ABSTRACT
In a shrinking market, small contractors may leave the defense business or merge with larger companies. A few firms may diversify by buying nondefense companies, or expand on their own, and some may invest capital to develop arms control verification technology. When prime contractors complete their orders for the Department of Defense, their subcontractors often are affected. When military contracts end or threats of war recede, contractors search for ways of keeping their losses at a minimum. With major treaties on conventional and strategic weapons completed, verification technology appears a promising field for some defense contractors. Worker Adjustment Programs enable contractors to soften the blow to employees by offering transitional education, training, and outplacement programs. Contractors in the weapons-making business know that little stability exists in this industry. The philosophy of Textron has been to diversify and to limit the impact of the business cycle on the company.
