Can Defense Contractors Survive Peace?

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Overview

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.