Obama election win could boost defense companies

By Bill Rigby - Analysis

NEW YORK (Reuters) - U.S. defence contractors thrive as well during Democratic administrations, if not better, than in Republican ones, and the likely election of Barack Obama as president offers no hint of being an exception.

Defence is still largely a labour intensive, old-line manufacturing business, with close ties to the Democratic Party, and no president wants to do anything that would cut American jobs, especially in a time of economic distress.

"This president is going to care more about manufacturing jobs than any other president in a generation," said Loren Thompson, an analyst at the Lexington Institute, an Arlington, Virginia-based think-tank which specializes in defence issues.

"People will be surprised at how stable weapons spending will be. Is Barack Obama really going to cut military purchases at major weapons plants in swing states like Florida, Virginia and Colorado?"

Besides economic concerns, the United States still faces security threats and the growth of China's ambitions, making cuts to big defence programs even more unpopular.

"The basic, core defence budget will not be reduced because I don't think it can afford to be reduced," said Clay Jones, chief executive of Rockwell Collins, which makes cockpit gear for military and commercial planes.

"If you believe what (the candidates) have said, I don't think they are going to come in and gut the defence budget."

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