War Profits

 

The war in Ukraine is a bonanza for arms manufacturers, which are lined up to profit as the United States and its allies increase military spending.

Less than three full months into 2022, Lockheed Martin's stock has surged by more than 25%, while the share prices of Raytheon, General Dynamics, and Northrop Grumman have also risen by roughly 12%, 14%, and 16%, respectively.

 Historian Jonathan Ng, a postdoctoral fellow at the University of Tulsa, explained how "the spiraling conflict over Ukraine dramatizes the power of militarism and the influence of defense contractors. A ruthless drive for markets—intertwined with imperialism—has propelled NATO expansion, while inflaming wars from Eastern Europe to Yemen." 

William Hartung, a senior research fellow at the Quincy Institute for Responsible Statecraft, told The Hill that "there's a lot of possibilities for ways that the contractors will benefit, and in the short term we could be talking about tens of billions of dollars, which is no small thing, even for these big companies."

The U.S. Congress approved a record-setting Pentagon budget, and their counterparts in several European countries also vowed to significantly boost military spending to counteract Moscow.

The government funding bill that U.S. President Joe Biden signed provides $6.5 billion in military aid to Eastern European nations, including $3.5 billion worth of additional weapons for Ukraine. As The Hill reported, the extra support for Ukraine "comes on top of more than $1 billion the U.S. has already spent in the past year to arm Ukrainian soldiers with modern weapons, including Javelin anti-tank missiles, manufactured by Lockheed Martin and Raytheon Technologies, and Raytheon's anti-aircraft Stinger missiles."

The U.S. is not the only country where military contractors are anticipating a bump in sales. Over the past few weeks, European countries including Germany, Italy, Poland, and Sweden have announced that they will boost military spending.

 Germany said that it would purchase up to 35 American Lockheed Martin F-35 fighter jets, a major reversal from its previous plan to revamp its aging fleet with a combination of older, less expensive American- and European-made jets. That comes after German Chancellor Olaf Scholz announced late last month that the nation would invest $111 billion in a new military investment fund and increase defense spending above 2% of its gross domestic product.

U.S. Rep. Adam Smith (D-Wash.), chair of the House Armed Services Committee, said next year's Pentagon budget is "going to have to be bigger than we thought," he added—suggesting that far from being temporary, the recent spike in military spending may be a harbinger of what's to come in the years ahead.

War in Ukraine a Windfall for Weapons Industry (commondreams.org)