Drastic reductions in resources pinch any organization, and DoD is no different. Rather than making draconian cuts to force structure and troop benefits, DoD has instead historically chosen to reduce its procurement budget by prolonging the shelf-life of existing platforms, stretching out new acquisition programs, and purchasing fewer new units of equipment than it had originally intended. If the defense industry is to thrive in such a challenging environment, it will need to look abroad for new markets. American defense contractors are aware of the history of defense draw-downs, and are examining the best ways to weather the fiscal storm. Last November, Boeing announced major layoffs in its defense division, citing declining defense spending.4 This comes after public concerns from several other corporations regarding reduced spending and its implications for industry.5 Complicating matters is the lack of diversity in the revenue streams of large American defense contractors. Four of the five largest American companies in the defense business generate more than three-quarters of their revenue from the defense sector, leaving them vulnerable to declines in government spending.6 A healthy defense industrial base is vital to America’s ability to project power and protect interests globally. Although further cuts to defense budgets will almost certainly mean additional reductions to the defense industry’s workforce, infrastructure, and operational capability, it is in the interest of America’s economic and national security that this pillar of domestic industrial capacity does not wither. It will help ensure American competitiveness in science and technology development and make sure that the platforms necessary for waging future wars are designed, developed, and manufactured domestically. A robust industrial base also means protecting jobs and infrastructure at home, which is particularly important in today’s economic climate. To protect domestic industrial capacity and strengthen strategic relationships globally, industry and government should work together to develop inexpensive platforms designed and constructed with the budgetary realities and tactical requirements of foreign governments in mind. By developing export-ready platforms, the U.S. defense industry will generate new incentives for foreign governments to buy American.
Rather than making draconian cuts to force structure and troop benefits, DoD has instead historically chosen to reduce its procurement budget by prolonging the shelf-life of existing platforms and purchasing fewer new units of equipment than it had originally intended. If the defense industry is to thrive in such a challenging environment, it will need to look abroad for new markets American defense contractors are examining the best ways to weather the fiscal storm Complicating matters is the lack of diversity in the revenue streams of large American defense contractors. Four of the five largest American companies in the defense business generate more than three-quarters of their revenue from the defense sector, leaving them vulnerable to declines in government spending A healthy defense industrial base is vital to America’s ability to project power and protect interests globally it is in the interest of America’s economic and national security that this pillar of domestic industrial capacity does not wither. It will help ensure American competitiveness in science and technology development and make sure that the platforms necessary for waging future wars are designed, developed, and manufactured domestically By developing export-ready platforms, the U.S. defense industry will generate new incentives for foreign governments to buy American