Boeing, Lockheed May Lose as Obama, McCain Reject Big Weapons

[DeepModem Mom]

Bloomberg News: Boeing, Lockheed May Lose as Obama, McCain Reject Big Weapons
By Ken Fireman and Gopal Ratnam

June 30 (Bloomberg) -- Goldman Sachs Group Inc. warned its clients last month that Barack Obama would be "a negative for defense stocks" if he became president, because he will cut weapons programs that generate the companies' biggest profits. Boeing Co., Lockheed Martin Corp. and other military contractors may not fare any better under John McCain.

While the two presidential candidates are hammering each other over their differences on Iraq, they share a skepticism over big Pentagon programs such as Lockheed Martin's F-22 fighter and the Army's $159 billion Future Combat Systems, a modernization plan jointly managed by Boeing and SAIC Inc. "When you get beyond the issue of the war in Iraq, Senator McCain and Senator Obama sound remarkably similar on many defense issues," says Loren Thompson, a defense analyst at the Lexington Institute in Arlington, Virginia.

Both have signaled they will increase overall defense spending. Still, they say the military should invest in technologies best-suited to fighting the unconventional wars of the post-Sept. 11 world -- and rethink those designed for the Cold War. Thompson says that will likely lead them to favor building more cargo and tanker planes and developing the Littoral Combat Ship, a new Navy vessel designed for coastal operations....

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Both McCain and Obama say they will order a comprehensive review of weapons spending early in their presidency....

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Whitten Peters, an Obama military adviser, says it's wrong to view his candidate as a reflexive Pentagon budget-cutter. He disputes the May 13 Goldman Sachs analysis that an Obama presidency would be harmful to the defense industry. "He has said he'd spend on defense what needs to be spent, recognizing overall constraints on the budget," Peters says. Obama isn't going to take money from the military budget to pay for domestic programs, he says....

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The industry isn't tilting either way, according to one measure: campaign contributions. Its total donations to the two candidates are virtually equal....

http://www.bloomberg.com/apps/news?pid=20601087&sid=adXiGrYSU5PA&refer=home