Defense Contracting For the Future

SOME DO IT BY SELLING OFF, OTHERS BY CONSOLIdating. The sale by General Electric of its aerospace business to Martin Marietta Corp. for $4.05 billion illustrates both defense-industry survival techniques, in wide use after six years of declining spending, and the prospect of four more under Bill Clinton. The deal, which will make Martin Marietta the world's largest defense- electronics firm, with revenues of $12 billion, supports chairman Norman Augustine's conviction that "companies that combine will be the survivors." GE chairman John Welch, worried about holding on to a division too small to compete in a shrinking market, decided to get...