America's defense industries have weathered the end of the Cold War, while retaining a strong military industrial base, concludes a new study by conservative economist Murray Weidenbaum.
"The U.S. defense industry is adjusting . . . far more rapidly and far more effectively than was generally expected," Weidenbaum writes in his new report "The U.S. Defense Industry After the Cold War."
While the transition has been painful, Weidenbaum said, "Nevertheless, today's national security decision-makers can count on the presence of a strong defense industrial base." But Weidenbaum cautions that problems remain, particularly the low funding of military research and development. He also argues, "Soft and marginal areas of (defense) spending must be eliminated - no matter the political cost - if any new expansions in military capability are to be seriously considered." Weidenbaum is chairman of the Center for the Study of American Business at Washington University. Weidenbaum credits the transformation to a hardheaded approach by defense executives to merge or sell off defense units "that were viable but not industry leaders." "General Dynamics sold its space systems to Martin and its tactical aircraft business to Lockheed. General Motors' Hughes subsidiary is selling its defense electronics activity to Raytheon, which has acquired Texas Instruments' defense unit," Weidenbaum said. …