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Volume 2, Number 13               May 5 - 11,  2002                     Quezon City, Philippines

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Special Report:
United States Profiting from War?

A special report prepared by IBON Foundation, an independent research think-tank, on the U.S. military-industrial complex (reposted from IBON Features)

IBON Features

U.S. Military-Industrial Complex: Profiting from War (Part 1)

Bush's War on Terrorism Boosts Military-Industrial Complex (Part 2)

Top U.S. Defense Corporations (Sidebar)

Lockheed Martin

Lockheed Martin is the world’s largest weapons manufacturer, a major player in the areas of nuclear weapons and ballistic missile defense. The company got over $15 billion in contracts from the Pentagon in 2000, plus an additional $2 billion for nuclear weapons design work from the Department of Energy.

Lockheed Martin is the prime contractor for the Trident II Submarine-Launched Ballistic Missile (SLBM), a multiple-warhead, long-range missile that is produced for deployment on the Trident submarine. The Trident II is the only long-range U.S. nuclear missile currently in production.

Even as it profits from working on the next generation of nuclear weapons, Lockheed Martin is also heavily invested in ballistic missile defense.

Lockheed Martin’s global presence stems from its role as the world’s largest arms exporting company. Its most lucrative export item is the F-16 combat aircraft. The company has sold over 3,000 F-16s to overseas customers since the mid-1970s, and the client list for the plane includes Israel, Turkey, Pakistan, Indonesia, Taiwan, South Korea, Thailand, Egypt, and Venezuela. Lockheed Martin F-16s are co-produced in 10 countries, including Turkey, where an F-16 assembly line in Ankara employs 2,000 workers.

In late 2001, the company won what has been touted as the largest defense contract in history, a $19 billion development contract for the $200 billion Joint Strike Fighter (JSF) program. Plans call for producing variants of the JSF for the U.S. Air Force, Navy, and Marines, as well as for the Navy and Air Force of the United Kingdom. Other countries that have been discussed as potential customers for this world aircraft are Germany, Turkey, and Israel.


Boeing is the world’s biggest commercial jet producer, NASA’s largest contractor, one of the Pentagon’s top contractors, and the United States’ largest exporter. Boeing and its subsidiaries employ almost 200,000 people in 60 countries and 26 American states, with customers in 145 countries, and manufacturing operations throughout the United States, Canada, and Australia. Major operations are in Seattle, Washington; Southern California; Wichita, Kansas; and St. Louis, Missouri. Boeing has recently expanded or opened offices in Brussels, Tokyo, Beijing, Hong Kong, London, Paris, Moscow, Ghana and South Africa. Since 1997, when Boeing acquired defense giant McDonnell Douglas, Boeing has ranked as the Pentagon’s No. 2 contractor, second only to Lockheed Martin.

After the September 11th attacks, Boeing’s stock plummeted 16.8%. Sales to commercial airlines constitute 60% of Boeing’s business. With decreasing orders for commercial aircraft, Boeing expects to lose production of more than 1,000 airplanes. Hence, Boeing is anticipating having to lay off as many as 30,000 employees by the end of 2002.

Although it is not specifically involved in the development of nuclear weapons, Boeing’s lead role in the National Missile Defense (NMD) system will have an impact on the future role of nuclear weapons in the United States and in the world. Boeing’s Space and Communications Group division is involved in everything from operating the Space Shuttle, to creating new satellite-based information and communications services, and overseeing many of the missile defense programs.

Together with Bell Helicopter Textron, Boeing is developing the troubled V-22 Osprey aircraft for the Marine Corps, while Sikorsky and Boeing have joined together to build the RAH-66 Comanche combat helicopter for the Army. Buying nations include the United Kingdom, Turkey, Israel, Egypt, Saudi Arabia, Greece, South Korea, Taiwan, and Brazil.

Boeing also has a role in the development of each of the three next-generation fighter aircraft, all of which were conceived during the Cold War. These include the $62 billion F-22 being built with Lockheed Martin for the Air Force, the $46 billion F/A 18 E-F Super Hornet being built by Boeing for the Navy, and potentially the $200 billion Joint Strike Fighter to be used by the Marines, Navy and the Air Force. Both Boeing and Lockheed Martin had been competing for the JSF contract. In late October 2001, the Pentagon awarded the JSF contract to Lockheed, but there has been discussion of sharing some of the work with Boeing.


Raytheon is the third largest defense contractor in the United States, behind Lockheed Martin and Boeing. The Massachusetts-based conglomerate received more than $6.3 billion in Pentagon contracts in 2000, accounting for over 37% of the firm’s $16 billion in revenues. By its own accounting, the company is involved in over 4,000 weapons programs. As its VP for Business Development Tom Culligan puts it, “As a top tier defense electronics company, our forte is to be a provider to major platform manufacturers, which means you see Raytheon’s brand name everywhere from tanks and rifles to ships, aircraft and UAVs (unmanned aerial vehicles).”

Raytheon’s best-known product is probably the Patriot air defense missile, which received massive publicity during the 1991 Gulf conflict when it was used to defend against Iraqi Scud missiles.

Another high-visibility system produced by Raytheon is the Tomahawk land attack missile, which company promotional materials describe as the U.S. Navy’s weapon of choice. According to Raytheon, Tomahawk has played a crucial role in several theater operations including: Operation Desert Storm, Bosnia, Iraq and Kosovo. Over 300 Tomahawks were used in Operation Desert Storm alone. Since Desert Storm in 1991, more than 1,000 Tomahawks have been fired.

Other Raytheon missile systems include the AIM-65 Maverick, an air-to-surface missile that the company describes as the most widely used precision guided munition in the free world and integrated on virtually every fighter aircraft in the free world ranging from the F-4 Phantom, F/A-18 Hornet, F-16 Falcon, AV-8B Harrier, the JAS-39 Grippen, and most recently, the P-3C Orion ; the AIM-9 Sidewinder air-to-air missile; and the top-of-the-line AIM-120 AMRAAM (Advanced Medium Range Air-to-Air Missile), which has been sold to the U.S. armed forces along with more than 20 other nations, including recent controversial offers to Thailand and the United Arab Emirates.

Raytheon also specializes in radar, surveillance, and targeting systems that are used on most U.S.-produced combat aircraft, including the Air Force F-15, F-16, and F-22 fighter planes; the Navy’s V-22 Osprey tilt-rotor aircraft; and the U.S. Special Forces AC-130U and AC-130H airborne gunships which have been heavily utilized in the war in Afghanistan. Raytheon calls this latest line of equipment the Terminator family of targeting systems.

The company is also a major arms exporter, with billions in overseas arms sales in the past decade to a client list that includes Israel, Egypt, Saudi Arabia, Turkey, Indonesia, Malaysia, Oman, Singapore, Greece, Taiwan and South Korea.

General Dynamics

General Dynamics (GD) is headquartered in Falls Church, Virginia, and employs approximately 46,000 people worldwide. GD and its subsidiaries have facilities throughout the United States, including Connecticut, Rhode Island, Maine, Massachusetts, California, Vermont, Pennsylvania, Arkansas, Ohio, Washington, North Carolina, and Virginia, and international offices in Italy, England, and Canada.

GD operates in four main areas:

  • Marine Systems - producing warships and nuclear submarines;

  • Aerospace - making business jets;

  • Information Systems and Technology - designing command and control systems; and

  • Combat Systems - making tanks, amphibious assault vehicles, weaponry, and ammunition.

General Dynamics subsidiary, Electric Boat of Groton, Connecticut builds the Seawolf attack submarines; Bath Iron Works of Bath, Maine builds the DDG 51 destroyers; Land Systems of Sterling Heights, Michigan builds the M1 tank; and Gulfstream Aerospace of Savannah, Georgia makes business jets. GD Marine Systems is the U.S. Navy’s leading supplier of combat vessels including nuclear submarines, surface combatants, and auxiliary ships.

General Dynamics Armament Systems (GDAS), a division of General Dynamics, bought Saco Defense in June 2000. Saco Defense, one of the world’s leading producers of small and medium caliber machine guns and cannon barrels and specializes in automatic weapons for the military, is now called General Dynamics Weapons Systems.

Most recently, GDAS was awarded a $39 million contract from the U.S. Army for M2 machine guns, gun bolts, and barrels. The company also received a $126.4 million order from the U.S. Army and Air Force for HYDRA-70 rocket systems, with a maximum potential value of $1.2 billion over the next five years.

The U.S. government has facilitated the sales and giveaways (through its Foreign Military Sales and Excess Defense Article programs) of M60 machine guns to Panama, Peru, Colombia and Jordan; and M2 machine guns to Egypt, Greece, Thailand and Tunisia.

Northrop Grumman

Northrop Grumman is a Los Angeles-based company that manufactures planes and bombers dropping munitions on Afghanistan, including the B-2 bomber, the F-14 fighter. The company also makes the much-praised unmanned Global Hawk. The $10 million per copy Global Hawk has been deployed to Afghanistan despite the fact that it had not completed its testing requirements.

The company boasts that it has the capability to meet current and emerging national defense needs, including anti-terrorism and homeland security.

In addition to its planes and bombers, the company’s Maryland based Electronic Systems division makes high tech systems like the Airborne Warning and Control Systems (AWACS), a control center and a huge radar disc mounted atop a Boeing 707, which serves as the airborne nerve center for a military air campaign.

Northrop Grumman is also responsible for ALQ-15 jamming device, used to protect jets from enemy radar-guided missiles. As David Steigman, senior defense analyst for the Teal Group, boasts, Northrop Grumman’s role is supplying the command control communications and the intelligence surveillance systems to find the bad guys and bop them in the head.

When Wall Street opened again on September 17, 2001, Northrop Grumman was ready to bob those bad guys and its stock had risen 16% to $94 a share in anticipation of the coming war. Two days after bombing in Afghanistan began, Northrop Grumman’s stock had reached a three-year high of $107.60 a share on the New York Stock Exchange. The future looks bright and the company has job openings for more than 1,000 employees. According to a recent article in the financial magazine Barrons, Northrop Grumman is now seeking $2 billion in loans and equity investment to expand business opportunities and acquisitions.


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