[Eauz]

Link

Could a deal to normalize Western relations with Iran and set limits on Iran’s development of nuclear technology lead to a more peaceful and less-weaponized Middle East?

That’s what supporters of the Iran negotiations certainly hope to achieve. But the prospect of stability has at least one financial analyst concerned about its impact on one of the world’s biggest defense contractors.

The possibility of an Iran nuclear deal depressing weapons sales was raised by Myles Walton, an analyst from Germany’s Deutsche Bank, during a Lockheed earnings call this past January 27. Walton asked Marillyn Hewson, the chief executive of Lockheed Martin, if an Iran agreement could “impede what you see as progress in foreign military sales.” Financial industry analysts such as Walton use earnings calls as an opportunity to ask publicly-traded corporations like Lockheed about issues that might harm profitability.

Hewson replied that “that really isn’t coming up,” but stressed that “volatility all around the region” should continue to bring in new business. According to Hewson, “A lot of volatility, a lot of instability, a lot of things that are happening” in both the Middle East and the Asia-Pacific region means both are “growth areas” for Lockheed Martin.

The Deutsche Bank-Lockheed exchange “underscores a longstanding truism of the weapons trade: war — or the threat of war — is good for the arms business,” says William Hartung, director of the Arms & Security Project at the Center for International Policy. Hartung observed that Hewson described the normalization of relations with Iran not as a positive development for the future, but as an “impediment.” “And Hewson’s response,” Hartung adds, “which in essence is ‘don’t worry, there’s plenty of instability to go around,’ shows the perverse incentive structure that is at the heart of the international arms market.”

Rising tensions in the Middle East have prompted governments to go on a shopping spree for American lobbyists and weapons. DefenseOne reports that over the next five years, “Saudi Arabia, United Arab Emirates, Kuwait, Qatar and Jordan are expected to spend” more than $165 billion on arms. And in the U.S., concerns over ISIS and Iran have prompted calls for an increase in the defense budget.

During the call, Hewson proudly noted that 20 percent of Lockheed’s sales in 2014 were “international” — meaning, to non-American customers. “So we’re pleased with that,” she said, adding that Lockheed has set a goal “to get to 25 percent over the next few years.”

Lockheed Martin’s trademarked slogan is “We never forget who we’re working for,” which Lockheed likes to suggest means Americans in general and military veterans in particular. The January earnings call indicates that Lockheed in fact answers to very different constituencies.

Nothing new here, but rather than actually promote productive, useful trade and economic policies between Iran and the West, we'd prefer to support an industry based upon destruction and terror. Oh well, as long as the company is doing well and earning profits, let's not worry about the fact that they are contributing to the problems in the region.

[Rei Murasame]

The Russian Federation and Iraq is enough to be going on with already. They have thought logically about this. If there is a war with Iran then everyone loses everything.

I'm not sure that First Look are quoting these people in the correct context. The quotes themselves don't match the headline they've attached to it. No one in that article has actually spoken against the Iran deal as far as I can see. They spoke generally about how volatility is good for business, and the writers of the article incorrectly assumed that this meant Iran itself.

Marillyn Hewson literally said "that [issue of the Iran deal] really isn't coming up" and that "volatility around the region" will continue to drive sales up. And then somehow the newspaper still managed to build an Iran article out of that. How on earth is that even possible? They drew an editorialised conclusion that was completely different from what Hewson actually said.

[UnusuallyUsual]

The Russian Federation and Iraq is enough to be going on with already. They have thought logically about this. If there is a war with Iran then everyone loses everything.

I'm not sure that First Look are quoting these people in the correct context. The quotes themselves don't match the headline they've attached to it. No one in that article has actually spoken against the Iran deal as far as I can see. They spoke generally about how volatility is good for business, and the writers of the article incorrectly assumed that this meant Iran itself.

Marillyn Hewson literally said "that [issue of the Iran deal] really isn't coming up" and that "volatility around the region" will continue to drive sales up. And then somehow the newspaper still managed to build an Iran article out of that. How on earth is that even possible? They drew an editorialised conclusion that was completely different from what Hewson actually said.

I somewhat agree with you that this article twists the content bizarrely. But I think you (unsurprisingly) miss the real point of the article, which is just to expose the ways in which modern corporations worship violence and seek to promote it apparently.

[Eauz]

Rei, the article has two paragraphs discussing the potential impact that an agreement with Iran would have upon foreign military sales.

The possibility of an Iran nuclear deal depressing weapons sales was raised by Myles Walton, an analyst from Germany’s Deutsche Bank, during a Lockheed earnings call this past January 27. Walton asked Marillyn Hewson, the chief executive of Lockheed Martin, if an Iran agreement could “impede what you see as progress in foreign military sales.” Financial industry analysts such as Walton use earnings calls as an opportunity to ask publicly-traded corporations like Lockheed about issues that might harm profitability.

Hewson replied that “that really isn’t coming up,” but stressed that “volatility all around the region” should continue to bring in new business. According to Hewson, “A lot of volatility, a lot of instability, a lot of things that are happening” in both the Middle East and the Asia-Pacific region means both are “growth areas” for Lockheed Martin.

Then it pretty much goes on to discuss the other opportunities for growth in the region, without Iran. It pretty much tells us that the Middle Eastern governments have pretty much lapped up all the sales pitches from American businesses, due to IS. They are expecting 25% international sales in the next few years. So, the call was about asking Hewson about Iran and she reassured them that even if there is an agreement, everything should be good and they should still meet their earning goals.

[Rei Murasame]

I somewhat agree with you that this article twists the content bizarrely. But I think you (unsurprisingly) miss the real point of the article, which is just to expose the ways in which modern corporations worship violence and seek to promote it apparently.

Well, you mean to say that defence companies do that. However, the relationship between defence companies and their supply chain, and the state, is complex, but in the end it still comes down to the fact that there would be no need to sell weapons if states didn't want to buy weapons.

It pretty much tells us that the Middle Eastern governments have pretty much lapped up all the sales pitches from American businesses, due to IS.

This I agree on.

They are expecting 25% international sales in the next few years. So, the call was about asking Hewson about Iran and she reassured them that even if there is an agreement, everything should be good and they should still meet their earning goals.

I also agree that this is true. I'm just saying that they way the article was presented makes it look like they were actually hoping to mess up the Iran deal, rather than them simply asking a question and getting an answer.

All they did was ask, and it ended up being portrayed as though they were plotting something.

[Typhoon]

If there is any impact on arms sales as a result of the Iran settlement I would only expect this to be temporary and may actually induce additional arms spending.

Firstly now Iran is free of sanctions it will be free to go on its own arms spree, similar to what other nations have done around the region recently but which is desperately needed to reinvigorate its military assets. Packages similar to Algeria, Egypt and Iraq can be expecting with something like $5-10 billion spent on arms over the next 5 years. As the capability of the Iranian military improves, nations opposed to Iran can be expected to take measures to counter the Iran build-up. The broader Sunni-Shia conflict is also a Sunni-Shia arms race.

For Isreal (deeply opposed to normalized relations with Iran) I think the negotiation outcome has already resulted in further spending with the signing for an addition 14 F-35 with 17 options, taking the F-35 fleet to between 33-50 aircraft.