December 19, 2016

Defense companies must go on offense to prove their value

By Ben FitzGerald

Source: The Hill

Journalist(s) Dan Rene

In anticipation of changing leadership in Washington, the stock market has soared higher in recent weeks. Increasing optimism in an economic recovery is bringing more investment into the marketplace. For the most part, share price increases have taken place across the board, with especially notable increases in the banking sector and in the defense/aerospace industry.

It is evident that investors are expecting more Wall Street growth based at least in part on increased Pentagon spending. However, investors (who usually demand clarity before making financial decisions) may have acted too soon in rallying around those companies that have the Pentagon as its biggest (and perhaps only) customer.

Recent criticisms of Boeing and Lockheed Martin in tweets by President-elect Trump have started conversations that will lead to questions of the value these companies provide the taxpayer. This criticism has increased volatility of the share price, at least in the short term. While the value provided by defense contractors surely exists, the questions raised have placed these companies on the defensive – a disadvantaged position for any communicator.

Read the full article at The Hill.

  • Ben FitzGerald

    Former Senior Fellow and Director, Technology and National Security Program

    Ben FitzGerald was a Senior Fellow and Director of the Technology and National Security Program at CNAS. In this capacity, Mr. FitzGerald led CNAS efforts to explore...