24/7 Newsfeed

Put Reason 24/7 on Your Site


Follow Reason 24/7 on Twitter and via RSS

Defense Contractors Wait to Hear About Budget Cuts

Kratos Defense & Security Solutions Inc. in July bought a company that makes drones used for military target practice. Then the contractor put further acquisitions on hold.

With Washington’s budget impasse threatening $500 billion in automatic defense cuts over a decade, Kratos’s chief executive officer said the firm didn’t know where to place its bets. In the past year, the maker of security and surveillance systems has also halted equipment upgrades and trimmed research spending.

“Guys like us are going to hold a good portion of their cards until there’s some budget clarity,” Eric DeMarco, the company’s CEO, said in a telephone interview.

Military suppliers already have been preparing for a leaner decade by stockpiling cash, cutting jobs and slowing spending.

Source: Bloomberg. Read full article. (link)

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.