TheStreet.com Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.WASHINGTON ( TheStreet) -- The Senate vote to end production of the F-22 jet fighter has led to a sharp drop in the stock price for defense company Lockheed Martin ( LMT) and rattled the industry as a whole. While the defense budget is on track to exceed half a trillion dollars in 2010, the axing of $1.7 billion in aircraft has investors in the military industrial complex spooked. With the budget deficit growing ever larger and new agenda items such as health care threatening to rack up a tab of more than a trillion dollars in the next 10 years, something has to give. The question is, if defense spending, currently about 21% of the entire budget, is reduced, what will happen to the profitability for companies like Lockheed, Raytheon ( RTN), Boeing ( BA), General Dynamics ( GD) and Northrop Grumman ( NOC)? A review of the competitive forces affecting the defense industry helps shake out the real threats. Degree of Rivalry: Rivalry is high among defense contractors. With every new order comes a highly reliable source of income that has the potential to pay dividends for years. The F-22 led to billions of dollars in revenue for Lockheed Martin after the initial development as 187 of the $137.5 million jets were ultimately ordered. Most of the major players have niches that give them a bit of an advantage over competitors. Raytheon, for example, is highly focused on missiles and radar systems, while General Dynamics focuses on ground transportation, such as the Abrams tank, and submarines. Any overlap has been more than satisfied in recent years by the intense increase in spending because of the war in Iraq and a general push for defense spending, whether through homeland security or otherwise, by the Bush administration.