Future of Defense Employment

In the Nineties as the Cold War ended and the Clinton administrations adjusted the defense budget from the highs of Reagan and Bush '41 the defense industry saw major contraction. Both the Federal government and contractors shed jobs, closed facilities and realigned business. There was a wave of mergers among the companies as Lockheed and Martin Marietta became Lockheed Martin; Boeing absorbed McDonnell Douglas; and Northrop ate Grumman. Even companies with $1 billion in revenues were merged into others. The hope right now among contractors is that this won't happen again. The Press Enterprise in California writes about International Rectifier, a chip company, closing one plant and leaving another open . The one staying open relies primarily on defense work, the one closing the commercial side. If there is a significant downturn to the budget the first plant will also be threatened. Many of the larger companies, like Raytheon and L-3 believe there large backlog of defense work will protect their workers and revenue. Of course cancellation of several large programs, which is where Obama has focused on in his rhetoric, will like the Nineties significantly effect these companies and their workers. Cuts in quantities or shorter production runs will also affect existing systems. Again this happened in the Nineties. More to come as the defense budget is released and the world economic problems continue.