Canadian Manufacturing

Biden to visit weapons manufacturing plant

The war will mean increased sales for some defense contractors, including Raytheon, which makes the Stinger missiles Ukrainian troops have used to knock out Russian aircraft.

May 3, 2022   by Associated Press

When President Joe Biden on May 3 visits a Lockheed Martin plant that manufactures an antitank weapons system, he’s certain to herald the U.S.-made arms as a game changer for Ukraine’s stiff resistance to Russia’s invasion.

But Biden’s planned visit to the Alabama factory line is also drawing attention to a growing concern as the war drags on: Can the U.S. sustain the cadence in shipping vast amounts of arms to Ukraine while maintaining a healthy stockpile it may need if conflict erupts with North Korea, Iran or elsewhere?

The U.S. has provided at least 7,000 Javelins, including some transferred during the Trump administration, or about one-third of its stockpile, to Ukraine in recent years, according to an analysis by Mark Cancian, a senior adviser with the Center for Strategic and International Studies international security program. The Biden administration says it has committed to sending 5,500 Javelins to Ukraine since the Feb. 24 invasion.

Analysts also estimate that the United States has sent about one-quarter of its stockpile of shoulder-fired Stinger missiles to Ukraine. Raytheon Technologies CEO Greg Hayes told investors last week during a quarterly call that his company, which makes the weapons system, wouldn’t be able to ramp up production until next year, due to parts shortages.

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“Could this be a problem? The short answer is, ‘Probably, yes,'” said Cancian, a retired Marine colonel and former Office of Management and Budget specialist on Pentagon budget strategy, war funding and procurement programs.

He added that Stingers and Javelins were where “we’re seeing the most significant inventory issues” and that production of both weapons systems has been limited in recent years.

The Russian invasion offers the U.S. and European defense industry a big opportunity to bolster profits as lawmakers from Washington to Warsaw are primed to increase defense spending in response to Russian aggression. Defense contractors, however, face the same supply chain and labor shortage challenges that other manufacturers are facing, along with some others that are specific to the industry.

Military spending by the U.S. and around the world was rising even before Russia’s Feb. 24 invasion. Biden’s proposed 2023 budget sought $773 billion for the Pentagon, an annual increase of about 4%.

Globally, total military spending rose 0.7% to more than $2 trillion for the first time in 2021, according to an April report from the Stockholm International Peace Research Institute.

The war will mean increased sales for some defense contractors, including Raytheon, which makes the Stinger missiles Ukrainian troops have used to knock out Russian aircraft. The company is also part of a joint venture with Lockheed Martin that makes the Javelins.

Biden will visit Lockheed Martin’s facility in Troy, Alabama, which has the capacity to manufacture about 2,100 Javelins per year. The trip comes as he presses Congress to quickly approve his request for an additional $33 billion in security and economic assistance for Kyiv. Senate Majority Leader Chuck Schumer, D-N.Y., said on May 2 that he hoped quick bipartisan agreement on the security package could be reached so the Senate could begin considering it “as early as next week.”