Battles & Wars › Modern conflicts › Military-industrial complex (Eisenhower's 1961 warning)
The 'Last Supper' and the 1990s defense mergers
Pentagon dinner 1993; mergers 1993–2000· Event· Arms makers & war industry
Well documentedSolid records, physical evidence or scientific consensus.
A 1993 Pentagon dinner where defense CEOs were told to consolidate, starting mergers that shrank dozens of prime contractors to five.
See it on the Battles & Wars map →What happened
With the Cold War over, US weapons budgets fell sharply. In 1993 Deputy Defense Secretary William Perry hosted defense executives and told them the Pentagon could no longer support so many companies. Norman Augustine of Martin Marietta called the dinner the 'Last Supper'. Within a few years Northrop bought Grumman (1994), Lockheed and Martin Marietta merged (1995), Boeing absorbed McDonnell Douglas (1997) and Raytheon bought Hughes's defense business (1997). The Pentagon even paid some merger restructuring costs.
Why it matters
It left five giant prime contractors, Lockheed Martin, RTX, General Dynamics, Boeing and Northrop Grumman, meaning less competition and fewer factories able to surge production in wartime.
Think of it like
Like a market where five landlords come to own nearly every building: the main tenant, the Pentagon, has few alternatives when leases come up.
How we know
Accounts by Perry, Augustine and other participants, SEC merger filings, and a 2022 Defense Department report finding aerospace and defense prime contractors had shrunk from 51 to 5.
Still debated
Whether consolidation saved money or raised costs by killing competition is debated; ammunition shortages during the Ukraine war renewed the argument.
Connections (3)
▸Lockheed (later Lockheed Martin) became Lockheed Martin (1995) in the The 'Last Supper' and the 1990s defense mergersWell documented
The connection
Lockheed, maker of the U-2, SR-71 and F-117, merged in 1995 with Martin Marietta, maker of missiles, satellites and rockets, whose chief Norman Augustine had named the 'Last Supper'. The new Lockheed Martin became the world's largest arms maker by revenue and later won the F-35 contract.
When and how
Bethesda, Maryland, March 1995; chief executives Daniel Tellep of Lockheed and Norman Augustine of Martin Marietta.
How we know
SEC filings, company histories and the Pentagon's approval of the deal document it; SIPRI rankings list Lockheed Martin as the top arms seller.
Debates and open questions
Whether the merger cut costs as promised or reduced competition, raising prices on programs like the F-35, is debated.
▸Northrop (later Northrop Grumman) and the B-2 became Northrop Grumman in 1994 during The 'Last Supper' and the 1990s defense mergersWell documented
The connection
After the Cold War, Pentagon leaders told contractors at a 1993 dinner that budgets would shrink and many firms would have to merge. Northrop bought Grumman in 1994 for about $2.1 billion, then Westinghouse's defense electronics, Litton and TRW, becoming one of the five biggest US defense contractors.
When and how
Pentagon 'Last Supper' dinner, 1993; Northrop's purchase of Grumman, 1994, after a bidding contest with Martin Marietta; later acquisitions through 2002.
How we know
SEC filings, company annual reports and Pentagon records document the deals.
Debates and open questions
Whether fewer, larger contractors cut costs or weakened competition and raised prices is still argued in Congress and among economists.
▸The 'Last Supper' and the 1990s defense mergers followed the budget cuts after the Fall of the Berlin WallWell documented
The connection
When the Berlin Wall fell in 1989 and the Soviet Union collapsed in 1991, the threat that had justified high spending vanished. US weapons-buying budgets fell by more than half from their mid-1980s peak, which led the Pentagon in 1993 to tell contractors to merge or fail.
When and how
Washington, 1989–93; 'peace dividend' cuts under Presidents George H. W. Bush and Bill Clinton, with Defense Secretary Les Aspin and his deputy William Perry.
How we know
Defense budget data and the accounts of Perry, Augustine and others tie the merger push directly to the post–Cold War cuts.
Debates and open questions
Whether the 'peace dividend' cuts went too deep, leaving too few suppliers for later wars, is debated.