Can Defense Contractors Survive Peace?

September 29, 1989

Report Outline
Special Focus


After an unprecedented decade of boom, America's defense contractors are facing an uncertain future. Reduced tensions between the superpowers have teamed up with pressing economic imperatives on both sides to make cuts in defense spending seem inevitable for the 1990s. Some of the arms makers are finding ways to meet the challenge, but others may fall by the wayside.

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Viewers of prime-time television in the Washing ton, D.C., area were treated to some unusual advertisements this summer. Interspersed among the pitches for late-season auto sales and wine coolers were spectacular views of warplanes climbing through the clouds and gravely worded pronouncements on the need to secure the national defense.

The advertisers, including Grumman Corp. and McDonnell Douglas Corp., were hardly household names to most viewers. Indeed, their advertisements did not run long enough for their message to get across to many. But that did not matter, because they had only one target in mind: members of Congress, The defense spending boom of the 1980s—Ronald Rea gan's program to “rearm America” through the biggest peacetime military buildup ever—seemed to be over. Congress, facing another huge budget deficit and requirements that it be reduced, was searching for ways to trim billions of dollars from the defense budget for fiscal 1990, which would begin Oct. 1. The advertisers wanted to protect their share.

ISSUE TRACKER for Related Reports
Defense Spending
Nov. 03, 2017  Military Readiness
Sep. 07, 2001  Bush's Defense Policy
Jul. 30, 1999  Defense Priorities
Sep. 29, 1989  Can Defense Contractors Survive Peace?
May 17, 1985  The Defense Economy
Apr. 16, 1982  Defense Spending Debate
Oct. 10, 1980  Defense Debate
Apr. 12, 1974  Peacetime Defense Spending
Sep. 24, 1969  Future of U.S. Defense Economy
Oct. 26, 1966  Defense Spending Management
Feb. 19, 1964  Arms Cutbacks and Economic Dislocation
Jun. 10, 1953  Defense Spending and Reorganization
Jan. 18, 1950  Civil Defense
Nov. 03, 1948  Atlantic Security and American Defense
Defense Industry