Defense Spending Cuts Don’t Include Drones (BA, LMT, NOC)

When US Secretary of Defense Leon Panetta discusses projected cuts to the US defense budget later today, he is expected to talk about a leaner military with fewer people and fewer expensive gadgets. One item that is expected not only to remain but to see significant growth is the drone, an unmanned aircraft that carries missiles and other weaponry that can remotely targeted.

Major drone manufacturers include Boeing Co. (NYSE: BA), Lockheed Martin Corp. (NYSE: LMT), and Northrup Grumman Corp. (NYSE: NOC).

Also set for growth are forces similar to Navy Seal Team 6, which recently rescued two hostages in Somalia and carried out the raid that killed Osama bin Laden last year. The US Army is set to be reduced from an active duty force of 570,000 to 490,000.

The cuts and the increase in special operations forces reflect the shift in emphasis that the Obama administration is putting on US defense forces, away from traditional military units and toward more mobile and highly trained special troops and equipment.

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