Ukraine war: will the military giants lobbying the Washington legislature be the biggest winners?

Ukraine war: will the military giants lobbying the Washington legislature be the biggest winners?

The war in Ukraine means serious business opportunities for Western, especially American defense manufacturing companies, and based on the known facts, it can be said that Lockheed Martin, Raytheon and Northrop Grumman are among the biggest "winners" of the Eastern European conflict. are. In their case, the share price has risen significantly since the beginning of the Russian military invasion, the aforementioned Lockheed, for example, could register an increase of about 38 percent in 2022.

The numbers of the companies that play the biggest role in global arms production are instructive . Based on data analysis for the year 2021, a list of the companies that sell the most weapons in the world has been prepared, and at the top of the list is Lockheed Martin, the manufacturer of the F-35 fighter-bomber aircraft, with revenues of $ 60 billion, followed by the Stinger missiles Raytheon, which is considered a real superpower in its production, with 41 billion dollars, followed by Boeing and Northrop Grumman, and the Big Five is rounded off by the defense manufacturing company General Dynamics.

has offered $ 29.3 billion through February 2023, the first year of the war in the East Stockholm International Peace Research Institute (SIPRI). dollars (roughly HUF 224,000 billion at today's exchange rate, nearly nine times the Hungarian budget revenues) in 2021, i.e. the last year before the war.

The Presidential Drawdown Authority ( PDA ) is a rapid response legal instrument that allows the US government to provide emergency military assistance to US allies and partners. The Biden administration used this authorization to quickly acquire high-value weapons from the US stockpile and ship them to Ukraine, then replace them using funds from Congress.

This requires higher volume production. The dominant arms manufacturing companies have therefore accelerated production since the beginning of the war in order to stockpile the weapons that the USA intends to send to Ukraine. For example, in the case of the Javelin missile, which can be launched from the shoulder and is designed to hit targets at a distance of nearly 3 miles, the demand in the military industry is already so great that Lockheed Martin has announced that it will increase production from 2,100 to 4,000 per year, that is, it will double production.

High-tech defense systems manufactured by Lockheed are expected to be highly effective against Russian air attacks. The Ukrainian government has also indicated its need for Lockheed's High Mobility Artillery Missile System (HIMARS) in Washington, and the United States had sent 20 missile defense systems to Ukraine by December of last year, and was working on the production of another 18 missile defense systems, according to reports at the time, at a cost of about $1.1 billion . According to News magazine . Lockheed also makes another precision missile system that has already been sent to Ukraine. In November, the U.S. military awarded Lockheed an order worth a total of $521 million to replenish supplies sent to Ukraine.

Meanwhile, Raytheon won a $1.2 billion order to manufacture six anti-aircraft (that is, surface-to-air) missile systems. The company is a co-manufacturer of Javelin missiles and also manufactures Stinger missiles. In May of last year, the United States placed an order for a total of 1,300 Stinger missiles worth $624 million - according to had not been seen in two decades. "In the first ten months of the war, Ukraine used as many Stinger anti-aircraft missiles as Raytheon produced in 13 years," noted Breaking Defense magazine, a fact that clearly shows the dynamic growth of the military industry's needs.

Northrop Grumman, a leading munitions and aircraft technology company, stands to profit from the war in Ukraine in the long run due to increased demand for war materials, and experts and company executives see this trend as only exacerbated by the conflict in Ukraine. In late January 2023, it was announced that Northrop Grumman and Global Military Products were competing for a $522.3 million contract to manufacture 155 mm artillery ammunition, and on February 14, the U.S. Army announced that both companies had finally received orders to support Ukraine's military industry. in the war with Russia. The indefinite delivery contract (which does not establish a quantity limit) is for non-standard ammunition.

Among the big business winners of the war Boeing . According to one US government official, about 200 million dollars will be allocated for Boeing weapons, specifically for Boeing-Saab bomber missiles. It is a long-range hybrid weapon that combines two proven tools: the Air Force's small-diameter bomb guided by GPS satellites, which is now widely used, and a military missile, which has been used by Ukrainian forces for some time. Boeing has tested this newer type of modern ballistic missile three times since 2015 in cooperation with Sweden's Saab AB, and one industry official with knowledge of the results said it included an exercise in which it flew more than 81 miles (about 130 kilometers) and GPS -hit a target within 40 inches (102 centimeters) of its target. This is roughly double the range of the current Himars missiles, which have now become a valuable asset for the Ukrainian armed forces. These new developments offer serious potential for the Ukrainian war party.

The large Western arms manufacturers can therefore make good use of the war in Ukraine to test their own developments, in addition to the obvious acquisition of business profits. In the United States, institutionalized lobbying is one of the main means of asserting interests, and with the crucial role of the government and congressional committees in the American political system, decision-makers are directly or indirectly exposed to the activities of arms industry lobbyists. And the mentioned giga companies are trying to make good use of this. In the American model of the separation and balancing of the branches of power, which is considered the "purest" - in addition to the pervasive capitalist traditions - funding distribution is a critical element of public policy, and the military industry has completely integrated its lobbyists over the decades - competing and strongly interacting corporate interests for the purpose of enforcement - into the system of American legislation.