Open and honest dialogue between business and government is crucial if industry can effectively deliver during an era of fiscal austerity, executives from some of the nation’s top defense contractors said during a morning panel discussion on the final day of West 2014 in San Diego, Calif.
Thursday’s program began with a panel discussion with industry leaders entitled, “What are the Industrial Base Issues That Need to be Considered in Any Strategy.” All three speakers agreed the biggest challenge is operating in an era of limited spending and demands for further cost cutting,
Ellen Lord, president and chief executive officer at Textron Systems Corp., said the Pentagon needs to provide detailed directions through more open discussions. Business, Lord said, “wants more ability to have discussion.” The government has certain needs, and businesses “need to understand what those are.”
She added later, “We can adapt if there is a fundamental dialogue about where the Navy is going.”
Jeffrey Napoliello, vice president for strategy and business development at Lockheed Martin Mission Systems and Training, agreed.
“As an industry, we’re highly responsive,” he said. “We’ve cut a lot of fat out. We’re getting to the point where we’re going to be cutting into muscle. We need to have a dialogue.”
Mike Petters, president and chief executive officer of Huntington Ingalls Industries added that Pentagon planners need to be cautious in its decisions and warned against “making a hard left turn” that could have profound consequences on expenses. It was a topic addressed by some former Navy leaders during informal discussions later in the day, who blamed many cost overruns on government guidelines that can suddenly change.
Lord said businesses can be more cost conscious by taking several steps, including looking for opportunities to drive efficiency and innovation. She pointed to the LCS as a prime example. Not to be overlooked is developing talent and leveraging commercial off-the-shelf technology.
In short, she said, “We need to have efficient product development.” Industry, she added, needs to look at existing platforms and improve upon them.
She also encouraged a greater use of fixed-cost contracts. “Have our feet held to the fire and deliver,” Lord said.
