letter by saying “NASA helped America win the Cold War without firing a single shot by dazzling the world with our technological and moral leadership. It is time to dazzle them again.”

The next president’s backing may be particularly important given that NASA lost three strong supporters in the House Science Committee. Reps. Nick Lampson, D-Texas, and Tom Feeney, R-Fla., lost their re-election bids, and Rep. Mark Udall, D-Colo., chairman of the House Science space and aeronautics subcommittee, won his bid to represent Colorado in the Senate. (Story)