Yet the largest ground war in Europe since World War II isn’t translating into boom times for U.S. defense contractors. Hobbled by supply chain disruptions, a tight labor market and a Pentagon procurement process that can take years, arms makers have been struggling to respond to the soaring demand.
Lockheed Martin Corp., the world’s largest defense company by revenue—and whose Javelin antitank missiles and Himars rocket launchers have been central to Western support for Ukraine—said last week that it expects annual sales to shrink for the second year in a row.
Weapons suppliers, like Lockheed, and Raytheon Technologies Corp., which coproduces the Javelin and makes Stinger antiaircraft missiles, don’t expect a bump in Ukraine-driven sales to emerge until 2024.
[The boom will come. The US has supplied Ukraine from existing armament levels, which will have to be replenished soon. We have not shifted to a “war footing” where production goes directly to the front lines. One point that may emerge in that phase, though, is how decades of consolidation in the defense-contractor industry could make it very difficult to achieve “war footing” levels of production if and when we really need it. It’s something to watch, especially if this conflict keeps going for much longer. — Ed]
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