10 companies profiting the most from war

[MrScorpio]

The business of war is profitable. In 2011, the 100 largest contractors sold $410 billion in arms and military services. Just 10 of those companies sold over $208 billion. Based on a list of the top 100 arms-producing and military services companies in 2011 compiled by the Stockholm International Peace Research Institute (SIPRI), 24/7 Wall St. reviewed the 10 companies with the most military sales worldwide.

These companies have benefited tremendously from the growth in military spending in the U.S., which by far has the largest military budget in the world. In 2000, the U.S. defense budget was approximately $312 billion. By 2011, the figure had grown to $712 billion. Arm sales grew alongside general defense spending growth. SIPRI noted that between 2002 and 2011, arms sales among the top 100 companies grew by 51%.

However, the trend has recently reversed. In 2011, the top 100 arms dealers sold 5% less compared to 2010. Susan Jackson, a SIPRI defense expert, said in an email to 24/7 Wall St. that austerity measures in Western Europe and the U.S. have delayed or slowed the procurement of different weapons systems. Austerity concerns have exacerbated matters. Federal budget cuts that took effect in March mean military spending could contract by more than $500 billion over the coming decade unless policymakers negotiate a pullback on the mandated cuts.

In addition, the U.S.' involvement in conflicts abroad continue to wind down. The last American convoy in Iraq left the country in December 2011. Troop withdrawals from Afghanistan also began in 2011. Finally, SIPRI pointed out sanctions on arms transfers to Libya have contributed to declining arms sales.

Many defense contractors are looking overseas to make up for slowing sales in the U.S. and Europe. Arms producers are especially keen on Latin America, the Middle East and parts of Asia, Jackson said. For instance, BAE is securing contracts with Saudi Arabia. Meanwhile, the chief financial officer of Northrop Grumman has recently indicated his company may sell its Global Hawk airplane to South Korea or Japan.

Based on the SIPRI report, 24/7 Wall St. reviewed the 10 biggest weapons companies. Arms were defined as sales to military customers, either for procurement or for export, but do not include sales of general purpose items, such as oil or computer equipment. We looked at sales figures for two years through 2011, among other metrics. Here are the 10 companies that profit the most from war:

The 10 biggest war profiteers: http://www.usatoday.com/story/money/business/2013/03/10/10-companies-profiting-most-from-war/1970997/#.UT5ITmPNxq4.tumblr

[libodem]

1. Thanks Mr. S

Most excellent information.

[niyad]

2. k and r

[dmr]

3. K&R

[LuckyLib]

4. K & R!!!

[adieu]

5. Any company selling weapons overseas

should be arrested or dissolved for treason. Selling arms to another country is treason. Done. Then, don't buy them here. That's the way to force these companies off the government teat. They're making arms not because of security of a country, but because it's easy money.

Well dammit, go innovate and be the next Apple, not the next Steve Ballman led Microsoft.

[Initech]

6. Bush was right about one thing: money trumps peace.

[Egalitarian Thug]

7. K&R Pentagon's no-bid contracts triple in 10 years of war.

As if war profiteering were not bad enough, this article points out just how large this bottomless trough of corporate welfare has been grown.

The bomb fighting contract is a small example of a problem that’s been exacerbated by 10 years of war: awarding contracts without competition. While the Pentagon says its overall level of competition has remained steady over the past 10 years, publicly available data shows that Defense Department dollars flowing into non-competitive contracts have almost tripled since the terrorist attacks of 9/11. According to analysis by the Center for Public Integrity’s iWatch News, the data shows that the value of Pentagon contracts awarded without competition topped $140 billion in 2010, up from $50 billion in 2001.

Reports of limited and no-bid contracting, particularly in Iraq and Afghanistan, captured headlines in the early days of the Coalition Provisional Authority in Iraq, when companies like Custer Battles, later convicted of fraud , were given sole-source security contracts for security and reconstruction, including one worth $16.5 million to provide security at Baghdad International Airport. Among the accusations eventually levied against the company, which had no prior track record, was that it charged grossly inflated prices, in part by using fictitious companies to “lease” equipment to the government.

In 2009, President Obama followed up those campaign promises with a memo directing a broad overhaul of government contracting, including limits to sole-source and non-competitive contracting. “Excessive reliance by executive agencies on sole-source contracts (or contracts with a limited number of sources) and cost-reimbursement contracts creates a risk that taxpayer funds will be spent on contracts that are wasteful, inefficient, subject to misuse, or otherwise not well designed to serve the needs of the Federal Government or the interests of the American taxpayer,” the president wrote in the 2009 memorandum, citing reports by multiple government agencies. Moving back to full and open competition, the memo continued, could save the government billions of dollars. But in two-and-half years, the Obama administration has made no progress in competing military contracts.

Even the Pentagon’s senior leadership has acknowledged the problem: a 2010 memo by Undersecretary Ashton Carter, the Pentagon’s senior procurement official, called for greater competition, along the lines of the earlier Obama memo, and promised the Pentagon would make its contracting process more open to competitive bidding. “Maximize the use of multiple-source, continuously competitive contracts,” a briefing accompanying the memo states.

And the beat goes on...

[patrice]

8. END!!! War Capitalism!

[WillyT]

9. K & R !!!

[ReRe]

10. K&R

There goes 5/8ths of my dollar, as I sit here eating my GMO popcorn in between asthma attacks.

[donheld]

11. This should have been kicked and recommended all over the place.

People need to read this NOW.