Grundman cited in Defense News, “Companies Turn Toward Diversification”
The prevailing wisdom of the last downturn was best articulated by former Lockheed Martin CEO Norman Augustine, who said that the defense industry’s record of diversification was “unblemished by success”. “We way over learned that lesson,” said Steve Grundman, Lund Fellow at the Atlantic Council. “That slogan got repeated, and repeated, and Wall Street repeated it. And ever since then, there has been a nearly unanimous aversion to a defense company diversifying.” . . . The commercial aerospace market provides prime opportunities for defense companies, said Grundman, who leads the consulting firm Grundman Advisory. . . . “The last cycle of restructuring basically took 15 years, so we are in very early days,” Grundman said. “The consolidation actions didn’t take place until we were 10 years into the cycle, at which point the bottom of the cycle was well within view. The economic logic of the transactions was to consolidate market share just ahead of the turnaround in defense spending.”
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