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The Booming Business of War

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Ukraine War Depleting Supplies

In April, United States lawmakers said one third of the U.S. military’s stockpile of Javelin missiles had already been sent to Ukraine. They pushed for Joe Biden to speed up production by invoking the Defense Production Act.

“We have a significant usage rate for the Stingers that we’re moving over there – Javelin’s, also – and we have to maintain our stocks,” Armed Services Committee Chairman Jack Reed (D-RI) said.

“The United States military has probably sent about one-third of its Javelin anti-tank missiles to Ukraine — one-third of our supply given to them,” Sen. Richard Bluementhal (D-CT) said during a Senate Armed Services Committee hearing. He estimated that it would take about 32-months to refill their stockpiles at the current production rate without Biden invoking the Defense Production Act.

“Even with the Javelin, which we do have a hot production line right now, we are still five years out to, probably, developing all the munitions we need,” Ellen Lore, former undersecretary of Defense for acquisition and sustainment said.

“We are facing a three-year backlog on delivering weapons to Taiwan, and our current arsenal is being depleted to provide vitally needed support for Ukraine and other allies and partners in Eastern Europe,” Rep Michael McCaul (R-TX), the ranking member on the House Foreign Affairs Committee said.

“We’re going to ramp up production this year, but I expect this is going to be ‘23-’24 where we actually see orders come in for the larger replenishments, both on Stinger as well as on Javelin, which has also been very successful,” said Greg Hayes, the CEO of Raytheon, in a company earnings call.

“We are actively trying to source some of the material, but unfortunately DoD hasn’t bought a Stinger in 18 years. As far as the Stingers, we should keep in mind we are currently producing Stingers for an international customer, but we have a very limited stock of material for Stinger production,” he said. For a weapons manufacturer, not selling a weapon for 18 years must truly be unfortunate.

War is Good for Business

Throughout January’s quarterly earnings calls, executives for publicly traded companies spoke to investors candidly about their financial outlook. One almost always observes more honesty from investors during such calls, than that which is disclosed in marketing materials or carefully scripted advertisements on CBS’ Face the Nation.

James Taciclet, Lockheed Martin CEO, assured investors that the $740 billion U.S. defense budget could continue to grow in 2023, half of which goes directly to companies like his. “If you look at the evolving threat level and the approach that some countries are taking, including North Korea, Iran and through some of its proxies in Yemen and elsewhere, and especially Russia today, these days, and China, there’s renewed great power competition that does include national defense and threats to it. And the history of the United States is when those environments evolve, that we do not sit by and just watch it happen. So, I can’t talk to a number, but I do think and I’m concerned personally that the threat is advancing, and we need to be able to meet it.”

Greg Hayes, Raytheon CEO, said, “We are seeing, I would say, opportunities for international sales. We just have to look to last week where we saw the drone attack in the UAE, which have attacked some of their other facilities. And of course, 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.”

Kathy Warden , Northrop Crumman CEO, stated,” I do want to be clear. We are a defense contractor. And so we are supporting global security missions, largely in areas of deterrents, but also inclusive of weapons systems. And we expect to continue in those businesses because we believe they actually promote global human rights proliferation, not the contrary. But with that said, we have evaluated some portions of our portfolio that I’ve talked about in the past like cluster munitions. And today, making the confirmation that we plan to exit depleted uranium ammo as parts of the portfolio that we no longer wanted to support directly.”

Weapons manufacturers admit they profit greatly from war but outrageously claim that they are actually promoting human rights around the globe. Surely, the innocent children killed in Yemen by US-made weapons were no threat to the West’s efforts towards global human rights proliferation.

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