SCOTTSDALE, AZ, November 6, 2008 — “As you know, we have a new president-elect (Barack Obama) and his priorities are significantly different from the current administration”, commented Ray Alderman, executive director of VITA. “I have been gathering information and will continue to do so as the financial/investment analysts release more data on this subject. The impact of the economic crises and prospects of changing priorities raises concerns and fears that may impact our industry.”
It is clear that the market has already factored-in major changes to the US health care system. Most of the health care insurers and drug company stocks are already price-depressed (anticipating major changes to how health care is priced and delivered in this country). Additionally, most of the primary oil stocks are price-depressed (anticipating large tax increases on their profits).
As for our MIL/COTS markets, it is hard to discern what will happen at this point, but turning-off the supply pipeline to many programs will be difficult. I suspect that major new platforms and programs will see some retrenchment and loss of funding. But, I also believe that we will continue to see a large number of refresh programs continue, even in an Obama administration. I suspect that the new administration will shift from high spending levels on weapons systems and new platforms to more spending on intelligence monitoring equipment and data-gathering systems. But, that transition, if I am correct, will take some time.
The industrial segments will be more affected by global economic conditions than pure politics, as will the telecom segments of our industry. Both market segments are tightly coupled to consumer spending, and declining consumer spending is a major culprit in the present economic situation we are experiencing. We could see the next administration take an interest in making broadband communications available to the masses. And we may see a renewal of government interest in manufacturing in this country. But the housing, banking, and rising unemployment problems may occupy the majority of this new administration’s time and energy.
Founded in 1984, VITA is an incorporated, non-profit organization of suppliers and users who share a common market interest in critical embedded systems. VITA champions open system architectures. Its activities are international in scope, technical, promotional and user-centric. VITA aims to increase total market size for its members, expand market exposure for suppliers, and deliver timely technical information. VITA has ANSI and IEC accreditation to develop standards (VME, VXS, VPX, XMC, FMC, etc) for embedded systems used in a myriad of critical applications and harsh environments. For further information, visit www.vita.com .