Cover: California's Shrinking Defense Contractors

California's Shrinking Defense Contractors

Effects on Small Suppliers

Published 1996

by Georges Vernez, Michael Dardia, Kevin F. McCarthy, Jesse D. Malkin, Robert Nordyke


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Case studies of 25 small defense suppliers in southern California were used to examine the hypothesis that such firms have been especially hard-hit by the Pentagon's budget cutbacks between 1989 and 1994. Research found that electronics and materials firms were generally more successful at making up lost revenue than were machine shops and aircraft parts firms. Most firms had downsized, but management believed that they could increase production to previous peak levels within a few months if necessary. Few firms had made use of federal defense conversion programs, but quite a few had received funds from the state of California to retrain workers.

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