Chapter 13: Defence industries
Keith Hartley INTRODUCTION: AN INDUSTRY RESPONDING TO CHANGE Following the end of the Cold War, the 1990s was a period of major change for the defence industries in Europe, the USA and the former USSR. Disarmament led to smaller armed forces and a reduced demand for equipment (weapons) reﬂected in the cancellation of new projects, a ‘stretching’ of development programmes and smaller production orders. Defence industries responded to disarmament with job losses, plant closures, a search for new markets (for example arms exports; diversiﬁcation), mergers and exits from the industry. The US industry responded with a series of major mergers, especially in the aerospace industry where 22 ﬁrms in 1990 were consolidated into four large companies by 1997. The ‘big four’ US defence and aerospace companies were Boeing, Lockheed-Martin, Northrop Grumman and Raytheon. Larger American companies able to obtain economies of scale and scope represented a major competitive threat to Europe’s defence industries. As a federal state, the USA has a single army, navy and air force which provides a large national market for its defence industries. In contrast, the member states of the European Union (EU) each provides its national armed forces and supports a small-scale national defence industry. However, the EU is committed to developing a Common European Security and Defence Policy (CESDP). By the late 1990s, this policy had resulted in two new initiatives. First, a commitment to create an EU Rapid Reaction Force of 50–60000 troops by 2003. This force will be available...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.