Yet, while encouraging consolidations, we have insisted upon maintaining competition. In our most recent Industrial Capabilities Report to Congress, we noted that, despite significant restructuring and consolidation within the defense industry, at least two contractors with design and manufacturing experience remain to compete for major defense programs within each major critical product area. 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 call critical defense sectors. However, we will strive to resist mergers that threaten to become monopolistic. Those were the issues at stake in our decision to oppose the Lockheed - Northrup merger plan. These were some of the issues at stake in our recently completed review of the proposed merger of General Dynamics and Newport News Shipyard. Consolidation and rationalization will improve firms' competitiveness, increase investments in advanced technology, and enhance chances for success in a fast-paced global marketplace.