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Selling Overseas To Make Up For Coming U.S. Defense Cuts

by: Matthew Potter
September 14, 2009

Category: Arizona, Bell, Brazil, Business Line, Companies, Congress, Countries, Department of Defense, development program, Events, Federal Budget Process, India, logistics, missile defense, production program, Qatar, Raytheon, Restructuring, Services, States, UAE | RSS 2.0

Arizona is a top beneficiary of defense dollars. This is primarily due to Raytheon and Bell activities in the state. Raytheon makes missile defense systems and Bell helicopters. Now with the possibility that Obama’s cuts to the defense budgets starting in 2010 and out the companies there are looking overseas for work.

Unfortunately this will be the business plan for all defense contractors if their is a significant contraction in U.S. defense spending. The focus will be on selling systems and support to Asian, South American and Middle Eastern companies. India, Brazil, the U.A.E. and Qatar have already made major investments in U.S. and European equipment and there are several major contracts coming. In 2008 the U.S. already captured two-thirds of the market but overall purchases were the lowest they had been since 2005. If this trend continues due to the global downturn in the economy there may be less opportunity for these sort of sales.

These trends may lead to further consolidation of the defense industry in the U.S. and abroad as domestic and foriegn markets may not be able to support the amount of business built up since 2001 primarily by the United States. This will be the most important factor facing the industry which has not seen this situation since the early Nineties and the end of the Reagan arms build-up.

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One Comments

  1. Raytheon Gets Two Significant Gulf State Contracts | Defense Procurement News on January 27th, 2011 3:21 am

    […] times turned to the U.S. for their needs. This is especially true in the area of missile defense. Overseas sales have become more important as the expected downturn in U.S. domestic defense spending will require expansion in other areas to […]

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