To Survive U.S. Defense Companies Are Diversifying And Finding New Markets
Defense Firms Seek Alternatives as U.S. Cuts Military Spending -- Wall Street Journal
Dawne Hickton has seen the future—and it is old people.
After building a business largely on selling titanium to the U.S. defense industry, Ms. Hickton is turning her sights to health care.
RTI International Metals Inc., RTI +0.07% of which Ms. Hickton is chief executive, last year paid $182 million to buy a medical-device business, gaining access to the market for spinal implants and other products for the nation's growing numbers of senior citizens. "That's a future for us—the elderly population," Ms. Hickton says. "That's a growing market. We don't know what the defense market is going to do."
Over the past three years, she says, Pittsburgh-based RTI's defense work has been cut in half, falling to 20% of the company's revenue from 40%.
Faced with more defense cuts on the horizon, RTI is part of a broader shift by defense companies, large and small, looking for ways to contend with lost business. Some of them are diversifying. Others are shedding unprofitable segments, closing plants or laying off workers. Many are looking to increase sales on the international market.
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My Comment: Bottom line .... to survive and grow America's defense companies must find markets overseas and diversify .... if not .... expect to become a smaller company (and that is if you survive).
