Crisis in Ukraine is a boon for U.S. weapons producers
The Liberal government’s budget on Thursday included a whopping half-billion dollars worth of weapons to be funneled to the Ukrainian government. Weapons builders are planning on profiting nicely as arms flow to Ukraine and to NATO members.
Deputy Prime Minister and Finance Minister Chrystia Freeland’s budget stated, “Budget 2022 proposes to provide an additional $500 million in 2022-23 to provide further military aid to Ukraine.” The budget reminded readers that the federal government has already provided, “more than $90 million in military aid, and is providing military aid—both lethal and non-lethal—to support Ukraine in its efforts to defend its sovereignty.”
Companies that build these weapons, such as soldier-launched Javelin anti-tank missiles, are expecting to reap big profits from the rush to arm Ukrainians to defend against the Russian invaders. The Canadian military has apparently exhausted its stockpile of anti-tank missiles after shipping the lot to Ukraine, so these will need to be replaced, in addition to acquiring more for future shipments.
Business media in the United States where these weapons are built are expecting healthy profits over the long term from the rush to buy weapons caused by the Russian invasion and renewed global tensions.
“U.S. arms manufacturers are not cashing in directly from the thousands of missiles, drones and other weapons being sent to Ukraine, but they do stand to profit big-time over the long run by supplying countries eager to boost their defenses against Russia,” reports AFP.
“If 1,000 Stingers and 1,000 Javelins get shipped to Eastern Europe each month for the next year, which is not unlikely given the current pace, in our view, we think it would equate to $1 billion to $2 billion in revenue for both program manufacturers, which is material,” said Colin Scarola of CFRA, an investment research firm to AFP. These weapons are built by Lockheed-Martin and Raytheon Technologies, two of the world’s biggest weapons-makers.
Disarmament groups in Canada such as Project Ploughshares have warned the government that there are few controls over these weapons once shipped to Ukraine, and could end up on the global black market for arms.
The profits for U.S. weapons makers could extend far beyond small missiles to much larger and expensive weapons system – purchases driven by rising global tensions between the superpowers.
US defense contractors see longer term benefits from war in Ukraine as more orders for weapons are expected from NATO nations https://t.co/TeYrP9r3Uw— David Pugliese (@davidpugliese) April 4, 2022
AFP reports that some weapons manufacturing executives hinted when they last released quarterly results in late January that the situation around the world would benefit them.
“Greg Hayes, Raytheon’s CEO, said that rising tensions in Asia, the Middle East and Eastern Europe would lead to higher international sales — not right away but later in 2022 and beyond. His counterpart at Lockheed-Martin, James Taiclet, said he observed ‘renewed great power competition’ that could trigger higher US military spending,” said the report.
The executives even have a word for it – “F-35-ification” – a term drawing on the rush of Germany and Canada to purchase multi-billion dollar fleets of F-35 stealth fighters made by Lockheed Martin.
Read “U.S. defense contractors see longer term benefits from war in Ukraine,” by AFP on Saturday April 2, 2022
(Cover: Kharkiv, Ukraine – January, 31, 2022: Ukrainian soldiers in camouflage are walking with backpacks on a snowy road. Soldiers prepare to defend Ukraine from Russian attack. Via Shutterstock)