The Pentagon sent a new wave of jitters through Maryland's defense industry yesterday when it announced that it would cut or delay several major weapons programs, including the Air Force's F-22 "stealth" fighter plane and the Army's Comanche attack helicopter.
In announcing the proposed cuts, Defense Secretary William J. Perry said they were designed to save $7.7 billion over six years.
While cuts of this magnitude will undoubtedly be felt in Maryland -- the fifth most Pentagon-dependent state in the nation -- the announcement had some of the state's corporate executives breathing a sigh of relief yesterday.
It could have been much worse.
"It's good news for us," said G. Russell Zink, vice president of business development at AAI Corp. in Cockeysville. Mr. Perry's proposal keeps alive development of a new Marine Corps amphibious assault vehicle, a key project for AAI, although the program would be delayed for two years. Four months ago, a Pentagon memorandum from Deputy Defense Secretary John M. Deutch called for the program's cancellation.
Linthicum-based Westinghouse Electronic Systems issued a statement saying that it expects the new Pentagon proposal "to have minimal impact on employment levels in Maryland operations.
At Bethesda-based Martin Marietta Corp., which has a plant in Middle River, a spokesman said it was too early to tell what the local impact would be.
"We don't know what Congress is going to do," Charles P. Manor said.
For the Pentagon, the largest cuts announced yesterday were the cancellation of the Tri-Service Standoff Attack Missile, a radar-evading weapon built by Northrop Grumman Corp., and the indefinite postponement of the Army's Comanche helicopter, developed by United Technologies Corp. and Boeing Co., after the completion of two flyable prototypes. Each action is expected to save $2.1 billion.
Mr. Perry called his budget proposals "prudent" and said "they will not interfere with our efforts to develop the new wave of weaponry needed for the 21st century." He also pointed out that the reductions are much less severe than those called for under the so-called Deutch memorandum, which anticipated up to $20 billion in cuts.
The defense secretary said the new cuts were also softened by President Clinton's announcement last week that he plans to boost defense spending over the six-year period by $25 billion to enhance military readiness and to give military personnel pay raises.
Other significant announcements yesterday:
* A reduction in research and funding for the F-22 fighter, expected to save $200 million. This is the Pentagon's biggest program, valued at about $70 billion.
The plane is built by Boeing and Lockheed. The latter haagreed to merge with Martin Marietta.
* A delay of one year, until 2002, in the start of work on a new Navy attack submarine, saving $1.5 billion.
* A cut in production, from 18 to 16, of the Navy's DDG-51 Aegis destroyers, also saving $1.5 billion.
* Leaving largely untouched plans for the Marine Corps' V-22 tilt-rotor troop transport, which takes off like a helicopter and flies like an airplane. The decision to proceed with the $30 billion Osprey program is a victory for Boeing Co. and Textron Inc., which are developing the transport.
Many of the proposals appear likely to reduce orders at defense plants in Maryland. Martin's Middle River plant makes a rocket-launching system used on the Aegis, and Westinghouse workers in Sykesville build an electronic system for the destroyers that detects enemy submarines, tracks their movements and guides an assortment of weapons.
Westinghouse also makes the radar for the F-22, and the company has called it a huge contract that it is counting on to maintain its employment base. Yesterday's announced two-year delay was something of a reprieve -- the Deutch memo had suggested putting it off for four years.
There was no such silver lining for the Comanche program. Westinghouse builds an assortment of electronics for the helicopter, and the company yesterday called the deferral a disappointment but not a surprise. Softening the blow for the company is its participation, along with Martin Marietta and other companies, in a new Comanche technology program that is being funded with about $2 billion, about half the value of the original program.
For AAI Corp., the delay of the Marines' amphibious assault vehicle for two years will give the company's engineers more time to refine their design and boost their chances of winning a production contract, Mr. Zink said. The Baltimore County company is teamed with United Defense Corp. to develop the vehicle.