Which arms mfrs will profit from Ukraine war?

Investment Analysis Clubs Macro Economic Trends and Risks
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War has been good for arms makers since the beginning of time. Which arms manufacturers will profit from replacing the armaments blown up in the Ukraine war?

Ukraine War Spurs Arms Makers to Boost Production

European makers of lower-tech systems and munitions, such as mortars and rounds, are pushing to increase capacity

By Benjamin Katz and Doug Cameron, The Wall Street Journal,
Nov. 24, 2022

…
The ramp-up is playing out in large measure in Europe, where a handful of long-established arms makers have grown accustomed to more modest, peacetime demand for their wares and are now trying to increase capacity to meet an expected crush of orders. Shares of many of these lesser-known international arms players, including Germany’s Rheinmetall AG (RHM | Rheinmetall AG Stock Price & News - WSJ) and Sweden’s Saab (SAABF | Saab AB Stock Price & News - WSJ) AB, have soared on hopes of big orders…

The Pentagon has committed more than $17 billion in weapons and services to Ukraine, most of it drawn from existing stocks. It has also awarded about $3.4 billion in new contracts to replenish domestic and allies’ stocks…

Raytheon Technologies Corp. has cannibalized old Stingers and brought back retirees to boost production that had slowed to a trickle. The U.S. hadn’t ordered the missiles since 2008. L3Harris Technologies Inc., with $200 million in orders for equipment destined for Ukraine, said it has been pulling computer chips from old radios to make new communications gear and avoid missing any Ukraine-related delivery targets. Lockheed Martin Corp. is doubling output of the Javelin antitank missiles it coproduces with Raytheon, and it is boosting output of Himars rocket launchers and GMLRS missiles by 60%…

. Lockheed shares are up 36% since the start of the year. General Dynamics is up 22%, and Raytheon has climbed 12%…[end quote]

President Eisenhower warned about the lobbying power of the military-industrial complex. I have long believed that the U.S. arms manufacturers want to keep a war simmering continuously to keep the production lines going and avoid losing the machinery and expertise.

Declaring the end of history* was slightly premature, to say the least.

Taiwanese leaders have declared in interviews that they are closely studying the Ukraine war to develop strategies and tactics for when mainland China invades Taiwan. They will need many of the same short-range weapons.

U.S. stocks have been depleted by Ukraine. The stocks will need to be replaced. I’m sure that Pentagon planners, who are responsible for strategizing two simultaneous war theaters, will realize that they don’t want a bare cupboard.

It takes time to design and set up manufacturing for modernized weapons. At least in the short-term, the current manufacturers will be getting the contracts.

And…what was that about pulling computer chips from old radios for comm gear? What the heck? Can’t they use modern chips? Can’t they buy comm gear off the shelf since any teenager has communications that Napoleon would have given his eyeteeth for?

Wendy
*https://www.amazon.com/End-History-Last-Francis-Fukuyama-ebook/dp/B003DYGOQO/ref=sr_1_1?crid=2P47POT6LT9C5&keywords=the+end+of+history+fukuyama&qid=1669315413&s=books&sprefix=end+of+history%2Cstripbooks%2C624&sr=1-1

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It has often baffled me why the Russians have not targeted trucks and trains bringing arms into Ukraine from Poland et al or ships heading for Odessa. I suspect that, Taiwan being an island, China could more easily blockade its territory. Since presumably US war ships wouldn’t bring the arms (for similar reasons of our not directly supplying Ukraine), there are few US flagged cargo ships and ships of other nations carrying arms would be subject to being sunk by the Chinese navy. While the US Navy could run a bit of interference, I suspect it would be deemed important to avoid direct action against the Chinese military.

Jeff

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South Korea wants to expand their MIC.

And dont forget about India.

Your investment dollars can find a home.
:alien:
ralph

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Because they are moving targets? Much easier to terrorize the locals, and impress your own citizens, when you go after big, fixed, targets, like power stations and apartment blocks. Nailing a moving target requires either manned aircraft, or more sophisticated drones, than they can buy from Iran.

Of course, the risk in investing in US arms makers, banking on big orders for Ukraine, is if the change in control in the House, cuts off funding, calling it “America first”.

Steve…long Ratheon, has been long for a few years.

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Used to work for a machine tools mfr that made machines used to manufacture military ammunition. I think they were making 4" artillery shells (basically 105mm ammunition). The facility was maybe 20 miles away, so they liked quick access to parts when needed.

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Jeff,

The US has decided there would be direct battle with China.

If China can get there. The jamming of signals may mean none of the Chinese gear works at all. Jets, ships, rockets, etc…wont know much about how to fly sail or fire off. Junk hardware.

The question is does the US have the capacity to overcome the same tactics from China?

We do not know. The entire war could be a sudden flash where everything in the theater wont work.

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Quite a lot of conjecture there. Military projection follows the inverse square law just as much as other energy forms and both the size and the distance differential favor China in any direct localized conflict. Your assumptions about the ability of the US to jam Chinese communications are also subject to the same law - not to mention that, in a fashion similar to how Ukraine is using satellite internet despite their local infrastructure being FUBAR’ed, the Chinese have the same ability (and their own GPS system).

China has more naval vessels than the US (and those are concentrated in Asia, while the US navy is located all over hell and half of Georgia), more troops, more local aircraft and, I suspect, are trained a lot better than Russia’s. The last time the US underestimated China, they were lucky to end up with half of Korea.

Jeff

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Jeff,

Take a look at Snowden’s materials he released and our operations. Do you think China is operating on that level? Not even close. The best they can do is buying Israeli software to spy on their own citizens.

The very good MIT professor Negroponte wrote being digital back in the late 90s. A compilation of Wired Magazine columns he wrote. One was about emails. He pointed out how they flatten the world. He can write someone in Tokyo and the person can see it at breakfast time in a robe at his dining table. Nothing like that was nearly as good for communications globally and it flattened time. Writing an email in Boston to someone else in Boston after work might be seen after his friend in Japan had read his CC copy.

The jamming is well know by both sides. The odd thing is the war games the US engages. The teams never jam the signals while gaming it out. That would hit too close to home and give up our strategies. Of course a ton of jamming will be happening…no gaming it out by our military in public.

If you are captain of a major ship in the Taiwan Straights and the ship does not know anything about direction any longer along with the computers not even functioning…well a rowboat would be of more use.

We say we have no defense against hypersonic weapons? Really? Most if not all of them are equipped for an evasive maneuver. Who says we can not create a reason for them to be evading something that does not exist? Once off course the hypersonic can not get back on course. More importantly using the fuel to be evasive the rocket will fall short.

I will give you another one. If Russia launched an all out nuclear strike her IBCMs are sophisticated. They have chips in them. Who says we can not stop them from detonating?

We keep suggesting we can not trust China creating backdoors in computer chips? Have we created backdoors in computer chips? Most of the chips are of western designs. The CIA and other agencies are not passively keeping to themselves.

Even if Russia built a few of its own military chips we may have insights into the chips’ weaknesses.

Supposition or common sense. It has been decades of spy catches spy military gaming. I hope our guys have been up to something.

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And what did China end up with?

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They ended up retaining China.

The goal of General MacArthur when he raced towards the Yalu River (the China/N. Korea border) was actually to overthrow the Communist regime and put the “Nationalists” (now exiled to Formosa/Taiwan) back in charge. He was backed in this attempt by the “China Lobby” and many in Congress in Washington. To say that he underestimated China is an understatement and it nearly cost the independence of South Korea and ended up putting a dictator in charge of the country.

The US ended up putting a string of dictators (OK, we called them “strongmen”) in charge in the same fashion that we did in South Vietnam and, between 1948 and 1988, there were few democratic elections:

On 15 August 1948, the Republic of Korea was formally established, with Syngman Rhee as the first president.
The administration became increasingly repressive while dominating the political arena, and in 1958, it sought to amend the National Security Law to tighten government control over all levels of administration, including the local units.[34] These measures caused much outrage among the people, but despite public outcry, Rhee’s administration rigged the March 1960 presidential election and won by a landslide.
A new parliamentary election was held on 29 July 1960. The Democratic Party, which had been in the opposition during the First Republic, easily gained power and the Second Republic was established. The revised constitution dictated the Second Republic to take the form of a parliamentary cabinet system where the President took only a nominal role. This was the first and the only instance South Korea turned to a parliamentary cabinet system instead of a presidential system
In May 1961, the Supreme Council for National Reconstruction overthrew the Second Republic of Korea in the May 16 coup, led by Major General Park Chung-hee, in response to its inability to prevent political instability after the overthrow of the First Republic of Korea under President Syngman Rhee in the April Revolution.
Park became presidential candidate of the new Democratic Republican Party (DRP), which consisted of mainly KCIA officials, ran for president and won the election of 1963 by a narrow margin
The Fourth Republic began with the adoption of the Yushin Constitution on 21 November 1972. This new constitution gave Park effective control over the parliament and the possibility of permanent presidency. The president would be elected through indirect election by an elected body, and the term of presidency was extended to six years with no restrictions on reappointment.
Park’s administration promulgated emergency decrees in 1974 and 1975, which led to the jailing of hundreds of dissidents. The protests grew larger and stronger, with politicians, intellectuals, religious leaders, laborers and farmers all joining in the movement for democracy. In 1978, Park was elected to another term by indirect election, which was met with more demonstrations and protests. The government retaliated by removing the opposition leader Kim Young-sam from the assembly and suppressing the activists with violent means. In 1979, mass anti-government demonstrations occurred nationwide, in the midst of this political turmoil, Park Chung-hee was assassinated by the director of the KCIA, Kim Jae-gyu, thus bringing the 18-year rule of military regime to an end
Chun Doo-hwan declared martial law on 17 May 1980, and protests escalated. Political opponents Kim Dae-jung and Kim Jong-pil were arrested, and Kim Young-sam was confined to house arrest.

Roh Tae-woo became president for the 13th presidential term in the first direct presidential election in 16 years.

Jeff

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Thanks for the history lesson!

So the USA ended up with the USA and with half of Korea (which eventually became a successful capitalist state) as an ally. And China ended up with … China. What they had before anyway. (they also ended up with a vassal state that has required endless assistance and still does)

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How much of a bet that every nuke NK has is pointed at China waiting for the day a Chinese dictator wants some land from NK? Verses in reality none of them are pointed at all at the US.

Oh well another example of a Chinese win.

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No not at all. They ended up forced to keep Mao. The dead bodies of Chinese people killed by Chinese people mounting up.

China would have kept China minus Mao if we had won. We were not going to colonize China.

Till this day the Chinese people do not have China. They now have the little man Xi. There is Xi and nothing else in China. A big let down from China possibly having China.

Again with the powerful leader is not an intelligent leader nor actually a leader but sheer power. Life is worth far less in China because of Xi. If the Chinese can be said to have China it is a diminished state of being.

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Well, a few details:

  1. Mao was, by far, the most popular man in a country with a quarter of the world’s population. That said, as a revolutionary who had just fought for a decade, first against the Chinese government, then against the Japanese and finally against the Chinese government to take power, he had quite a few perceived or real enemies. While the numbers killed by Mao are large on an absolute basis, compared to China’s population they were not extraordinary.

  2. No, the US would be unlikely to colonize China, but based on our actions in other Asian countries, we would try to impose our control over whatever puppet government we put in Control of mainland China.

  3. Your rhetoric about Xi is disingenuous. You seem to feel that he is somehow less capable than his predecessors. China successfully avoided the financial meltdown of a decade ago by pouring their resources into building unneeded structures. They also have significantly beefed up their military and structured the New Silk Road philosophy.

China is not a Western nation and there is no reason to assume that a democratic government would have been able to accomplish what they have over the last generation. I can’t imagine a country with the political chaos of the US being able to have accomplished what China has during the same time frame. Is it Xi (as opposed to the string of leaders of the PRC) which specifically upsets you, or is it the current Chinese implementation of Communism (or Capitalism, if you prefer) which upsets you most? And, would you think that if the government of Taiwan was put into control of mainland China things would improve? If not, who would you put in charge and under what pretext would you feel comfortable that it would be an improvement over what is currently in place?

Jeff

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Jeff that is completely false. China’s financial system was not open to the securitized debt. It had nothing to do with avoiding a meltdown. It had to do with being immaturely led as a nation.

Jeff that is entirely false. The Japanese and later the S Koreans of their own will have become democratic nations. Not in any regard are they puppets.

Jeff so if you have a family of twelve and the dad kills two of the kids that somehow adds up? You are doing the strongman aint so bad dance as always. It is not even remotely close to reality.

The US has done it twice. First into the depression of the 1880s - 1890s. Then coming out of the depression of the 1930s - 1940s. The second time with demand side economics we went much further than China could ever have imagined.

Your mistaken assumption is that democracy is inferior.

The reality is the New Deal was great for creating quicker result but very bad by making ridge policies against what needed to be a free market for interest rates. The longer term resultant was inflation in the 1970s and a devaluing of the dollar. The power FDR wielded was problematic later.

Xi was handed a peg to the dollar to achieve anything at all. It was Deng Xiaoping that actually created China’s achievements. Xi’s two failures were in not depegging the RMB and in not keeping his hands off the PBoC. He is an overgrown clutz. You will never agree to that because power speaks to you as always right.

The reality is China is not going to be growing her economy any further. The water is not there to grow.

The next reality is complete mismanagement because the economic control is centralized.

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While probably surpassed by Stalin on a percentage basis, Mao’s policies were responsible for the death of about 10% of the population. I suppose we could call that ‘semi-extraordinary’.

DB2

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Throw in the Cultural Revolution as a reaction and you have a minor disturbance in the force.

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