Throwback Thursday -- Industry Consolidation

Welcome to Throwback Thursday, InsideDefense.com's weekly look back at what was happening on or around this day in years past.

Two decades ago, the Office of the Secretary of Defense's helicopter industrial base study found that consolidation would be likely in the industry, but that the Pentagon would "allow market forces to control any consolidation decisions."

On Wednesday -- more than 20 years later -- the Pentagon sounded the alarm about defense industry consolidation, pointing to the acquisition of helicopter maker Sikorsky by Lockheed Martin as an example. Frank Kendall, the top DOD buying official, said increased consolidation would be bad for the Pentagon, likely stifling innovation and pushing prices higher.

He said the Pentagon will turn to Congress for help on limiting this trend.

The report issued 20 years ago came to a different conclusion.

"Based on the factors described in this assessment, DOD intends to allow the natural forces of the market to determine the make-up of the helicopter industry," the report said. "Industry consolidation is occurring in response to declining DOD procurements, increased international competition, and excess capacity."

Story link: http://insidedefense.com/inside-army/osd-let-market-forces-determine-fate-helicopter-industrial-base