Paris 2011: Squeeze on services sector prompts L-3 to keep its eyes on high-tech export prizes
Prompted in part by the prospect of squeezed Pentagon budgets, U.S.
Prompted in part by the prospect of squeezed Pentagon budgets, U.S. defense groups have been consolidating operations in pursuit of higher value, higher technology pursuits. At L-3 Communications, as at both Lockheed Martin and Northrop Grumman previously, this means shifting out of service activities where margins are tighter and there is less scope for differentiation in a tight market, according to the New York-based group’s chairman, president and CEO Michael Strianese.
“The services segment can be a great performer, but it may not make sense to make more investments here, and there could be others who can take this further,” Strianese told AIN. Pricing pressure in defense services has come from smaller second- and third-tier providers.
