Consolidation is beginning to pay big dividends in our efforts to commit more resources to modernization. Yet, while encouraging consolidations, we have insisted upon maintaining competition. Naturally, as consolidation increases, maintaining adequate competition becomes increasingly difficult. And, this has resulted, as you know, in our decision to resist some mergers. The key to our policy on domestic consolidation is to understand the need for maintaining competition.
Competition drives increased efficiency, and, most important, promotes innovation.
We have encouraged consolidation and will continue to do so, as long as we see potential savings and as long as we can maintain effective competition in all critical defense sectors. However, we will strive to resist mergers that threaten to become monopolistic. Consolidation and rationalization will improve firms' competitiveness, increase investments in advanced technology, and enhance chances for success in a fast-paced global marketplace. The issues of competition, efficiency, and innovation are at play in European consolidation, as they are in our domestic industrial base. Specialized Accounting and Auditing .