Arms Industry: Trumped Up Jobs Claims, Pumped Up Profits

When the arms industry starts crying poverty, hold onto your wallet. The 2000s have been a great time to be a weapons maker, but you wouldn't know it from reading the industry's latest PR pieces. Major players like Lockheed Martin, Raytheon and General Dynamics have seen their government contracts double - or even triple - as Pentagon budgets have soared to their highest levels since World War II. Arms manufacturers are fat and happy, and they want to keep it that way.

The latest profit figures suggest that the defense industry is doing just fine at the moment, as Spencer Ackerman has noted in an excellent essay on Wired magazine's "Danger Room" blog. Third quarter profits for the largest weapons contractors have grown substantially, including a 31% jump for Boeing (20% in its defense, space and security sector) and a healthy increase for Lockheed Martin. And CEO's of the top weapons makers aren't exactly tightening their belts. Robert Stevens of Lockheed Martin pulls down over $21 million a year in salary.

This is the context for the arms lobby's alarmist rhetoric about the economic impacts of scaling back the Pentagon's ambitious spending plans. The Aerospace Industries Association (AIA) has issued a brief report suggesting that if automatic cuts triggered by a failure of the budget super committee kick in, up to one million jobs could be lost. Cutting any form of spending will displace the workers most closely involved in providing the good or service in question. But as might be expected from one of the nation's largest and most entrenched special interest groups, the AIA study vastly overstates the number of workers who would be displaced by defense cuts. It also ignores the fact that using the money for almost anything else - including a tax cut - would create more jobs. In a political environment in which keeping Pentagon spending at high levels means cutting other programs, the result could be a net loss of jobs nationwide. In the zero sum game of deficit reduction, military spending could be a job killer, not a job creator.

It should also be noted that even under the arms industry's worst case scenario -- $1 trillion in cuts over 10 years - military expenditures would only go back to 2007 levels. And 2007 was a very good year for defense contractors.

The real impetus for the arms maker's scare campaign is that they want to continue to be supported in the style to which they have become accustomed - record spending, high profits, and exorbitant executive compensation. Sure they'd like it, but we can't afford to provide it any more. The big contractors will have to adjust to an environment in which they don't get everything they want when they want it, but they will still be receiving billions of dollars of our tax money.

The fact that the defense industry may have trouble living on a military budget that would still be well over the Cold War average has more to do with mismanagement by the Pentagon and the contractors than it does with a lack of funding. When a system like the F-35 combat aircraft doubles in price before it is even in full production, throwing more money at the contractors is not the answer. Or take the case of the F-22, the most expensive fighter plane ever built. Despite the fact that the United States has been involved in three wars during this decade, the F-22 has never been used in combat. And it spent a good part of this year grounded due to problems with the system that gets oxygen to the pilot.

The ultimate form of mismanagement involves a failure to set priorities. The Pentagon needs to pare back its missions to those that are essential for defending the country. Among other things, that means reducing our excessive and dangerous nuclear arsenal and forgoing needless expenditures on items like new nuclear bombers and ballistic missile launching submarines; and acknowledging that we are extremely unlikely to fight more wars of occupation or large-scale counterinsurgencies like the ones in Iraq and Afghanistan.

The bottom line is that the Pentagon and the arms industry don't need more money. They need more discipline in how they spend our money. Reducing military spending can help make that happen.

William D. Hartung is the director of the Arms and Security Project at the Center for International Policy and the author of Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex.