On the industrial side, a transformation similar to that occurring on the military side is required. Yet, while encouraging these consolidations, we have insisted throughout 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 recent large U.S. 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.
Monopolistic conditions, beyond being simply undesirable from a price standpoint, would allow a monopolistic defense firm to seal off military capabilities that could result from new innovations in the non-defense sector or from the defense industries of other nations. In the U.S., we have encouraged consolidation, and we 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. And we will continue to strive to resist mergers that threaten to become monopolistic. Recent large consolidations in Europe unfortunately have the potential to move Europe towards this result. We are taking immediate actions to ameliorate the situation.