Defense Companies Face a “Transformer” Challenge under Leaner Budgets

Like “Transformer” toy weapons, U.S. defense companies facing the new, lean defense budgets must morph into new shapes be able to offer customers value that supports ongoing growth. David F. Melcher, CEO of ITT Exelis, a defense, aerospace and information company spun off from ITT in 2011, considers the challenges in this Knowledge@Wharton interview. Melcher discusses the need for adapting to a 10-year down cycle in defense spending, forging new, “affordable capabilities” for defense needs, and building on existing technologies to create new products and services increasingly apart from strictly defense revenues.


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