Tighter defense budgets and likely Democratic gains in Congress could lead to greater protectionist sentiment for U.S. defense firms, according to some experts. "The sad truth is that both sides of the political aisle have been back-pedaling on globalization," says Teal Group analyst Richard Aboulafia. But Clay Jones, CEO of Rockwell Collins Inc., says budget constraints could actually boost international efforts such as the F-35 Joint Strike Fighter, which Lockheed Martin Corp. is developing with eight global partners. "If you're trying to control the rate of defense spending, the JSF arrangement makes a lot of sense," Jones says.

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