Defense Cuts Likely in Any Budget Deal, EADS Chief Says

November 20, 2012

Defense companies should brace for years of Pentagon spending cuts even if automatic reductions set to begin in January are averted, said Sean O’Keefe, who heads EADS North America.

Any debt-reduction compromise between Congress and President Barack Obama to avoid the so-called fiscal cliff is still likely to make deep cuts in defense and other programs, according to O’Keefe, chairman and chief executive officer at the U.S. unit of European Aeronautic, Defence & Space Co. (EAD)

“Every industry and every company that is doing business contractually with the U.S. government is, I think, girding for the probability that there’s going to be a major adjustment, whether it’s by this mechanism or by some other” devised as an alternative, O’Keefe said in an interview for Bloomberg Television’s “Conversations with Judy Woodruff” set to air on Nov. 22.

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