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Posted by John Keller

The U.S. economy has run through nearly every powerful business sector to lean on to keep itself upright. Commercial technology seems to be played out. Housing -- long the mainstay -- is on its back. Consumer spending is staggering. What's left?

Defense spending, that's what. It's come to this.

With most business sectors at the end of their ropes, U.S. defense profits, sales, or both, apparently are on the upswing, according to an Aviation
Week and Space Technology
blog by Joe Anselmo entitled Downturn? Not in Defense Profits. Writes Anselmo:

It certainly is a good time to be working in aerospace and defense, as opposed to banking or housing. The fourth quarter and full-year 2007 earnings results that companies are rolling out this week illustrate the degree to which military contractors are buffeted from the sputtering U.S. economy.

Anselmo points out that Lockheed Martin in the fourth quarter had flat sales but a 20 percent increase in net income. General Dynamics posted net income at the same time that is up 42 percent. Northrop Grumman had flat sales, yet a 10 percent gain in net income. Northrop Grumman over the full fiscal year had a 16 percent increase in net income and a 6 percent increase in sales. More good news is likely to come soon.

Contrast that with the dismal news we have been reading about the banking and housing industries. The defense industry, again, is looking like a winner.

It's funny, though. Defense spending only seems to be really great when most commercial industries have hit the skids. I sense from conversations this past week at the Photonics West trade show that electro-optics companies usually focused on commercial endeavors are giving surprisingly strong consideration to the military.

What this tells me is commercial technology might not be the best bet these days, and technology companies are looking for a safe harbor. When they do this they usually turn to the stable, predictable, and large defense budgets.

When's the last time they did this? It was in the wake of the telecom and busts and the 9/11 terrorist attacks in 2001.

Some newcomers to the defense business will make it, and some won't. Those with experience with the military business have a big advantage. Those without experience are likely to be disappointed.

But watch. Most of the newcomers will toss defense aside like an old shoe once commercial technology comes back. Defense systems integrators have seen this before -- and they have long memories.

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Welcome to the lighter side of Military & Aerospace Electronics. This is where our staff recount tales of the strange, the weird, and the otherwise offbeat. We could put news here, but we have the rest of our Website for that. Enjoy our scribblings, and feel free to add your own opinions. You might also get to know us in the process. Proceed at your own risk.

John Keller for MAE
John Keller is editor-in-chief of Military & Aerospace Electronics magazine, which provides extensive coverage and analysis of enabling electronic and optoelectronic technologies in military, space, and commercial aviation applications. A member of the Military & Aerospace Electronics staff since the magazine's founding in 1989, Mr. Keller took over as chief editor in 1995.

Courtney Howard for MAE Courtney E. Howard is senior editor of Military & Aerospace Electronics magazine. She is responsible for writing news stories and feature articles for the print publication, as well as composing daily news for the magazine's Website and assembling the weekly electronic newsletter. Her features have appeared in such high-tech trade publications as Military & Aerospace Electronics, Computer Graphics World, Electronic Publishing, Small Times, and The Audio Amateur.

John McHale for MAE John McHale is executive editor of Military & Aerospace Electronics magazine, where he has been covering the defense Industry for more than dozen years. During that time he also led PennWell's launches of magazines and shows on homeland security and a defense publication and website in Europe. Mr. McHale has served as chairman of the Military & Aerospace Electronics Forum and its Advisory Council since 2004. He lives in Boston with his golf clubs.