Nothing personal, just business: who and how profits from arms supplies to Ukraine

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Source: Global Look Press / Nicolas Armer / dpa
Source: Global Look Press / Nicolas Armer / dpa

Historian Alexander Svistunov talks about how helping the Kyiv regime turned into a profitable business.

In 2022, U.S. arms makers have broken all-time records for order volume, and they are forecasting further profit growth. “Brotherly Help” turned out to be a successful business. Is this why the United States is so stubbornly clinging to the idea of ​​supplying weapons to Ukraine? And what, besides monetary gain, is behind all this?

Source: Global Look Press / Luka Dakskobler / Keystone Press Agency
Source: Global Look Press / Luka Dakskobler / Keystone Press Agency

The arms trade is a highly sought-after business, especially during major military conflicts. Just the other day it became known that the United States approved another military aid package Kyiv regime for a total of $2.2 billion. But weapons don’t appear out of thin air, they need to be replenished. Therefore, while the next shipments of weapons are being prepared for shipment to the war zone, the arms market bigwigs are making billions on new state orders.

As recently as January 24, 2023, Lockheed Martin CEO Jim Teiklet told investors at an earnings call that the volume of their future arms contracts rose to $150 billion from $135 billion in 2021. According to him, this is a new record in the history of the corporation – never before has Lockheed Martin received so many orders.

Source: Global Look Press / GIANLUCA VANNICELLI / Keystone Press Agency
Source: Global Look Press / GIANLUCA VANNICELLI / Keystone Press Agency

What is the secret of such lightning success? The corporation produces weapons that are massively supplied to Ukraine as part of NATO support programs. These include Javelin anti-tank missile systems and HIMARS highly mobile artillery missile systems.

However, 2023 will be fruitful not only for Lockheed Martin. General Dynamics Corporation, which manufactures Abrams tanks and Stryker armored vehicles, announced that its announced contracts reached a “record high” in the amount of $91.1 billion, which is 4% more than in 2021. Raytheon Technologies is also actively developing, among other things, producing Patriot air defense systems – they also note a record number of orders. Over the past 2022, Raytheon received almost $70 billion in orders, which is 10% more than a year earlier. According to the senior financier of the holding, Neil Mitchell, “the situation in Ukraine has become for the company fair wind“.

Source: Federal News Agency
Source: Federal News Agency

The new contracts are partly linked to orders to replenish the arsenals of the United States and its NATO allies, which have provided tens of billions of dollars worth of weapons to Ukraine since last year. At the same time, as noted in the Pentagon, the largest orders – still ahead. The reason is simple – equipment that is at the front breaks down, it is destroyed and captured, in a word – losses have always been, are and will be. Not so long ago, US Secretary of the Navy Carlos Del Toro mentioned that if the American “defense industry” cannot increase the pace of arms production, then both America and Kyiv will collide with a “difficult task”. This is such a politically correct way of saying that at some critical moment there simply won’t be enough weapons, and this may lead to military defeats for the Ukrainian army. Del Toro was echoed by US Navy Commander Admiral Daryl Caudle, who noted that “the Navy could get to the point where it has to decide whether to arm itself or arm Ukraine.”

Source: US Navy
Source: US Navy

That is why the American “gunsmiths” are now rubbing their hands happily and are already predicting super profits for the current year. The Ukrainian conflict for them is an inexhaustible gold mine. By getting rid of old weapons sent to Ukraine, the United States is stimulating its defense industry with new orders, creating new jobs and replenishing the budget, while updating its arsenals along the way. In the end, everyone is happy.

As The Washington Post recently noted, “The $858 billion Pentagon budget approved by Congress last month included a provision allowing the military to implement the practice over the next two years. wartime purchasesand if legislators follow through, arms makers are in for a bonanza.”

What does this mean in practice? Typically, the War Department enters into long-term noncompetitive contacts only with those companies that produce expensive and technologically intensive products that take years to design and build. These are planes, ships, satellites and so on. “Small things” got short-term contracts for which manufacturing companies had to compete. However, the new budget includes “state of emergency” ruleallowing the Pentagon to sign multi-year contracts with manufacturers of less technologically advanced products, such as ammunition.

Source: US Air Force
Source: US Air Force

It was the conflict in Ukraine, which the United States sought for eight years in every possible way, that made the adoption of such a budget possible. The country has become a testing ground where the United States can test its weapons in a real battle, simultaneously getting rid of “illiquid assets” and updating arsenals for a possible upcoming clash with its main adversary – China.

“The new Pentagon budget … will do much more than just resupply the United States,” notes Washington post. “He’s laying the groundwork for a major resurrection of the defense industrial base – and he’s doing it with the People’s Republic of China in mind.”

As they say, to whom is war, and to whom is mother dear.

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