Defense firms hope for protector like Kennedy

BOSTON (Reuters) - Among the quietest yet most closely served constituencies of the late U.S. Senator Edward Kennedy was the defense industry, which is hoping for a like-minded successor.

With his seat on the Senate Armed Services Committee now vacant after Kennedy's death late on Tuesday, various programs could face cuts if his replacement does not take a similar interest or wield as much influence as Kennedy did in the industry's favor, defense analysts said.

"It is obvious he has been a big protector" of New England defense firms, said Owen Cote, a security specialist at the Massachusetts Institute of Technology. "No doubt the second engine for the F-35 wouldn't be alive without him."

Cote was referring to a fighter jet engine made by a joint venture of General Electric Co and Rolls-Royce at GE's plant in Lynn, Massachusetts, which employs several thousand people.

The engine is meant to compete with a similar product from United Technologies Corp and faces further negotiations in Washington this autumn on whether it will be funded.

GE spokesman Rick Kennedy predicted the money will still win passage. "Fortunately we have broad support from people Kennedy influenced" in favor of the engine, he said.

Under state law, Massachusetts Governor Deval Patrick may not select a successor to Kennedy but must call a special election between 145 and 160 days after the seat comes open.

Though known as a dove on foreign policy, Kennedy's efforts on behalf of New England defense contractors and military bases helped cement his local popularity.

The industry is a big economic driver in Massachusetts. According to a University of Massachusetts study, defense spending totaled $9.2 billion in 2005 plus another $5.5 billion in indirect spending, accounting for 4.6 percent of the state's gross domestic product.

STAFF HAD TIES TOO

Like most of his colleagues, Kennedy often trumpeted his work on behalf of contractors: A 2007 press release with fellow Senator John Kerry describes funding for $777 million worth of projects in Massachusetts including $208 million for Raytheon Co's Patriot missile system and $2.8 million aerial drone equipment for a division of Textron Inc.

Moreso than Kerry, however, Kennedy's long history in Washington made him the man to see for defense deals, said one industry lobbyist, speaking on condition of anonymity because of commercial sensitivities.

"It helps when one of your friends has been on the (Armed Services) committee for decades," the lobbyist said.

Kennedy's close ties to companies also extended to his big staff. Former Kennedy aide William Lynn later became a top lobbyist for Raytheon, headquartered in Waltham, Massachusetts, and in February, was confirmed as the Pentagon's second-ranking official despite complaints he remained too close to Raytheon.

Raytheon did not respond to questions about its outlook without Kennedy in Washington. But it issued a statement expressing sympathy for Kennedy's family and stating that his support "...helped Raytheon, and its hundreds of suppliers in Massachusetts and neighboring states, continue to grow."

(Editing by Cynthia Osterman)