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Source: Anti War
How Pentagon Contractors Are Cashing in on the Ukraine Crisis
The New Gold Rush
by William D. Hartung, Julia Gledhill and Tom Engelhardt | April 18, 2022
The Russian invasion of Ukraine has brought immense suffering to the people of that land, while sparking calls for increased military spending in both the United States and Europe. Though that war may prove to be a tragedy for the world, one group is already benefiting from it: U.S. arms contractors.
How Pentagon Contractors Are Cashing in on the Ukraine Crisis
The New Gold Rush
by William D. Hartung, Julia Gledhill and Tom Engelhardt | April 18, 2022
The Russian invasion of Ukraine has brought immense suffering to the people of that land, while sparking calls for increased military spending in both the United States and Europe. Though that war may prove to be a tragedy for the world, one group is already benefiting from it: U.S. arms contractors.
Even before hostilities broke out, the CEOs of major weapons firms were talking about how tensions in Europe could pad their profits. In a January 2022 call with his company's investors, Raytheon Technologies CEO Greg Hayes typically bragged 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… [T]he 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."
Arms to Ukraine, Profits to Contractors
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 Washington has already provided to Ukraine by the thousands. 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.
Indeed, direct arms transfers to Ukraine already reflect only part of the extra money going to U.S. military contractors. This fiscal year alone, they are guaranteed to also reap significant benefits from the Pentagon's Ukraine Security Assistance Initiative (USAI) and the State Department's Foreign Military Financing (FMF) program, both of which finance the acquisition of American weaponry and other equipment, as well as military training. These have, in fact, been the two primary channels for military aid to Ukraine from the moment the Russians invaded and seized Crimea in 2014. Since then, the United States has committed around $5 billion in security assistance to that country.
According to the State Department, the United States has provided such military aid to help Ukraine "preserve its territorial integrity, secure its borders, and improve interoperability with NATO." So, when Russian troops began to mass on the Ukrainian border last year, Washington quickly upped the ante. On March 31, 2021, the U.S. European Command declared a "potential imminent crisis," given the estimated 100,000 Russian troops already along that border and within Crimea. As last year ended, the Biden administration had committed $650 million in weaponry to Ukraine, including anti-aircraft and anti-armor equipment like the Raytheon/Lockheed Martin Javelin anti-tank missile.
Despite such elevated levels of American military assistance, Russian troops did indeed invade Ukraine in February. Since then, according to Pentagon reports, the U.S. has committed to giving approximately $2.6 billion in military aid to that country, bringing the Biden administration total to more than $3.2 billion and still rising.
Some of this assistance was included in a March emergency-spending package for Ukraine, which required the direct procurement of weapons from the defense industry, including drones, laser-guided rocket systems, machine guns, ammunition, and other supplies. The major military-industrial corporations will now seek Pentagon contracts to deliver that extra weaponry, even as they are gearing up to replenish Pentagon stocks already delivered to the Ukrainians.
On that front, 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. In all, lawmakers allocated $3.5 billion to that effort, $1.75 billion more than the president even requested. They also boosted funding by $150 million for the State Department's FMF program for Ukraine. And keep in mind that those figures don't even include emergency financing for the Pentagon's acquisition and maintenance costs, which are guaranteed to provide more revenue streams for the major weapons makers.
Better yet, from the viewpoint of such companies, there are many bites left to take from the apple of Ukrainian military aid. President Biden has already made it all too clear that "we're going to give Ukraine the arms to fight and defend themselves through all the difficult days ahead." One can only assume that more commitments are on the way.
Another positive side effect of the war for Lockheed, Raytheon, and other arms merchants like them is the push by House Armed Services Committee chair Adam Smith (D-WA) and ranking committee Republican Mike Rogers of Alabama to speed up production of a next-generation anti-aircraft missile to replace the Stinger. In his congressional confirmation hearing, William LaPlante, the latest nominee to head acquisition at the Pentagon, argued that America also needs more "hot production lines" for bombs, missiles, and drones. Consider that yet another benefit-in-waiting for the major weapons contractors.
The Pentagon Gold Mine
For U.S. arms makers, however, the greatest benefits of the war in Ukraine won't be immediate weapons sales, large as they are, but the changing nature of the ongoing debate over Pentagon spending itself. Of course, the representatives of such 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, already stymied by members of Congress who labeled it "too expensive" by far. And keep in mind that, given the current surge in Pentagon spending, that $7.3 trillion could prove a minimal figure.
Please go to Anti War to read more.
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In this regard the psychopathic control grid doesn't take into its calculation the untold thousands and thousands of people who are killed and injured and the billions of dollars of the destruction of civilian infrastructure. That's just the nature of this business.
Honestly, the only response to this is what a disgusting human being this Zelensky really is. This pathetic western proxy clown will say and do anything to get weapons and munitions flowing into Ukraine. Is this guy even in Ukraine?
Bleed Russia dry to profit from a massive weapon and munitions increase in manufacturing while NATO becomes a global war institution:
Keep sending the weapons and munitions because Russia controls the battlefield:
“Near Odesa Russian anti-aircraft defense forces have shot down a Ukrainian military transport plane, which was delivering a large shipment of arms supplied to Ukraine by Western counties,” Russian Defense Ministry Spokesman Major-General Igor Konashenkov said Saturday.
— CGTN America (@cgtnamerica) April 16, 2022
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