Business is booming for most of the defense contractors of this country and will stay that way under President Carter.
This is the view from the executive suites of the aerospace industry as well as from the cubicles of the Commerce Department where analysts have been going over the sales figures on planes, ships, missiles and tanks.
The picture of Carter fueling a boom in the defense industry while calling for austerity on other government spending is expected to heat up "the great debate" which opens in earnest this week as the president unveils his new budget.
Sen. Edward M. Kennedy (D-Mass.), chairman of the Senate health subcommittee and a possible challenger to Carter for reelection, already has signaled that the butter vs. guns debate will be intense by assailing the president for not moving faster on national health care.
Bigger-than-ever peacetime military budgets, foreign nations buying American weapons, and airlines ordering new passenger planes, which defense contractors make, have brought in this new era of prosperity.
"Business hasn't been as good as this since the late 1950s and early 1960s" when the United States was rushing to deploy intercontinental ballistic missiles and airlines were buying lots of new planes, said James W. Beggs, executive vice president of General Dynamics, in an interview at corporate headquarters in St. Louis.
Aerospace companies will sell $47 billion in planes, missiles and other gear in 1979, predicts the Commerce Department's Bureau of Economic Analysis. This would be a stunning 20 percent increase over 1978, which was also a good year for the feast-and-famine defense industry.
These golden days can fairly be ascribed, at least in part, to Carter. He inherited a big defense budget, then, in contrast to his election campaign statements, made it bigger.
"Without endangering the defense of our nation or our commitments to our allies,"candidate Carter wrote the Democratic Platform Committee on June 10, 1976, "we can reduce present defense expenditures by about $5 to $7 billion annually." He has since committed himself to increasing the defense budget by 3 percent annually after allowing for inflation. *tCarters fiscal 1980 budget -- the one going to Congress on Monday -- will call for spending about $126 billion on defense compared to the $96 billion (108.7 fiscal 1979 dollars) spent in fiscal 1976 when Carter called for cutting military spending.
This year's bullish forecasts of defense contracts are tempered by predictions of a backlash to foreign weapons sales in the wake of the debacle in Iran.
The shah was allowed to by almost any non-nuclear weapon he wanted from the United States, including 30 highly sophisticated Navy F14 fighters, but was toppled without using any of them. Some defense executives conceded that the heavy presence in Iran of American weapons and technicians may have helped fire up the dissidents. They reasoned that the Carter administration may therefore be more reluctant in the future to approve overseas sales of weaponry.
Although the Pentagon insists that the Iranian government has not yet canceled any orders of American weapons, that step is considered inveitable by many defense contractors.
The other shadow defense contractors see on their otherwise bright picture is an over-abundance of weapons in development. There will not be enough money to put many of them in production when that expensive step comes, several contractors said, so some firms will be hurt by cancellations.
One defense firm that is particularly solid these days is McDonnell-Douglas, which ranked first in fiscal 1977 in prime contracts awarded by the Pentagon, with $2.57 billion. The Washington Post interviewed executives at McDonnell-Douglas and several other defense firms about this new era of prosperity for aerospace.
In one vast assembly plant at the edge of St. Louis airport, McDonnell-Douglas is turning out the F15 Eagle fighter for the Air Force and the F18 Hornet fighter for the Navy.
McDonnell-Douglas also: is the sole source for the gadgetry that guides the cruise missile to its target; is sure to sell millions of dollars of both military and civilian cargo and tanker aircraft in the future; has a record high backlog of orders, $8.6 billion.
"We feel comfortable for five years," said Robert Little, McDonnell-Douglas vice president for marketing and engineering. The firm is split about 60-40 between government and commercial business, with the DC9 and DC10 passenger liners the stalwarts of the latter.
Less than 10 miles from the sprawling McDonnell-Douglas plant is the headquarters of another giant defense firm, General Dynamics.
"We're as well positioned as anybody in the business," said Beggs of General Dynamics. He said that the firm's F16 is the light fighter of the future; that the Tomahawk cruise missile stands to bring in billions of dollars in new orders, and that the Army battlefield missiles, like the Red Eye antiaircraft missile, and Navy antiair craft missiles fit right in with Carter's commitment to beef up NATO forces.
General Dynamics' Electric Boat division is also getting billions to build the new Navy, with contracts for the nuclear-powered Trident missile submarine and Los Angeles class attack submarine.
"Our sales curve has been rising," said Beggs. "I expect it to continue to increase for the foreseeable future."
Out on the rainy flatland around Seattle, Boeing executives in the firm's offices scattered all around the city talked prosperity, too.
Oliver C. Boileau, president of Boeing's aerospace division, said the firm is working on a broad range of weaponry which the Pentagon will spend billions on sooner or later, including the air-launched cruise missile -- which Boeing already is flying in test versions -- and new strategic missiles. Boeing manufactured the Minuteman ICBM and stands an excellent chance of getting contracts for the MX, the missile the Air Force hopes to produce to replace the Minuteman.
In addition, Boeing's commercial planes will keep the corporation prosperous for years. Boeing sold $11 billion in commercial liners in 1978 and will have "another good year" in 1979, according to O. M. (Rusty) Roetman, international sales director.
To the south, in Burbank, Calif., even Lockheed reports robust health after being the sickest aerospace company, having to obtain a $250 million loan guarantee from the U.S. government in 1971 to stay in business.
Lockheed is turning out a new version of the U2 spy plane called the TR 1 for tactical reconnaissance, getting millions for submarine missiles, including the new Trident, and is optimistic about additional Navy anti-submarine aircraft contracts and Air Force orders for new transports to succeed the company's C130 workhorse.
Said William R. Wilson, Lockheed's senior vice president for project development: "We're well positioned. We've got the largest backlog we've ever had.We're in the strongest position we've been in since the mid-1960s."
Executives at Northrop Corp., in Century City outside Los Angeles, joined their competitors in predicting boom times for international weapons sales. "There's a big, legitimate market for the kinds of things we do," said Robert Gates, Northrop's international sales director.
Aerospace industry employment will climb, the Commerce Department predicts, from 585,000 jobs in 1978 to 627,000 jobs in 1979.
Although most defense contractors are flying high a few are still close to crashing economically. There simply is not enough defense business to go around, even with record high peacetime military budgets. Vought, Grumman and Fairchild were described by aerospace executives as "the sick men" in the otherwise healthy defense industry.
To keep those companies alive, senators and representatives will press for fresh transfusions of Carter's defense money -- another dimension of this year's battle of the budget.