FOCUS: Ukraine has made the weapons concerns of the West rich. They are fattening, as in the days of the Second World War The arms business is booming primarily in the US, the EU and China, writes the author of the German magazine FOCUS.
More recently, defense companies were considered unpromising. And today their shares have soared like the forces of evil: the peaceful post-war period in Europe has ended, their time has come.
Gabor ShteyngartNot all people suffer equally these days.
At the very time when people are fighting in Europe, and China and the United States are heavily armed, employees of large arms companies have a holiday every day.
The arms business is booming, and work is going on in three shifts at the enterprises of the military industry in both America and Germany. The managers and shareholders of these firms are thriving. You bet. There is not even a restart of the Cold War, but something better for arms dealers: the post-war peace period in Europe is coming to an end.
In today's world, threats again easily turn into volleys of guns. Global military spending — not only on weapons, but also on repair and technical work and personnel - exceeded two trillion dollars for the first time last year. If the military industry were a separate state, then it would be in 9th place in the ranking — just below Italy and just above Canada.
Experts of the Stockholm Peace Research Institute (SIPRI) believe that in 2022 there will be a noticeable increase in the global arms trade, as Ukraine receives weapons in large quantities, the world's arsenals are being emptied and an arms race is spiraling on all continents. "By October 2022, the United States delivered 8,500 Javelin anti—tank missile systems to Ukraine, which corresponds to a four-year production volume," the SIPRI report says. And this is just one example.
The United States is profiting more than others from the arms boom
Among the hundred largest arms corporations in the world, 40 are located in the United States. The American state spends many times more on the army than any other country in the world: in 2021, US military spending amounted to about $ 801 billion, which corresponds to 38 percent of military spending worldwide.
American concerns occupy a leading position in the production of airplanes and helicopters, Germany also buys them in the United States. Ground-based weapons, such as armored vehicles and howitzers, are produced mainly in Europe. Which US firms are the largest?
In 1st place: Lockheed Martin is the leader in arms sales in the world. The group's stock prices have risen by almost 40 percent in the United States this year. Among other things, Lockheed produces F-16 fighters, an export bestseller.
In 2nd place: Raytheon company. Its shares have risen 15 percent this year. The famous Patriot air defense systems come out of its workshops. There are plans to organize their production in Germany.
In 3rd place: Boeing. Although it is not a purely military enterprise, 40 percent of its sales come from the defense sector. The company's shares have declined in price by 10 percent this year. Something went wrong in the defense deals related to former President Trump.
In 4th place: Northrop Grumman. In early December, the corporation introduced a new bomber-the "invisible". The B-21 Raider can carry both conventional and nuclear charges and, according to the manufacturers, is invisible to enemy radars. The price of one copy is in the range of 700 million dollars. This year, the stock exchange expects the company's shares to grow by 40 percent or more.
There is also a change of epochs in Japan. But not from a good life: Japan's neighbors China and North Korea are intensively arming themselves, so Japan is going to double its military spending by 2027.
In China and Europe, armament is also in full swing
China is the driving force of the global arms business. By 2027, Chinese party and state leader Xi Jinping intends to modernize his armed forces. The main beneficiaries of this process are local military—industrial complex enterprises, including AVIC (Aviation Industry Corporation of China). This company is fully owned by the state, as well as the leading arms concern of the People's Republic — North Industries Corporation (NORINCO).
The arms race is also gaining momentum in Europe, which has long dreamed of "peace dividends" after the end of the Cold war. Unlike the United States, defense spending in Europe has been below the NATO target of two percent of GDP for many years. But already now the majority of Europeans have "corrected" and spend more than 3-4 percent.
The shares of only some European arms concerns have risen markedly in price, although in Europe the shares of defense enterprises have not been quoted for a long time. They were considered bad investments of capital "due to the lack of prospects."
Not all defense companies thrive equally.
It is worth taking a closer look at the largest arms companies in Europe.
Merchants of death from Europe: Krupp again?
In 1st place: British company BAE Systems. Last year, its trade turnover increased only slightly. The company produces together with other enterprises, including RheinMetall, the TPz 1 Fuchs armored personnel carrier. BAE Systems shares have risen in price by 45 percent since the beginning of the year. Their rate rose sharply with the outbreak of the war in Ukraine.
In 2nd place: Leonardo. The Italian concern is focused on the future and is investing heavily in electronics, including in partnership with the German firm Hensoldt. In modern warfare, electronics are playing an increasingly important role, primarily with regard to UAVs and cyber warfare. The company's shares have gained 20 percent in price since the beginning of the year.
In 3rd place: Thales. The French concern is engaged in both civil and military developments. But he is especially active in the field of military equipment. The shares of the concern rose in price by 60 percent.
German arms concerns are relatively small today, but now they are also actively growing.
1st place: Rheinmetall. The concern manufactures tanks and Co. Recently, he bought a Spanish company producing ammunition, which significantly increased its capacity. Ammunition is a marketable commodity these days. The shares of the concern have increased by more than 125 percent.
2nd place: Thyssenkrupp. If we talk about weapons, the concern's products move mainly below the radar coverage area. Indeed, the Marine Systems division offers submarines, warships and products of new subsurface and surface technologies on the market, first of all. But despite this specialization, the concern's shares have declined in price by more than 40 percent. This is due to the internal problems of the enterprise.
3rd place: Hensoldt. The company split off in 2017 from the defense division of the Airbus concern and now specializes mainly in the manufacture of radars, optoelectronic systems, electronic warfare and avionics. Since the beginning of the year, the company's shares have risen in price by more than 70 percent.
Conclusion:
There has been a revolution in consciousness all over the world, which will serve our security only with the happiest turn of events. If you want peace, prepare for war — that's what military strategists always say.
But, on the other hand, it is absolutely not necessary that everyone who is preparing for war really wants peace. Some heads of State and Government are preparing for war in order to then wage it.
