War: what’s it good for? absolutely nothing!’, sang Motown star Edwin Starr in his famous 1970s anti-war song. The war in Ukraine proves once again that Starr’s chorus should have been one line longer: “…except for arms manufacturers.” Because for Lockheed-Martin, Raytheon and other military tech giants, the Russian invasion of Ukraine and the new arms race between East and West are a gold mine.
For example, while most stock markets have plummeted since the war in Ukraine began, the share price of the world’s largest arms manufacturer, Joint Strike Fighter builder Lockheed-Martin, rose 17 percent to $456 a share, the all-time high for the US company. . This is due in no small part to the hundreds of infrared-guided Javelin anti-tank missiles with which the Ukrainian army inflicts such heavy losses on Russian T-72 tanks.
‘Saint Javelin’, as the 1.10 meter long weapon is now known, has become a symbol and quasi-patron saint of the Ukrainian resistance, complete with her own icon: a Mary Magdalene wreathed by a blue-yellow halo, armed with a rocket launcher worth more than 150 thousand euros each.
Javelin makers Lockheed-Martin and Raytheon have delivered so many pieces in recent years that Russian Defense Minister Shoygu recently complained that Ukraine has more Javelins than many NATO countries.
Javelins played a major supporting role in the first impeachment proceedings against US President Trump, who asked Ukrainian President Zelensky in a phone call in 2019 for a “favor” — helping discredit the Russia investigation against Trump — after Zelensky told he wanted to buy more Javelins.
Lockheed-Martin is by no means the only arms manufacturer to benefit from the war in Ukraine – after a few more difficult years on the stock market for the defense industry as a result of the corona pandemic. For example, the Turkish Baykar supplied the Bayraktar TB2 drones with which the Ukrainian army bombed a military convoy of the Russians in Malyn, in the north of Ukraine, over the past weekend, as witnessed by aerial images.
The American Raytheon, the world’s second largest arms manufacturer, makes the Stinger anti-aircraft missiles, hundreds of which have been supplied by the Dutch government, among others, to Ukraine. Raytheon has jumped almost 15 percent since the Russian invasion.
The Swedish Saab (price jump: +42 percent) and the French Thales (+22 percent) also thrive thanks to their thousands of anti-tank weapons on the battlefield, as does the American supplier of encrypted radios L3Harris Technologies (+18 percent).
The fact that one after the other European government is now announcing that it wants to invest considerably more money in defense – Germany alone is already allocating an extra EUR 100 billion – is not doing the arms industry any harm either. The German radar maker Hensoldt (+99 percent), the Italian helicopter manufacturer Leonardo (+26 percent) or the largest European arms manufacturer, the British BAE Systems (+20 percent), all experience hosanna days at the fair.
Many arms manufacturers had long anticipated the war bonanza. At the end of January, Raytheon CEO Greg Hayes spoke to investors about ‘the tensions in Eastern Europe, the tensions in the South China Sea’. Hayes: ‘All those things are putting pressure on defense spending there. So I fully expect that we will reap some benefits from that.”
Defense expert Keith Hartley, emeritus professor of economics at the University of York, expects that the major arms manufacturers will not so much earn a lot of money from the war in Ukraine. But to the new arms race between East and West that has been set in motion by the Russian invasion. ‘Many of the weapons that still go to Ukraine come from the stocks of NATO countries. There is no time to order new, advanced weapons, by the time they are ready the war will be over’, Hartley thinks.
“If the war continues – and God forbid – Russia will almost certainly occupy most or all of Ukraine. In that case, the Ukrainians may start a guerrilla war, for which they will need, for example, rifles, hand grenades, rocket launchers and improvised bombs.’
The greatest demand for weapons will come from NATO, according to Hartley. They are going to increase their defense spending given the enormous uncertainties on the world stage. ‘That is why we are now seeing the shares of major arms manufacturers rise. What if Putin also sets his sights on the Baltic States? And what if China, emboldened by the war in Ukraine, attacks Taiwan? Unfortunately, the world is going to become a less safe place, I’m afraid.’