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Featured, Foreign Policy, International, Politics

Defense Contractors Discuss ‘Benefits’ of Middle Eastern Conflicts

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Major defense contractors Lockheed Martin, Oshkosh and Raytheon appeared pleased this week as escalating conflicts in the Middle East were touted as a reason for investor optimism at a Credit Suisse conference in West Palm Beach.

While defense spending has been a target of budget cuts for the past few years dating back to the budget sequester, this trend was recently reversed with an October budget deal which included $607 billion in additional defense spending.

“Our programs are well supported [in the budget],” said Lockheed’s Executive Vice President Bruce Tanner at the conference. “We think we did fare very well.”

Wilson Jones, president of Oshkosh, noted that countries have shown interest in buying M-ATV armored vehicles made by the company due to “the ISIS threat growing.”

The situation on the ground in Syria and recent downing of a Russian aircraft by the Turkish military has brought defense spending to the forefront of presidential rhetoric. Meanwhile, defense contractors viewed the aircraft downing through a positive lens for their bottom line.

Presidential candidate and United States Senator Rand Paul (R-Ky.), an outspoken critic of defense spending, asked “how is it conservative to pass a trillion dollars in military expenditures?” during an exchange at the November 12th presidential debate. Paul’s criticism directly targeted a proposal by fellow 2016 candidate United States Senator Marco Rubio (R-Fla.), calling for a $1 trillion dollar increase over the next 10 years. Rubio is one of several candidates calling for large scale increases in defense spending.

The perceived need for the U.S. military to operate stealth aircraft like the Lockheed Martin-made F-22, combined with increases in spending by other regional powers like Saudi Arabia and the United Arab Emirates on munitions and other systems for use in operations in Yemen, give defense manufacturers even more reason for a positive outlook.

Given this volatility in the region, the environment also promises to provide a boost for candidates in both parties who can leverage hawkish rhetoric and calls for increased U.S. involvement in the Middle East.

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International, Politics

US Sends 36 F-16s to Iraq, Trains Iraqi Pilots

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In 2003, a US-led invasion all but obliterated Iraq’s air force. After living under US occupation for 8 years, leading to the rise of Al Qaeda affiliated groups in the region, the Middle Eastern nation has plunged into political chaos that may escalate into a civil war. In August of 2013, the US government agreed to send $2.6 billion to Iraq for the provision of an air defense system and contracted with Lockheed Martin Corp to provide the war-torn nation with F-16s. President Obama has also accelerated shipments of surveillance drones to the Iraqi government.

Reuters is reporting that the first of those 36 F-16s are officially ready to ship and will soon be on their way to Iraq. The US government will present the fighter jets to Iraqi Ambassador Lukman Faily at a ceremony tomorrow at a Lockheed Martin plant in Fort Worth, Texas. Iraqi fighter pilots have received F-16 flight training from the US Air Force in Tuscon. In an article by the 162nd Fighter Wing Public Affairs division of the Air National Guard, the Iraqi Air Force Chief was quoted as saying, “They (IqAF pilots) will return to our country – then transfer that American experience of training to the next generation of Iraqi air force pilots.”

Meanwhile, Iraq has also forged military contracts with Russia, and US defense contractors have begun to shift their focus from providing weapons for US military engagements to providing munitions like F-16s to foreign nations overseas.

The US government has often provided military weaponry and training to governments and rebel groups in unstable regions, sometimes leading to catastrophic results, such as when the CIA-trained terrorist Osama bin Laden turned against the US and launched the devastating 9/11 attacks, resulting in the deaths of thousands of Americans. As Iraq descends into a possible civil war, questions are being raised as to whether or not these weapons will remain in the hands of the US-backed government or whether a future political crisis might lead them to be used against Americans.

The US has also provided Iraq with 100 Hellfire missiles, assault rifles, and 11 million rounds of ammunition. In related news, PBS Frontline has just launched a new documentary in which Al Nusra affiliated Syrian rebels describe the training that they allegedly received at the hands of the US government. In January of 2013, the US government sent F-16s to Egypt, just months before a July coup in which the Egyptian military ousted then-President Mohamed Morsi.

As US tax dollars are being used to fund a weapons build-up in the Middle East, the nation faces an unprecedented debt crisis. On the other hand, Lockheed Martin Corp’s stocks are, quite predictably, on the rise.