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GlobalSecurity.org In the News

MARKETPLACE (6:30 PM ET) March 19, 2001, Monday



With the stock market in the dumps and the economy shifting into low gear, it may turn out that the best defense against a recession is, well, defense dollars. The Los Angeles Times reports that a new super-secret spy satellite program is in the works, the scale of which could eventually dwarf the Manhattan project. Boeing is overseeing the new program, but isn't saying much about the details. Other companies involved, including Raytheon and Eastman Kodak, are also mum. But as MARKETPLACE's Sarah Gardner reports, after a decade of defense downsizing, it appears the military's gravy train is quietly rolling into Southern California.

SARAH GARDNER reporting:

In the intelligence community, it's known as the Future Imagery Architecture project, a fancy name for what essentially will be the next generation of spy satellites. They'll be smaller, cheaper and harder to detect than the current crop, and reportedly they'll be able to take pictures of military installations all over the world, anytime, anywhere, whatever the weather. John Pike, director of GlobalSecurity.org, a defense policy firm in Alexandria, Virginia, has to estimate the cost, since the government's keeping it secret.

Mr. JOHN PIKE (Director, GlobalSecurity.org): Overall, you're probably looking at at least $ 1 billion a year for maybe the next two decades; $ 20 billion, $ 25 billion, as much as the United States spent on the Manhattan Project that built the first atomic bomb back there in World War II. This is a lot of money, and by any measure, this is the largest single contract the intelligence community has ever awarded.

GARDNER: And much of that money will be spent in Southern California, where at one time aerospace dominated the economy, along with the movie business. It all fell apart in the recession of the early '90s when over 160,000 aerospace jobs disappeared. Congresswoman Jane Harman, who won't comment on John Pike's cost estimates for the program, says only that it will mean lots of new jobs at a time when many employers are scaling back, and many of those jobs will be in Harman's district in LA's South Bay.

State Representative JANE HARMAN (California): The defense core business has shrunk since 1992, and we're never going to regrow it the way it was. That's OK. The good news is the industrial base in the South Bay has diversified. A lot of the folks, even the same firms that were defense dependent, now are not. And we now have the plum of intelligence assignments coming our way. That's pretty darn good news.

GARDNER: The National Reconnaissance Office, or NRO, which is funding this project, says the size and cost are classified.

BRANCACCIO: MARKETPLACE's Sarah Gardner reporting from Los Angeles.

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