The Return of Mac the Knife?

Highlights include Northrop Grumman (NOC - Analyst Report), Textron (TXT - Analyst Report), Ceradyne (CRDN - Snapshot Report),  Force Protection Industries (FRPT), General Dynamics (GD - Analyst Report), L-3 Communications (LLL - Analyst Report), Lockheed Martin (LMT - Analyst Report) and  Navistar International (NAV - Analyst Report).

Back when John Kennedy was President, his Secretary of Defense was Robert McNamara, who some dubbed “Mac the Knife” because he cancelled the B-70 Bomber and the Skybolt Missile (my first project) and opposed a proposed ABM program.

Now, we have another Democratic administration with a not-quite so new Secretary of Defense -- Robert Gates -- who appears to be intent on terminating a number of programs, including the Air Forces’ F-22, the Army’s Future Combat Systems program and the Navy’s newest destroyer, and apparently does not support the missile defense system proposed for deployment in Europe.

Interestingly, Secretary Gates supports the F-35 multi-role fighter, while McNamara pursued an earlier multi-role fighter, the F-111 (which didn’t quite make it when it came to carrier landings). Does this not seem in some ways like déjà vu all over again?

There are some notable differences, however. Secretary McNamara was confronting the “Red Peril” from the USSR, et. al., and the MAD doctrine -- Mutually Assured Destruction -- seemed to work; Secretary Gates, on the other hand, is concerned with engaging in what is now euphemistically referred to as “unconventional warfare,” where the opponent’s goal is MAD (of course, there may be some parallels here with the past conflict in Viet Nam).

The gist of all this is that the U.S. is now faced with fighting an almost invisible foe, which doesn’t lend itself to the use of advanced manned aircraft or the like equipment; this, for all intents and purposes, is now hand-to-hand combat: ”mano-a-mano.”

Consequently, we are now in the era of the UAVs and MRAPs -- unmanned aerial vehicles and mine-resistant ambush-protected vehicles. With respect to UAVs, there are a few main players right now, including Northrop Grumman (NOC - Analyst Report), General Atomics (which isn’t a public company), and AAI Corp., which was acquired by Textron (TXT - Analyst Report).

On the other hand, there are a slew of companies pursuing the MRAP (and related) business, including: AM General (the manufacturer of the Hummer; not a public company), BAE Systems (which includes Armor Holdings/Stewart & Stevenson), Ceradyne (CRDN - Snapshot Report), Force Protection Industries (FRPT), General Dynamics (GD - Analyst Report), L-3 Communications (LLL - Analyst Report), Lockheed Martin (LMT - Analyst Report) and Navistar International (NAV - Analyst Report), which also manufactures International trucks, Oshkosh Truck (OSK - Snapshot Report) and, again, Textron (TXT - Analyst Report; owns Cadillac Gauge).

Let the battle begin!

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