Strike-one for the defense industry

By John Keller
Posted by John Keller

A week or so I wrote that economic hard times for the defense industry no longer are on the horizon; they're here.

In that blog, entitled "Military business slows to a trickle; now a matter of how hard things will get ," I pointed out three things to watch for to get a sense of how hard military business is going to be hit: the presidential election, sequestration , and the 2014 Pentagon budget request.

As for the first item, as you probably know by now, Barack Obama -- bringing his hostility to the military in general and for defense spending in particular -- has been re-elected president.


Obama is no supporter of military technology development, and his continued presence in the White House bodes ill for the defense industry. We're potentially heading down a slope that perhaps could lead to lows in defense spending that we haven't seen in nearly two decades, perhaps even longer.

Now we wait for sequestration, or across-the-board defense cuts of nearly half a trillion dollars over the next 10 years. The lame-duck Congress might do something th head-off sequestration, but it's not really in anyone's interest to do so -- except for the military and the defense industry.

Letting automatic defense cuts happen absolves anyone of blame for the results. It's a political gift from heaven, if you're in elected office. Sequestration will be the second strike.

Then we have the Pentagon's budget request next February for federal fiscal year 2014. That, perhaps, will be the clearest leading indicator of prospects for the defense industry in the near term. The proposed budget will help sort out winners and losers, and give the industry a hint of the military's long-term technology priorities.

We're in for a tough slog -- more dire than many have imagined. Over the next couple of years I predict program cancellations, major consolidation in the defense industry, and a noticeable abandonment of the military market by electronic component suppliers.

So what's it mean for us?

First, it means we have to dust off our boots and put our cowboy hats on straight. The defense industry in two or three years is going to look much different from how it is today.

Those who remain in the defense industry must push technological innovation to the limit to provide U.S. military forces with the most capable technology possible at the most affordable prices for the military's most pressing needs, like persistent surveillance and IED detection.

It's possible to do -- I've seen it before -- but it won't be easy, and it won't be painless. The last big defense downturn in the early 1990s during the Clinton Administration saw widespread implementation of commercial off-the-shelf technology or COTS.

No one ever had heard of COTS before then, and what we'll eventually see out of this defense downturn, well, no one's ever heard of what that will be, either. Before we get there, though, there will be casualties and pain.

Still, I'm optimistic that whatever comes out of this defense downturn, we'll be the better for. Remember, out of pressure and heat come things like hard steel and diamonds.

Previous Blog Posts

Capital Hill budget deal could restore tens of billions of dollars to the Pentagon

Tue Dec 17 13:15:00 CST 2013

Hacker drone story a cautionary tale about the need for unmanned vehicle data security

Tue Dec 10 09:46:00 CST 2013

Lack of money for systems upgrades threatens to maintain wind-farm radar dead spots

Tue Dec 03 10:36:00 CST 2013

Engineering support contracts indicate the Pentagon is sinking into the Mothball Strategy

Tue Nov 26 06:57:00 CST 2013

The revenge of COTS: an ageing commercial technology base complicates military supply chain

Tue Nov 19 08:53:00 CST 2013

Navy's newest destroyers evolve to fill traditional battleship roles

Tue Nov 12 11:54:00 CST 2013

International suspicions of U.S. encryption technology putting defense companies in a bind

Tue Nov 05 11:24:00 CST 2013

Defense industry left guessing as Army struggles forward with an unclear mission

Tue Oct 29 09:45:00 CDT 2013

These are tough times for the combat vehicle and vetronics industries

Tue Oct 22 04:22:00 CDT 2013

Is the government shutdown a harbinger of more ominous things to come?

Tue Oct 15 11:21:00 CDT 2013

Government shutdown reduces military contracting, increasing pressure on U.S. defense industry

Mon Oct 07 12:17:00 CDT 2013

Potential good news: has U.S. defense spending finally bottomed-out?

Tue Oct 01 13:02:00 CDT 2013

Is robotics revolution the first glimpse of a fundamental change in human evolution?

Tue Sep 24 09:46:00 CDT 2013

Obsolescent parts: are we enhancing military readiness or creating a hollow force?

Tue Sep 17 15:46:00 CDT 2013

For the high-tech warfighter, the future of electronics-laden uniforms is here

Tue Sep 10 11:26:00 CDT 2013

New generation of embedded computing thermal management in development at GE

Tue Sep 03 09:44:00 CDT 2013

Trading bus stops for credit cards: how far embedded computing has come in three decades

Tue Aug 27 10:59:00 CDT 2013

Unmanned vehicle industry stands at the doorstep of a fundamental transformation

Tue Aug 20 11:09:00 CDT 2013

AUVSI 2013, one of the biggest unmanned vehicles shows in the world, opens this week in Washington

Tue Aug 13 05:35:00 CDT 2013

The Washington Post, under Jeff Bezos, could lead the way for media in the 21st Century

Tue Aug 06 09:47:00 CDT 2013

Are costs and vulnerabilities making military leaders nervous about satellite communications?

Tue Jul 30 11:07:00 CDT 2013

Unmanned aircraft carrier that travels beneath the waves may be in the Navy's future

Tue Jul 23 05:20:00 CDT 2013

Electronic warfare programs kick into high gear with a flurry of contract activity

Tue Jul 16 08:03:00 CDT 2013

How vulnerable are U.S. Navy vessels to advanced anti-ship cruise missiles?

Tue Jul 09 07:03:00 CDT 2013

First came VHSIC, then came MIMIC, and now comes ACE to push electronics technology

Tue Jul 02 09:16:00 CDT 2013

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 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, @coho on Twitter, and on LinkedIn.

Mil & Aero Magazine

July 2015
Volume 26, Issue 7

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