The big change happened in the early 90's. In about 1991-2, the major players were sat around a table (supplied by the DoD) and were shown the writing on the wall. At the time there were about 15 major contractors in the States, and they were told that there was room for about 3-4.
Shortly after that, everyone started buying or merging, making sure that they were still viable as major contractors. The end result was (and I know that there are others still around) Lockheed Martin and Boeing, with Northrupp Grumman in a sad third place. Raytheon (at the last check, which was some time ago) were in fourth place in the States.
Shortly after this, the European market realised that the same model had to be followed if a competitive edge was to be maintained. British Aerospace went round the UK (and a few other places, including the States) and bought up everything they could. To a lesser extend, GKN (think of Westlands and a whole host of smaller aerospace companies as well as major engineering) did the same. Meanwhile, all (well, most) of the EADS members merged and formed MEADS for the military side.
Now we are going through the teething troubles that all multinational conglomerates seem to go through at some point, generally early on in their career as gargantuans.
Boeing's recent troubles are well documented. Lockheed Martin have had a number of lesser scandals (not all of their making). British Aerospace have had bribery scandals in South Africa, and the UK MoD virtually won't buy anything major from them at the moment (to my satisfaction as a UK taxpayer). EADS have had a fairly good run (although the bribery scandals keep on running), but their base market has no more money to spend on new equipment and so they need to make some major sales to other parts of the world. Also, their reputation in the military market of 'to spec, to schedule and to cost' is, unfortunately, lacking - mainly due to the schedule/cost aspect.
If you check out the websites of any of these major players, you'll see the history. They are all very impressive, as far as pedigree is concerned.
The definition of a 'Pessimist': an Optimist with experience...