It's natural that defense industry executives would flatter William J. Perry, President Clinton's new nominee for defense secretary, since Perry holds sway over their fate.

But two days of interviews with captains of commerce suggest they feel the same way about him as they would about some combination of Lee Iacocca, Sun Tsu and Albert Schweitzer.

Deputy Secretary Perry, a former business executive, scientist, Carter-era Pentagon official and national security theorist, is regarded by defense company officials interviewed as a superb manager. They think he understands both the complex technology of modern weaponry and the precarious financial state of Pentagon contractors losing work in the post-Cold War age.

"He understands both swords and plowshares," said Martin Marietta Corp. Chairman Norman Augustine. "In these days of defense conversion, that's a good attribute ... If there's one thing you'd want in a defense secretary he doesn't have, it's two terms in the Senate ... but he'll handle it."

It is not, business officials say, that they think he'll save them from budget cuts yet to come. Rather, they're relieved it is he wielding the blade because they trust his judgment.

"When cuts must be made, he cuts with a scalpel, quick and decisive," said Paul Kaminski, chairman of the Pentagon's Defense Science Board and for seven years Perry's partner in a California investment banking firm. "He doesn't shy away from tough action."

"He's highly regarded in industry not because he's pro-industry," said Malcolm Currie, chairman emeritus of Hughes Aircraft Co., "but because he understands their problems ... He's brilliant, and he has more hands-on management experience than any defense secretary in the recent past."

In and out of government, Perry has pressed initiatives the industry considers crucial to its survival: streamlining burdensome military acquisition rules; steering weapons maintenance and upgrade work to private businesses instead of military depots; and funding some high-tech weapons, such as submarines, not needed for military reasons but to maintain the U.S. ability to design and manufacture them.

The Reagan and Bush administrations forbade assistance to defense companies, calling it "industrial policy" that picks corporate winners and losers.

But Perry designed a Clinton administration policy to ensure survival for some distressed defense firms whose technologies are key to national defense. General Dynamics Corp.'s submarine and tank divisions are two beneficiaries.

"This is not a bailout," Perry said last year of such efforts. "I explicitly reject the idea of sustaining a defense company just to keep it in business. We're not doing it to save jobs or help shareholders. We expect defense companies to go out of business. We will stand by and let that happen."

At the same time, Perry says cuts must be planned so that, if and when the United States must rearm, military contractors are still alive. He peppers speeches with references to the U.S.'s "surge" of production in World War II, when American plants turned out 88,000 ships, 102,000 tanks and 296,000 planes.

Perry is ramming through the Pentagon's bureaucracy proposals to dismantle generations of cumbersome regulations -- requiring hundreds of pages of instructions to build a simple widget.

"Milspec" (for "military specification") forces defense firms to build gear, at great added expense, to arcane dimensions not used elsewhere. If Perry ends milspec, firms could sell the Pentagon the same cookies, spatulas and computers sold commercially, and, as in World War II, all of U.S. industry -- not just defense firms -- could gear up for war.

Perry pushed these and other ideas as a board member of many defense firms and Pentagon advisory groups, and as co-director of Stanford University's Center for International Security and Arms Control.

With a PhD in mathematics, Perry in 1964 launched ESL Inc. from his Palo Alto, Calif., home. Specializing in the complex math of computers that interpret electronic signals, the company worked for the super-secret code-breaker, the National Security Agency.

Perry sold his interest in 1977, when he became the Pentagon's technology chief. There he heard about a remote idea -- "stealth" or radar-evading jet technology -- and forced it on a reluctant Pentagon. Stealth jets such as the F-117A helped win the Persian Gulf War.

Perry also arranged technology-sharing deals among U.S., European and Japanese defense firms that saved all of them money. He represented the United States at angry public meetings out West on proposals to place MX missiles in hidden underground tracks.

In 1981, Perry joined Hambrecht & Quist Inc., a San Francisco investment banking firm. In 1985, he left to form Technology Strategies & Alliances, which works in the same area, advising high-tech firms on deals, both in the United States and overseas. He helped Lockheed Corp. on an audacious deal: joining with a troubled Russian enterprise to market globally the Russians' powerful Proton rocket.

"He knows Russia as well as anybody in government," said Lockheed Chairman Daniel S. Tellep. "Bill brings a highly evolved and unique blend of competencies. He knows academia, venture capital, defense procurement, technology, military force structure and the international scene."

Perry's friends say he is intensely focused, but almost never loses his cool, and has a low-key, gentle style.

"He listens to the body language as well as to the spoken," Kaminski said. "He's one of the most remarkable people I've ever known."