Weapons Contractors Thrive Despite Pandemic, Supply Chain Issues

America’s top weapons contractors had another banner year in 2021 despite labor and supply chain issues linked to the COVID pandemic and other global economic challenges, according to the latest edition of the Defense News tally of the Top 100 defense companies for 2021.

Lockheed MartinLMT
topped the list for the 23rd year running, with defense-related revenues of over $64 billion, which accounted for a whopping 96% of the company’s total for the year.

The top five companies on the list were all American firms, as might be expected given a Pentagon budget of over $800 billion per year and the dominance of U.S. companies in the international arms market. The five – Lockheed Martin, Raytheon TechnologiesRTX
, BoeingBA
, Northrop GrummanNOC
, and General DynamicsGD
, in that order – split over $200 billion in defense-related revenues among them, over 28% of the total received by the top 100 firms.

The bonanza for weapons makers is likely to continue this year and next, as hawks in Congress compete over how much to add to the Pentagon’s already substantial budget request for Fiscal Year 2023, pushing the total for the Department of Defense and work on nuclear weapons at the Department of Energy to $850 billion or more. That’s far more than during the peak years of the Korean or Vietnam Wars, and well over $100 billion above the largest spending year during the Cold War. And that’s not even counting the contractor’s share of the over $23 billion in military spending contained in two emergency aid packages for Ukraine that passed earlier this year. Overall, more than half of all of the above-mentioned funds will go to contractors, with the top five leading the way.

So, whatever difficulties arms industry executives may cite, the reality is that they and their companies are likely to remain fat and happy regardless of what happens to the rest of the economy. The CEO’s of the top five together had compensation packages in excess of $105 million, figures which ranged from 164 times (for Lockheed Martin) to 254 times (for General Dynamics) the median pay for workers at those firms.

Raytheon Technologies CEO Gregory Hayes has touted the war in Ukraine and other global hotspots as great financial news for his firm:

“…[W]e are seeing, I would say, opportunities for international sales . . . 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.”

The key weapons systems supplied to Ukraine by the United States, from Stinger anti-aircraft missiles (Raytheon), to Javelin anti-tank missiles (Raytheon in partnership with Lockheed Martin), to the highly touted HIMARAR
S rocket/artillery system (Lockheed Martin) are all from the top firms. Most of the weapons supplied so far have come from Pentagon stocks, but the companies will cash in once those stocks are replenished with comparable or newer, more expensive versions of these systems.

Overall, the tenor of defense industry leaders has been to posture as defenders of democracy due to the use of their weapons by Ukraine in its efforts to push back the Russian invasion of that country, even as they fail to mention sales to repressive regimes like Saudi Arabia, the United Arab Emirates (UAEUAE
), Egypt, and the Philippines that have killed thousands of their own citizens while – in the case of Saudi Arabia and the UAE – spearheading an invasion in Yemen that has resulted in nearly 400,000 direct and indirect deaths.

You can count on the arms industry to do everything in its power to keep the weapons gravy train running, making use of millions in annual campaign contributions, 700 paid lobbyists, and millions in contributions to sympathetic think tanks that frequently take industry-friendly positions.

The ultimate question is whether the industry’s efforts are a net gain or a net loss for U.S. security. In other words, is what’s good for Lockheed Martin and its cohorts good for America? At a time when excess military spending often comes at the expense of urgent, non-military challenges from pandemics to climate change to fighting global poverty, it’s a question that the public and members of Congress should be asking before throwing hundreds of billions of tax dollars at the military-industrial complex.