Raytheon chief bullish on defense

The U.S. defense market probably will stay strong for the next few years, even though the Pentagon eventually may have to rein in spending, Raytheon Co.'s chairman and chief executive said Wednesday.

CEO William Swanson said a combination of big U.S. defense budgets and supplemental war funds have staved off cutbacks for the time being. He declined to predict when the market might crest, but said any retreat in Defense Department spending will take time to make its way into the marketplace.

"There's a time lag between authorization and appropriation and funding," Swanson told reporters at an Aerospace Industries Association media briefing.

"Whatever's appropriated today has about a two- or three-year time lag on it. It's a while before you see a downturn actually start to happen," Swanson said.

Swanson is the aerospace trade group's 2007 chairman. He and association President John Douglass met with Washington reporters to discuss the group's lobbying priorities and industry outlook.

Douglass offered a similar take on market trends. He also said the civil market is likely to outpace defense growth for now, driven by Boeing Co.'s recent aircraft sales successes.

Export controls are one of the trade group's top agenda items. Defense companies want to streamline the export-review process and ease restrictions on commercial items that have both civilian and military uses. The aerospace trade group has backed a slate of industry suggestions for administrative reforms, while also hoping for a Congress-led overhaul after a new administration takes office.

The trade group also seeks an improved air-traffic-control system. Douglass warned that the U.S. air-travel system is overloaded and faces gridlock unless the Federal Aviation Administration gets a budget boost and moves forward with upgrades.

Raytheon, Lockheed Martin Corp. and other big U.S. companies are vying for work on new air-traffic-control systems and modernization efforts. (Dow Jones)