Defense industry management is a smart business or not
The army forces of America are seeking acceptance for pentagon to mix up in their defense industry to strengthen their force and protect them from collapses happen imminently. But the funds issue is the challenge to get this and they are dried for the big ticket program. Many of their suppliers for defense equipments into military have been shoved off the proverbial cliff.
Major contractors of pentagon weapons are suggesting that into repeat the situation held at the time of World War 2 and can manage American defense industry for making weapons and make sure that the required critical skills and possibilities won’t dried in future.
Such type of situations occurred in the defense industry and pentagon has shown its energy to pick winners and losers. This has been set to very comfort with an approach called laissez-faire. Next to the cold war the defense industry has step out for 5 years and willing to consolidate from contractors. Finally the government had drawn a line in 1997 and when merger has stopped from industry giants.
There are certain policies from industry which are mandatory but the administrators have ignored them. Particularly when government posed that to manage private sector which got laughed off like Stalin five year plan for grandiose at post-Reagan era.
Whereas present situation are like ringing bells as alarm for military to get wind down for wars and prepares for spending which is restrained. Defense industry has ability to resize its market and policy makers of defense industry assumed this and changed their competitiveness and demand but this not the way how it should work.
Even though, the specialized and legacy suppliers of defense industry are making profits but they are under extensive pressure from shareholders in making money. Analysts are expecting that investors for defense industry players might escape when they predict bottom falling in market. There are certain signs that stock market is reacting and the defense industry of U.S. is now less worthy than Google. From the point of an expert in defense industry that it is not having a headroom growth in future. If this analysis is correct then the pentagon can lose their key suppliers.
This can be fixed with the help of programs, If pentagon is ready to secure the talent of specialized engineering said by Barry Watts. The estimated cost to maintain a design team for combat aircraft which is advanced is $100 million per year. But this cant lucrative for mass production deals, it only keeps designers employed.
They call it as best practices rather than industrial policy. It is rather simple but the business must be smart and have to sustain smart business practices that are to be considered by pentagon. Don’t call it as industry policies simply.