Bank robber Willie Sutton’s practical reason for robbing banks (“Because that’s where the money is”) also applies to corporations dependent on government contracts. Aerospace giant Northrop Grumman announced plans on Monday to relocate 300 employees from its Los Angeles headquarters to D.C. for exactly the same reason: Washington is where the money is.
Since the federal government is the company’s biggest client, relocating to the nation’s capital will put Northrop’s top executives in close proximity to Pentagon procurement officials and congressional budget committees, a competitive advantage that Bethesda-based Lockheed Martin, the nation’s largest defense contractor, already enjoys. SAIC, another large defense contractor, announced last September that it’s also moving its headquarters from San Diego to the Washington area.
The moves signal two trends that should be cause for concern: a shrinking defense budget as the Obama administration diverts more money to domestic programs, and the federal government’s increasing command and control of the U.S. economy. The defense titans, naturally a government constituency, are fighting for a piece of a shrinking pie. And that is the fate of other businesses (such as banks, automakers) that become more dependent on government.
