Business: New Battle Over Defense Profits

HOW profitable is the business of building aircraft, tanks, missiles and other weapons for the Pentagon? Defense contractors contend that their earnings average no more—and often less—than those of other manufacturers, and the current difficulties of the Lockheed Corp. seem to bear them out. Yet charges have often been leveled that defense contractors make excessive profits on contracts for the military, frequently without much risk. Last week the controversy was given new life when a draft report by the Government's General Accounting Office leaked out after GAO staffers became fearful that its findings might be watered down. The report's conclusion: producing...

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