As the defense industry braces for spending cuts, some are optimistic that the confirmation of former Sen. Chuck Hagel (R-Neb.) would ensure a defense secretary knowledgeable about both defense and the private sector.
Hagel is a Vietnam veteran and the founder of cellular telecommunications company Vanguard Cellular, which went public in the late 1980s and was eventually sold to AT&T. He left Vanguard in 1987, and later served as president of investment banking firm McCarthy & Co.
He “understands how businesses operate and how they’re incented to perform,” said Byron Callan, a director at Washington-based investment research firm Capital Alpha Partners. “That should be a positive factor.”
The industry has long been expecting cuts to defense spending, but remains concerned about implementation. The pending across-the-board cuts known as sequestration, for example, have been lambasted by contractors as too simplistic and failing to take strategy into account.
Other names rumored to be considered for the defense secretary position were Ashton Carter, the deputy defense secretary, and Michèle Flournoy, former undersecretary of defense for policy.