Precarious Markets? Not for U.S defense contractors

U.S. defense contractors are in steady waters while other economic…

U.S. defense contractors are in steady waters while other economic markets quiver.  Some of the largest manufacturers of defense products boasted increases in revenue earned throughout the 2007 fiscal year and are right on track to earn even more this year.  See Defense contractors offer safe haven in turbulent markets for more information and statistical breakdowns and return back to comment.

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  • Scottieg59

    This statement is no longer accurate. As with most industries, the defense industry has its economic cycles. Many will note that these cycles do not always follow the trends in the general economy. This makes the industry appear immune to forces in that toss the other industries around. The current trend shows defense contractors are on the ropes. Contracts are being made smaller as the federal government attempt to minimize outsourcing. Contracts are being broken up into smaller and easier to manage sizes with smaller businesses. Contract lengths are being made much shorter in duration. Government agencies are being directed to decrease their staff. The government contractor can no longer hope for stable employment with regular pay increases. In fact, some contract renewals include major layoffs and pay decreases for employees that remain. As the opportunities shrink, competition becomes more intense. This is compounded by the contracts becoming smaller and new players being advantages, such as Native American or minority owned companies.

    In summary, there are opportunities for success, however, the government contractor has to be flexible and always looking for new opportunities. They can never allow themselves to become comfortable and complacent. One should note that the drive to lower the significance of contractors in government did not just happen without warning. If you followed proceedings in Congress, you would see strong efforts around 2006 through today.

    One final note, as federal agencies meet staff reduction mandates, they are precluded from replacing lost positions with contractors. Those who remain will have to be flexible in what they do for their pay.