US defense contractors are riding high these days, buoyed by rising Pentagon spending on the wars in Iraq and Afghanistan as well as the high cost of homeland security in the US-declared war on terror.
The fiscal 2006 defense budget is set to climb to US$441 billion, an increase of US$21 billion over this year. It envisions an additional US$50 billion for the wars in Iraq and Afghanistan.
The US Congress plans to approve US$79 billion for weapons systems procurement and about US$69 billion for military research and development.
Lockheed Martin, Boeing, Northrop Grumman, Raytheon, General Dynamics, Honeywell and United Technologies have all done well in the first half of this year and have a huge backlog of orders. With US President George W. Bush and Congress ready to spend, they can expect robust sales for years to come.
Lockheed Martin, the biggest US defense contractor and top seller of secure computer systems, saw net profit jump 41 percent to US$830 million in the first six months of this year.
Half-year sales rose to US$17.8 billion from US$17.1 billion in the same period last year, despite a drop in deliveries of F-16 fighter jets that cut into warplane sales.
Lockheed, which is also strong on missile defenses, integrated electronic combat systems and military space programs, projects sales for this year of up to US$38 billion and has orders worth another US$73 billion.
Boeing, the second-largest commercial aircraft maker behind Airbus, is also the second-largest US defense contractor. Sales in the first two quarters of the year were up 8 percent to US$27 billion. Earnings dropped 10 percent to US$1.1 billion due to one-time charges related to its commercial aircraft operations, but that didn't dampen the company's outlook.
Boeing's military division posted sales of US$15.3 billion in January-June, an increase of 5 percent. Operating profits rose 16 percent to US$1.7 billion.
Another big prize would be a US government contract for mid-air refueling tankers, where Boeing is competing with the European Aeronautic, Defence and Space Company (EADS).
Boeing also coordinates Future Combat Systems (FCS), an ambitious US$125 billion project aimed at making US soldiers more effective on the battlefield by integrating new weapons and communications systems. Almost all US defense contractors are participating. At the end of June, Boeing had military orders of USS$85.7 billion.
Northrop Grumman, which specializes in warships, warplanes, information technology and space, has US$57.1 billion on its order books. Half-year earnings rose from US$534 million to US$776 million last year on a decline in sales to US$13.4 billion from US$13.4 billion.
Raytheon, best-known for military electronics and weapons systems, saw sales rise 8 percent in the first half of the year to US$10.4 billion.
‘NO SECURITY RISK’: The Railway Bureau reassured the public that the technicians’ activities were limited to technical guidance and did not involve sensitive systems The Railway Bureau yesterday said it had invited eight Chinese technicians to assist with an airport MRT construction project. The bureau issued the confirmation after an Internet user said Chinese nationals had entered the construction zone of Taiwan Taoyuan International Airport’s Terminal 3 project. They asked why “individuals from an enemy state” were allowed access to such a major national infrastructure project, which raised serious concerns over Taiwan’s industrial safety, sensitive systems and information security. The bureau’s Northern Region Engineering Branch Office said subcontractor Taiwan Handle Industrial Co (台灣手把工業) of the Taoyuan airport MRT’s “Contract No. CU05 Project A14 Station Civil, MEP &
A US uncrewed surface vessel (USV) encountered multiple Chinese warships during an autonomous transit of the Taiwan Strait, US defense company Seasats said in a statement on Wednesday. Seasats announced that a Lightfish USV had completed the first autonomous transit of the Taiwan Strait. Over five days, the USV traversed the entire length of the Strait while constantly monitoring surface vessel traffic, the company said. The Lightfish encountered multiple Chinese warships, one of which was a Chinese People’s Liberation Army Navy (PLAN) Type 056 corvette, it said. The Chinese vessels were operating “well within Taiwan’s exclusive economic zone without transmitting their identity via the
Taiwan is still in the process of assessing the possibility of recruiting workers from Eswatini, the Ministry of Foreign Affairs said yesterday, adding that its goal is to help Eswatini upgrade its vocational training centers. If there are plans to recruit workers from Eswatini, safeguarding national security, protecting public health and ensuring the employment rights of Taiwanese would be prerequisites, Department of West Asian and African Affairs Director-General Yen Chia-liang (顏嘉良) told a news conference. Key considerations would also include filling labor shortages in specific industries, and fostering bilateral professional and technical exchanges, he said. Yen was asked about the progress of labor
The nation’s usually punctual high-speed rail system yesterday was hit by major disruptions after all scheduled services were canceled and replaced with three hourly trains offering only non-reserved seating, affecting more than 200,000 passengers. Preliminary findings indicate the disruption was caused by a faulty power module in a track switch control cabinet, Taiwan High-Speed Rail Corp (THSRC) said, adding that as a full system inspection could only be conducted after operations end for the day, a decision on whether normal service would resume today would be announced before the first train departs. During a routine inspection early yesterday, a switch signal abnormality
RSS