The chief executive of Leonardo DRS says the company expects a flat defense budget -- regardless of who wins next month's election.
In an interview with Inside Defense this week, Bill Lynn, who also previously served as deputy defense secretary, said the budget is facing deficit pressure.
"I think the defense budget's basically at a peacetime all-time high so there's a natural flattening when you hit that," he said.
Lynn contended the growing deficit will likely create a "gravitational effect . . . on all federal spending, including defense."
However, at the same time, Lynn said he thinks the threat posed by multiple nations, from China to Russia to Iran and North Korea, will make it hard to significantly cut defense spending.
Lynn said he sees the threat and deficits as the No. 1 and No. 2 factors that drive defense spending. Politics, he said, is generally third.
"Whoever wins this election is going to face the same threat and the same deficit pressure," he said.
But he told Inside Defense a flat and stable budget offers good predictability for defense contractors.
Lynn said Leonardo DRS, because it doesn't build platforms, sees opportunities even without budget growth.
"As you get flat budgets, you tend to get tradeoffs which show up particularly in the drive to get new platforms," he said. "Since we're not a platform house, we have the ability to pivot from putting our electronics and advanced sensors on new platforms to upgrading older platforms."
Meanwhile, Lynn said about 40% of Leonardo DRS's workforce has been working from home because of the ongoing COVID-19 pandemic.
He said the company is starting to consider what the post-pandemic workplace will look like.
"We've seen a great deal more success and flexibility in work-from-home than I think we would have anticipated," he said. "I don't think it means everybody who's working from home now is going to continue to, but I think you're going to look more flexibly at 1) requests to work from home and 2) can we operate with fewer people in the office or people going into the office fewer days."