Persistent shortages of parts and personnel will continue “to dog” the Pentagon’s top four defense contractors over the next two years as they currently deal with orders related to Washington’s ongoing security aid to Kiev amid Russia’s ongoing special military operation in Ukraine, a UK media outlet has reported, citing the companies’ chief executive officers (CEOs).
Boeing, Lockheed Martin, Northrop Grumman and Raytheon Technologies have been grappling with “snarled supplies” since the beginning of the COVID-19 pandemic in 2020, something that is currently being worsened by “widespread cost inflation.”
The factors are expected to slow down production rates, damage revenues and prompt “outright losses” within the defense contractors.
Kathy Warden, chief executive of Northrop Grumman, which makes the B-2 stealth bomber among other weaponry, warned that in 2023, her company will go ahead with tackling current problems pertaining to supply chain delays.
“I don’t expect them to get significantly better,” she pointed out, adding that such delays had been in place over the past few years, which she said is longer than the company suggested.
Raytheon CEO Greg Hayes for his part noted that of his company’s 13,000 suppliers, about 400 “are a problem for us.”
“We’re fully prepared that next year is going to be kind of a hand to mouth on the supply chain,” he underlined. According to him, microelectronics and rocket motors remain Raytheon’s “scarcest parts,” and the company “literally” doesn’t “see a recovery path” in this regard until the first half of 2024.
Lockheed Martin’s chief operating officer Frank St John in turn admitted that the company’s lead times are now running “at two to three times their pre-coronavirus pandemic duration.” He added that Lockheed “had to push back its timeline for sales growth to 2024 as it now expects revenue in 2023 to be roughly the same as this year.”
Parts and labor shortages also rode roughshod Boeing’s defense business, with the company reporting $2.8 billion in losses in the third quarter.
Boeing chief executive Dave Calhoun said that in a “supply-constrained world,” his company doesn’t “push the system too fast,” adding, “we slow down when we have to and we try not to compound problems.”
Americans at Odds Over Ukraine Funding
The remarks come against the backdrop of the White House’s current security assistance to Ukrainian authorities, an issue that has split Americans, according to a new opinion poll.
The survey conducted by Convention of States Action, along with the Trafalgar Group, revealed that 40.3% of respondents call for sending Ukraine “weapons and money,” while 30.5% support Kiev being provided with “weapons but no money.”
24.9% more believe that Washington should send Kiev “nothing at all.” Additionally, 51.4% of those surveyed said that “considering the US level of commitment to Ukraine, NATO and other European countries are not doing their fair share.”
Commenting on the results of the poll, Mark Meckler, president of the Convention of States Action, said that “Americans want to continue to help Ukraine defeat [Russian President Vladimir] Putin, but when you look at the numbers, less than half of voters think that US assistance should include sending more money to Ukraine.”
“Voters believe the US is shouldering the burden of supporting Ukraine and seem to be questioning why we are sending billions overseas while our own economy slides deeper into recession. Our nation would benefit from hearing President Biden provide a clearly defined mission and role in the US support to Ukraine, and reassurances that this will not just become a never-ending conflict that drains American resources and skyrockets our nation’s debt,” Meckler added.
The remarks came after ex-Pentagon official Wesley Hallman said in an interview with Sputnik that the Pentagon’s drive to supply arms to Kiev is fraught with consequences for the American defense industry.
"I was talking to somebody that works at a company that produces some of those munitions that we're depleting because we're giving a lot of it to Ukraine right now, and I said, 'How long is it going to take you to get your line up and running,' they said it's gonna be about two years," Hallman said.
According to him, "When I interacted with that executive a couple of weeks ago, that guy was telling me it was gonna [sic] take two years, two years until they could get to the rate of production where they could start truly replenishing at the rates needed. That's a long time."
Moscow has repeatedly warned Washington and its allies against their arms supplies to Kiev, which the Kremlin says contributes to further escalating the Ukraine conflict. Russia’s Foreign Minister Sergei Lavrov cautioned that “any weapon, [and] any arms shipment on the Ukrainian territory" would be considered “a legitimate target” by the Russian military.
He also underlined that the US is “not at all neutral in this situation" and that Washington is "a party to the [Ukraine] conflict.”
Russian Defense Minister Sergei Shoigu for his part underlined that the Ukraine conflict had become another pretext for the US and its allies to unleash an economic and information war against Moscow in order to deplete it strategically. “Ukraine has been picked [by the West] as an instrument of a hybrid war against Russia,” Shoigu added, stressing that Western arms supplies to Kiev add to prolonging the conflict and causing more casualties.