Jason Ditz / AntiWar.com & Paul Sonne / The Wall Street Journal & Seeking Alpha – 2017-01-07 00:45:14
US Arms Makers Rake in Billions Replacing Bombs for US Air Wars
US Arms Makers Rake in Billions
Replacing Bombs for US Air Wars
Jason Ditz / AntiWar.com
(January 6, 2017) — Air Force Chief of Staff Gen. David Goldfein has bragged that the US is “hitting more targets than we’ve ever hit in a long time in Iraq, Syria, and in Afghanistan,” with tens of thousands of bombs dropped in 2016 alone. Those numbers show no sign of getting smaller any time soon.
That’s bad news for the people in those countries the bombs are falling on, and bad news for the taxpayers, but it’s great news for a handful of key US arms makers, who are seeing their sales soar on the orders that the military has placed to replace the dropped bombs and fired missiles.
These bombs aren’t cheap, with even the smaller “dumb bombs” amounting to $30,000 or more, and more advanced technology like Lockheed Martin’s Hellfire missiles costing in excess of $100,000 each. With thousands of Hellfire missiles being fired, that’s a costly proposition.
From the Pentagon’s perspective, the big issue in all of this is that the companies are having trouble escalating production fast enough to meet demand, and they are fretting that bombs are being dropped faster than they’re being replaced.
For companies like Boeing and Lockheed, that’s a good problem to have, with the companies not just seeing record volume in their orders, but juicy margins on rush shipments as the Pentagon keeps finding new explodable stuff to drop things on.
Defense Firms Cash In Amid Soaring Demand for Munitions
Paul Sonne / The Wall Street Journal
(January 5, 2017) — Boeing, Lockheed, BAE ramp up production as surge of airstrikes against Islamic State strains supplies of precise bombs, missiles The makers of precision-guided missiles and bombs are running to keep up with demand as the US military bombards Islamic State from the air.
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WSJ: Boeing, Lockheed benefiting from airstrikes against Islamic State
Seeking Alpha
(January 5, 2017) — Boeing (BA -0.3%), Lockheed Martin (LMT +0.6%) and BAE Systems (OTCPK:BAESY +1.2%) are benefiting from the US military’s increased reliance on air power in the fight against ISIS, as they ramp up production of precision guidance kits that carry missiles and bombs to their targets, Wall Street Journal reports.
The campaign has strained US supplies of the three preferred precision-guided munitions: LMT’s hellfire missile, and Boeing’s small-diameter bomb and joint direct attack munition, or JDAM, according to the report.
The munitions are not cheap: Equipped with sophisticated laser or GPS targeting technology, a single bomb or missile can cost as much as $115 million, and the US Air Force has spent ~$2 billion in precision-guided munitions and dropped more than 40K in the bombing campaign against Islamic State since August 2014, according to Air Force officials.
Boeing says it is producing ~120 GPS guidance kits for the JDAM each day at its plant outside St. Louis, up from ~40 in early 2015, and expects a continuing ramp-up will take JDAM production rates to their highest since the early days of the Iraq War.
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