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Russian Threat Is Good for Business, U.S. Defense Contractors Tell Investors
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stors_russian_threat_is_good_for_20160819/
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Posted on Aug 19, 2016
Ian Burt(https://www.flickr.com/photos/oddsock/) /
(CC-BY-2.0)(https://creativecommons.org/licenses/by/2.0/)
As the media and politicians work to cast Russia as a great threat to
Americans, the arms industry is pressuring NATO member states to spend at
least 2 percent of their gross domestic products on weapons and defense
systems.
Lee Fang reports(https://theintercept.com/2016/08/19/nato-weapons-industry/)
at The Intercept:
Retired Army Gen. Richard Cody, a vice president at L-3 Communications, the
seventh largest U.S. defense contractor, explained to shareholders in
December that the industry was faced with a historic opportunity. Following
the end of the Cold War, Cody said, peace had "pretty much broken out all
over the world," with Russia in decline and NATO nations celebrating. "The
Wall came down," he said, and "all defense budgets went south."
Now, Cody argued, Russia "is resurgent" around the world, putting pressure
on U.S. allies. "Nations that belong to NATO are supposed to spend 2 percent
of their GDP on defense," he said, according to a transcript of his remarks.
"We know that uptick is coming and so we postured ourselves for it."
Speaking to investors at a conference hosted by Credit Suisse in June,
Stuart Bradie, the chief executive of KBR, a military contractor, discussed
"opportunities in Europe," highlighting the increase in defense spending by
NATO countries in response to "what's happening with Russia and the
Ukraine."
The National Defense Industrial Association, a lobby group for the industry,
has called on Congress to make it easier for U.S. contractors to sell arms
abroad to allies in response to the threat from Russia. Recent articles in
National Defense, NDIA's magazine, discuss the need for NATO allies to boost
maritime military spending, spending on Arctic systems, and missile defense,
to counter Russia.
Many experts are unconvinced that Russia poses a direct military threat. The
Soviet Union's military once stood at over 4 million soldiers, but today
Russia has less than 1 million. NATO's combined military budget vastly
outranks Russia's - with the U.S. alone outspending Russia on its military
by $609 billion to less than $85 billion.
And yet, the Aerospace Industries Association, a lobby group for Lockheed
Martin, Textron, Raytheon, and other defense contractors, argued in February
that the Pentagon is not spending enough to counter "Russian aggression on
NATO's doorstep."
