This Spring I was attending a training program with some military and government folks. One of the guys mentioned the impending Combat Recession. It was the terminology he used to describe the shrinkage we are all experiencing in defense. As the war comes to a close, spending is getting tight. If the budget tsunami that is sequestration hits, I don’t know if ‘recession’ will be a strong enough word.
Seems like a lot of folks have forgotten about those antebellum days when there wasn’t nearly as much money in defense. For the defense industry, these past ten years haven’t been just shooting fish in a barrel, the fish would literally jump into the boat, ask you to eat them and then clean themselves. But, those days are over. Some will adapt, others will fall.
One of the topics I will be exploring during these next two days at the Association of the United States Army’s annual meeting is how industry is adapting to this Combat Recession my friend spoke of.
Yesterday, another industry friend sent me a text from the show floor. It said in part, “What is happening at AUSA today is the Conventional Industry’s Zombie Apocalypse…” The floor is bereft of green suiters and it is leaving many vendors uneasy. Unfortunately, this year’s annual meeting is victim to a perfect storm of an Army weary of fighting in Afghanistan, impending budget sequestration and worst of all, fallout from the recent excesses by GSA. By all accounts, travel to AUSA on orders was severely restricted. No wonder it was so easy to find a hotel near the convention center.
I look forward to getting even more insight as I walk the floor today and tomorrow.
You will soon start to see many of these companies begin to introduce more commercial product lines in light of this.
Canadian Bacon had the solution.
From a european stand point, for the last 2-3 years we’ve been seeing a north american industry suddenly much more interested in what was going on on the other side of the ocean.
I’m happy with that, but then again I’m an attention whore.
Yeah, suddenly a lot of US companies looking for “Euro-customers”. Light Infantry and SOF units will have a good upgrade on their budgets the next 2 or 3 years due to the situation in North Africa.
The Combat Recession is really nothing new. The DOD had a significant budget reduction in the 90s called the “Peace Dividend” as a result of the collapse of the Soviet Union. Talk of another “hollow force” and other descriptions are a bit overblown. This will not be a post-Viet Nam downsizing. Yes, there is going to be significant downsizing and the impact to the industrial base, be it PPE, ships or aircraft, will be severe. However, we survived the “peace dividend” of the 90s and will do so again. Our capabilities are better than they have ever been. Will the pace of equipment improvement and change slow down? Absolutely yes. Will companies fall by the wayside? Yes again. Only the strong will survive. Everyone just needs to adapt and adjust to the imminent changes. We learned a lot from spinning up from the 90s doldrums post 9-11 and we can do it again, when required in the future. Unlike many disasters, this “recession” is one we can see coming. If you aren’t adjusting and adapting now, you are either blind or ignorant.
Well said.
The fat and lazy will fall by the wayside and either assimilated in Borg-style, or their carcasses will be picked over by corporate vultures, or they will be simply over-taken by faster, more nimble and more imaginative competitors.
One thing that struck me when I was at MiliPol Qatar recently was just how small the US / North American presence was – especially in comparison to the French. Very shortsighted…
Actually militaries forget lessons all the time…we knew how to fight a counter-insurgency correctly from the Phillipines…we didn’t when we got to Vietnam and then we learned by the end but we forgot again and we have not been applying real COIN Warfare we’ve just been calling it that.
I can tell you we are re-thinking our trade show schedule for next year. The only shows that were any good this year were ones sponsored by the Command or SOF specific. I heard from some buddies that AUVSI was a bust in Vegas this year because no one wanted to send anyone to Vegas. I wonder how this will effect SHOT?
Companies that are diversified and provide the best quality/value will thrive. SHOT takes all kinds and in its current format will continue to stand above the rest. The more focused trade shows may need more help.
The election might make a difference?