For U.S. defense industry, a golden decade comes to an end.

An F-35 Joint Strike Fighter, marked AA-1, lands Oct. 23…

An F-35 Joint Strike Fighter, marked AA-1, lands Oct. 23 at Edwards Air Force Base, Calif. The F-35 Integrated Test Force staff concluded an air-start test. On the side of the fuselage, the flags of the countries that financed the F-35’s development, in decreasing order of investment magnitude. Image: U.S. Air Force photo by Senior Airman Julius Delos Reyes

The wars in Iraq and Afghanistan are winding down, Osama bin Laden is dead, and the federal government is deeply in debt. This spells the end of what was a golden decade for the defense industry.

In the decade since the Sept. 11 attacks, the annual defense budget has more than doubled to $700 billion and annual defense industry profits have nearly quadrupled, approaching $25 billion last year.

Congress agreed last month to cut military spending by $350 billion over the next 10 years. The defense budget will automatically be cut by another $500 billion over that period if lawmakers fail to reach a deficit-cutting deal by November.

During the war in Iraq the military realized that it couldn’t protect troops from a low-tech, but potent threat: jerry-rigged road side bombs. In Afghanistan, commanders needed ways to find and root out insurgents that had tucked themselves in caves in hard-to-reach mountains.

These challenges led to new hardware. Among the most important:

– Transport trucks that protect troops and supplies from roadside bombs. Mine-resistant, ambush-protected vehicles, or MRAPs, quickly became crucial equipment for the Army. Oshkosh Corp., a maker of these trucks, was the 9th biggest military contractor last year. Before 9/11, it wasn’t in the top 20.

– Identification tools. Soldiers now carry small portable devices that identify a person by scanning fingerprints, irises and faces. These devices, made by L-1 Identity Solutions, which was recently acquired by Safran, can weigh as little as 3 pounds, transmit data by several different wireless methods and remember 1 million identities.

– Unmanned aircraft. General Atomics’ Predators, drones that can fire missiles, have killed several al-Qaida commanders. Lockheed Martin’s RQ-170 Sentinel reportedly kept watch on Osama bin Laden’s compound as the raid that killed him was taking place.

Source: Jonathan Fahey for the Associated Press via MSNBC.

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  • LW in UT

    $700B budget cut by $350B and then by $500B? So the military will pay $150B on its own. Nice math AP.