Makers of Bombs & Drugs a Little Worried
What a Democrat Win Means for Defense Contractors, Drug Companies
Wednesday, November 08, 2006
FOX NEWS
WASHINGTON — By boosting the power of Democrats in Congress, voters likely set in motion legislative efforts that could lower the price of pharmaceuticals and cut defense spending.
But with the balance of the power in the Senate not tipping more than one or two votes, where it usually takes 60 votes to pass major legislation, companies such as Merck & Co. (MRK) and Lockheed Martin Corp. (LMT) may find themselves more the target of harsh political rhetoric than any hurtful changes in law.
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With many political analysts viewing the Democrats win of the House as evidence of waning support for the war in Iraq, some Wall Street analysts are bracing for the possibility that military spending may gradually slow.
Even if Republicans manage to maintain control of the Senate, Arizona Sen. John McCain, a frequent critic of free-spending defense programs, is expected to take over as chairman of the Senate Armed Services Committee after Sen. John Warner, R.-Va., steps down because of term limits. McCain has a history of being tough on the defense industry, forcing the Air Force to change the terms of a Lockheed cargo plane contract and helping to uncover wrongdoing by Boeing and a Pentagon official in a separate Air Force tanker contract.
Lockheed Chief Financial Officer Chris Kubasik tried to ease jitters recently, saying the company has "worked well with both parties" and that its business, mostly long-term big ticket contracts, can withstand periodic political changes in Washington.
Wednesday, November 08, 2006
FOX NEWS
WASHINGTON — By boosting the power of Democrats in Congress, voters likely set in motion legislative efforts that could lower the price of pharmaceuticals and cut defense spending.
But with the balance of the power in the Senate not tipping more than one or two votes, where it usually takes 60 votes to pass major legislation, companies such as Merck & Co. (MRK) and Lockheed Martin Corp. (LMT) may find themselves more the target of harsh political rhetoric than any hurtful changes in law.
**********
With many political analysts viewing the Democrats win of the House as evidence of waning support for the war in Iraq, some Wall Street analysts are bracing for the possibility that military spending may gradually slow.
Even if Republicans manage to maintain control of the Senate, Arizona Sen. John McCain, a frequent critic of free-spending defense programs, is expected to take over as chairman of the Senate Armed Services Committee after Sen. John Warner, R.-Va., steps down because of term limits. McCain has a history of being tough on the defense industry, forcing the Air Force to change the terms of a Lockheed cargo plane contract and helping to uncover wrongdoing by Boeing and a Pentagon official in a separate Air Force tanker contract.
Lockheed Chief Financial Officer Chris Kubasik tried to ease jitters recently, saying the company has "worked well with both parties" and that its business, mostly long-term big ticket contracts, can withstand periodic political changes in Washington.
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