The War Profiteers

The war in Ukraine will indeed be a bonanza for the likes of Raytheon and Lockheed Martin. First of all, there will be the contracts to resupply weapons like Raytheon’s Stinger anti-aircraft missile and the Raytheon/Lockheed Martin-produced Javelin anti-tank missile that has already been provided to Ukraine by the thousands.  

In a January 2022 call with his company’s investors, Raytheon Technologies CEO Greg Hayes typically said that the prospect of conflict in Eastern Europe and other global hot spots would be good for business, adding that “we are seeing, I would say, opportunities for international sales. The tensions in Eastern Europe, the tensions in the South China Sea, all of those things are putting pressure on some of the defense spending over there. So I fully expect we’re going to see some benefit from it.”

In late March, in an interview with the Harvard Business Review after the war in Ukraine had begun, Hayes defended the way his company would profit from that conflict:

“So I make no apology for that. I think again recognizing we are there to defend democracy and the fact is eventually we will see some benefit in the business over time. Everything that’s being shipped into Ukraine today, of course, is coming out of stockpiles, either at DoD [the Department of Defense] or from our NATO allies, and that’s all great news. Eventually, we’ll have to replenish it and we will see a benefit to the business over the next coming years.”

The bigger stream of profits, however, will come from assured post-conflict increases in national-security spending here and in Europe justified, at least in part, by the Russian invasion and the disaster that’s followed.

In fact, military contractors have much to look forward to. More than half of the Pentagon’s $6.5 billion portion of the emergency-spending package for Ukraine is designated simply to replenish DoD inventories. 

For U.S. arms makers, however, the greatest benefits of the war in Ukraine won’t be immediate weapons sales. The representatives of the arms companies were already plugging the long-term challenge posed by China, a greatly exaggerated threat, but the Russian invasion is nothing short of manna from heaven for them, the ultimate rallying cry for advocates of greater military outlays. Even before the war, the Pentagon was slated to receive at least $7.3 trillion over the next decade, more than four times the cost of President Biden’s $1.7 trillion domestic Build Back Better plan.

Ukraine And The Profits Of War| Countercurrents