Musings on the schizophrenic defense market

By John Keller

Posted by John Keller

Plenty of things are happening these days to put a chill on the defense technology market. We have an election coming up with vastly uncertain prospects; military forces are still operating in Iraq and Afghanistan, yet a substantial force draw down is due very soon; and many ordinary citizens are getting sick of the Iraq war and are hungry for peace.

There's a sense that those in charge of U.S. military procurement are holding their collective breath until they get some solid indication of how the political winds are blowing.

If a Democrat is elected president this November, the procurement folks are worried that spending could start drying up . If a Republican is elected, on the other hand, it's likely that defense spending cuts might not be so deep as they would be under a new Democrat administration, but people seem to know in their guts that defense spending going forward will not be what it has been during the early years of this decade. A sense of foreboding is in the air.

This level of uncertainty is having a paralyzing influence on long-term planning in the defense industry. Overall, there is neither momentum nor clear direction on where defense spending is headed, and this holding pattern is likely to remain at least through the fall elections.

There are some sectors of the defense technology business, however, where uncertainty has a wholly opposite effect . Some people, in fact, tell me they can't keep up with orders these days.

What the heck is going on?

For some defense sectors -- particularly those involved with technology repair, replenishment, and some upgrades -- there is a strong sense of urgency to spend the money they have as quickly as they can in case the fall elections cause money to dry up.

I spoke to the manufacturer of housings for night-vision weapon sights who told me he can't make his products fast enough to meet demand. The reason for this, he says, is program managers who have money for repair and replenishment are spending it as fast as they can.

It almost feels like a group of warriors the night before battle, who raise their glasses in a toast to "eat, drink, and be merry, gentlemen, for tomorrow we may die."

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The Mil & Aero Bloggers

John Keller is editor-in-chief of Military & Aerospace Electronics magazine, which provides extensive coverage and analysis of enabling electronic and optoelectronic technologies in military, space, and commercial aviation applications. A member of the Military & Aerospace Electronics staff since the magazine's founding in 1989, Mr. Keller took over as chief editor in 1995.

Ernesto Burden is the publisher of PennWell’s Aerospace & Defense Media Group, including Military & Aerospace Electronics, Avionics Intelligence and Avionics Europe.  He’s a father of four, a runner, and an avid digital media enthusiast with a deep background in the intersection of media publishing, digital technology, and social media. He can be reached at ernestob@pennwell.com and on Twitter @aero_ernesto.

Courtney E. Howard, as executive editor, enjoys writing about all things electronics and avionics in PennWell’s burgeoning Aerospace and Defense Group, which encompasses Military & Aerospace Electronics, Avionics Intelligence, the Avionics Europe conference, and much more. She’s also a self-proclaimed social-media maven, mil-aero nerd, and avid avionics geek. Connect with Courtney at Courtney@Pennwell.com, @coho on Twitter, and on LinkedIn.

Mil & Aero Magazine

February 2014
Volume 25, Issue 2
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