North Korea launch could arm Pentagon suppliers

By Jim Wolf

WASHINGTON (Reuters) - North Korea's rocket launch may be good news for Lockheed Martin Corp (LMT.N), Boeing Co (BA.N) and other big Pentagon contractors that face possible program cuts.

Defence Secretary Robert Gates is scheduled to announce his spending proposals at a Pentagon press conference at 6.30 p.m. on Monday.

Backers of a fledgling U.S. anti-missile shield lost no time pressing Gates to re-think any plans to trim spending on missile-defence, for instance. At roughly $10 billion (6.7 billion pounds) a year, it is the Pentagon's costliest arms development program.

"A new security era has begun," said Riki Ellison, who heads the grass-roots- and industry-funded Missile Defence Advocacy Alliance, which lobbies for a layered shield against missiles that could carry chemical, biological and nuclear warheads.

Arguing that Pyongyang had successfully tested a long-range ballistic missile on Sunday, Ellison urged Gates to seek full funding "to protect the millions of American lives that will be at risk."

Lawmakers seized on the launch in an 11th-hour push to curb what could be deep cuts to home state-rewarding programs such as Boeing's Ground-based Midcourse defence.

Boeing, the Pentagon's No. 2 supplier by sales, is also developing an airborne laser widely considered vulnerable to cutbacks. Its chief partners on the project are Lockheed Martin, the Pentagon's No. 1 supplier, and Northrop Grumman Corp (NOC.N), No. 3.

"The firing of this missile illustrates the critical role these systems play in our nation's defence," said Republican Sen. Lisa Murkowski of Alaska. A Boeing-funded study last year found the company's work on the ground-based system added more than $246 million to Alaska's economy in 2007.