The American defence industry contracted from 51 prime contractors to roughly five major firms, with BAE sometimes counted as a sixth. Consolidation assumed shrinking defence budgets during an expected period of peace. Economies of scale could lower some costs, but the mergers also reduced the number of independent research teams, risk judgments, and corporate strategies. Large firms require more management layers across dispersed sites, lengthening the route between engineers and senior decisions. Britain followed a similar course, then objected when BAE behaved like the dominant supplier that policy had created.
Chapter · 47:20-51:37
How defence-industry consolidation reduced competition
Consolidating dozens of prime contractors promised economies of scale after the Cold War, but it also reduced independent design teams, management cultures, and competitive pressure.