The fiscal what? Cliff? How about the fiscal “speed bump.”The CEO of the fourth largest U.S. defence firm, Raytheon (5th largest in the world), Bill Swanson “is telling investors sequestration would be a ‘speed bump,’ not a ‘guillotine,'” according to Politico.
From the Politico report:
“Literally, you’ll go into it slow, go over the top of it, and then you come out of it as quick as you possibly can,” Swanson said. “It’s not a guillotine.” The market would be able to recover, he said. For example, Raytheon would look to its foreign military sales, which make up more than 25 per cent of its business, to help fill in shortfalls in orders or production, he said. None of those sales would be affected by sequestration, he added.
Raytheon has substantial foreign contracts, one most recently with Israel to improve upon the lauded Iron Dome — Israel just contracted Raytheon for a “Next Generation” missile defence system, an Iron Dome 2, for lack of better terminology. The $25 billion company also put the finishing touches on a new missile factory about a week ago.
Separately, other defence firms, like Lockheed Martin, are slowly coming around to the idea of adapting to impending defence cuts. Martin, the company responsible for the controversial F-35 program, has begun insisting the program is safe, despite varying reports.
The “Fiscal Cliff” involves around $500 billion in mandatory defence cuts if Congress can’t reach a deal to reduce the deficit by the end of the year.
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