The Trillion-Dollar Questionhttp://www.fool.com/investing/general/2012/07/16/the-trillion-dollar-question.aspx Mark Reeth
July 16, 2012
Editor's note: A previous version of this article incorrectly stated that sequestration would begin in June 2013, instead of in January 2013. The Fool regrets the error.
Sequestration, the automatic budget cuts for various U.S. government programs, is no laughing matter for major defense contractors. If Congress doesn't act to stop the cuts from taking place, they will begin in January 2013 and reduce the U.S. defense budget over the next 10 years by $492.3 billion. And that would be on top of around $500 billion already slashed over the next 10 years. While many government defense contractors are exposed to the budget cuts, one company that may have more to lose than any other is Northrop Grumman (NYSE: NOC ) .
In defense of defense
The diversity of products will probably be an edge for the company once the ax falls on several defense programs beginning January 2013; the problem is that it doesn't matter if the company is well diversified within one sector if that sector is about to get decimated with budget cuts.
On the attack