Defense Contractors Fear Bailout Fallout

By Dan Beighley
Orange County Business Journal Staff

...Some aren’t expecting many contracts for big ticket items, since many believe the federal budget is swinging from aircraft toward research and development.

“There’s a priority for strategy,” said Hector Cuellar, president of Costa Mesa-based investment bank McGladrey Capital Markets LLC, a unit of Kansas City, Mo.-based H&R Block Inc.

Programs for intelligence, security and information gathering, such as unmanned planes, radar and satellite systems, stand a better chance of getting funding, Cuellar said.

ThalesRaytheonSystems Co., a venture of Waltham, Mass.-based Raytheon Co. and France’s Thales with its U.S. base in Fullerton, recently was awarded a $217 million radar contract.

Eaton could gain contracts to make parts for unmanned planes, such as Los Angeles-based Northrop Grumman Corp.’s X-47B, which is designed to operate from aircraft carriers.

Cuellar said he believes the government won’t likely cut spending, as equipment used in Iraq likely will be replenished for Afghanistan.

“No administration would approve a significant drop,” he said....