Sunday, January 31, 2016

Cheap Oil Will Not Impact Arms Purchases From Oil Producing Nations


Defense News: Cheap Oil Doesn't Dampen Industry's 2016 Outlook

WASHINGTON — Despite plummeting oil prices, international demand for defense products remains strong, including in the oil-rich Middle East, multiple defense executives said during fourth quarter earnings calls last week.

On call after call, analysts pressed management at top defense firms about the impact of low oil prices on their outlook for 2016. The general consensus was that international markets will continue to present an opportunity for organic growth.

Marillyn Hewson, Lockheed Martin’s president, chairman and CEO, said over the next five years, she expects half of F-35 sales to come from the international market.

"We are not seeing a lot of pullback on expenditures on national security” because of oil prices, she said. Lower oil revenues can put pressure on nation’s budgets, “but they are still going to buy the products and capabilities and technologies they need to enable them to protect their citizens and to deal with their security issues.”

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WNU Editor: These defense executives feel very confident that the "boom times" will continue.

4 comments:

Don Bacon said...

The MIC has hood reason to be optimistic, given the US strategy of provoking and attacking all over the world, and then calling the reactions threats to security. But still, their extreme optimism is misplaced. Regarding, F-35, the "international market" has no useful product to procure as the system is still deep in development with many problems. Also the strengthening dollar has made expensive products much more expensive for most countries.

Matthew Dupuis said...

Is stability in any of these cooperation's best interests? How much influence do they have in government? Should we see them as being driven by peace and security or by profit?

As a former prison official, I realized that when a justice system is driven by the profit of private industry it can no longer be trusted... An empty bed is lost revenue for many private and local, state, and federal institutions. As a result they have an incentive to incarcerate anybody for anything if even only for the weekend to show an increase in population and a need for financing. They also unite under a banner promoting the ideas that they are serving the public's best interest...(I'm not talking about the lower staff, but senior executives, administrators, bureaucrats, and politicians)

A stabile world wouldn't need so many of these giant defense corporations. That makes me ask:
Is instability something that can be controlled; and if so, who can really control it? And can they be trusted to be acting in our best interests or theirs?

Don Bacon said...

@md
The US is expert in destabilization and has done so in many countries currently in the news. Then the corporations refer to their rosy prospects, which the financial press pounces on to hype stock prices based on more Pentagon procurement "to protect their citizens and to deal with their security issues.”

"War is a racket. . .the only one in which the profits are reckoned in dollars and the losses in lives."-- MajGen Smedley D. Butler, USMC, double recipient of the Congressional Medal of Honor, 1935

Aizino Smith said...

Kremlin never sold no weapons to no one, ever!