There’s a custom in Washington that U.S. defense contractors don’t talk trash about their competitors, at least not in public. After fiercely competing for multibillion-dollar Pentagon contracts, the winner often placates the loser with a piece of the action. When Lockheed Martin (LMT) was awarded the contract to build the F-22 fighter jet, it hired Northrop Grumman (NOC) to build the plane’s radar. Boeing (BA) won the contract to build the Air Force’s KC-46 tanker plane and asked Northrop and Raytheon (RTN) to contribute key components. Everyone ends up happy. It’s how it’s always been done.
Elon Musk couldn’t care less how it’s always been done. The chief executive officer of the fledgling rocket maker Space Exploration Technologies—SpaceX for short—is seeking to break into the $68 billion Pentagon satellite launch market. But Musk, better known as the prickly, detail-obsessed CEO of his other company, Tesla Motors (TSLA), isn’t bothering with niceties to help ease his way into the club. Instead, in a series of visits to the capital this year, he’s blasted the defense establishment, saying he can build better rockets for less money than traditional aerospace companies and accusing the military of illegally shunning bids by outsiders—namely, him.
This would be a good thing. Most of these companies have sucked at the government’s teat so long that they simply are not really private contractors anymore.
The corporate welfare that has become military contracts (ie Congress forces the military to build things it no longer needs in order to keep jobs available) needs some changing.