{"id":55850,"date":"2015-03-23T12:00:58","date_gmt":"2015-03-23T12:00:58","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=55850"},"modified":"2015-05-05T21:25:55","modified_gmt":"2015-05-05T20:25:55","slug":"big-banks-analyst-worries-that-iran-deal-could-depress-weapons-sales","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2015\/03\/big-banks-analyst-worries-that-iran-deal-could-depress-weapons-sales\/","title":{"rendered":"Big Bank\u2019s Analyst Worries That Iran Deal Could Depress Weapons Sales"},"content":{"rendered":"
\"Photo:<\/a>

Photo: Colin Anderson\/Getty Images<\/p><\/div>\n

20 Mar 2015 – <\/em>Could a deal to normalize Western relations with Iran and set limits on Iran\u2019s development of nuclear technology\u00a0lead to a more peaceful and less-weaponized Middle East?<\/p>\n

That\u2019s what supporters<\/a> of the Iran negotiations certainly hope to achieve. But\u00a0the prospect of stability has at least one financial analyst concerned about its impact on one of the world\u2019s biggest\u00a0defense contractors.<\/p>\n

The possibility of an Iran nuclear deal depressing weapons sales was raised by Myles Walton, an analyst from Germany\u2019s Deutsche Bank,\u00a0during\u00a0a Lockheed earnings call this past January 27th. Walton asked Marillyn Hewson, the chief executive of Lockheed Martin, if an Iran agreement\u00a0could \u201cimpede what you see as progress in foreign military sales.\u201d Financial industry analysts such as Walton use earnings calls\u00a0as an opportunity to ask publicly-traded corporations like Lockheed about issues that might harm profitability.<\/p>\n

Hewson replied that\u00a0\u201cthat really isn\u2019t coming up,\u201d but stressed that \u201cvolatility all around the region\u201d should continue to bring in new business. According to Hewson, \u201cA lot of volatility, a lot of instability, a lot of things that are happening\u201d in both the Middle East and the Asia-Pacific region\u00a0means\u00a0both are \u201cgrowth areas\u201d for Lockheed Martin.<\/p>\n

The Deutsche Bank-Lockheed exchange \u201cunderscores a longstanding truism of the weapons trade: war \u2014 or the threat of war \u2014 is good for the arms business,\u201d says William Hartung, director of the Arms & Security Project at the Center for International Policy. Hartung observed that\u00a0Hewson\u00a0described the normalization of relations with Iran not as a positive development for the future, but as an \u201cimpediment.\u201d \u201cAnd Hewson\u2019s response,\u201d Hartung adds, \u201cwhich in essence is \u2018don\u2019t worry, there\u2019s plenty of instability to go around,\u2019 shows the perverse incentive structure that is at the heart of the international arms market.\u201d<\/p>\n

Rising tensions in the Middle East have prompted governments to go on a shopping spree for American lobbyists<\/a> and weapons<\/a>.\u00a0DefenseOne<\/em> reports<\/a> that over the next five years, \u201cSaudi Arabia, United Arab Emirates, Kuwait, Qatar and Jordan are expected to spend more $165 billion on arms.\u201d\u00a0And in the U.S., concerns over ISIS and Iran have prompted calls<\/a> for an increase in the defense budget.<\/p>\n

During the call, Hewson proudly noted\u00a0that 20% of Lockheed\u2019s sales in 2014 were \u201cinternational\u201d \u2014 meaning, to non-American customers.\u00a0\u201cSo we\u2019re pleased with that,\u201d she said, adding that Lockheed has set a goal\u00a0\u201cto get to 25% over the next few years.\u201d<\/p>\n

Lockheed Martin\u2019s trademarked\u00a0slogan is \u201cWe never forget who we\u2019re working for,\u201d which Lockheed likes to suggest means Americans in general and military veterans in particular<\/a>. The January earnings call indicates that Lockheed in fact answers to very different constituencies.<\/p>\n

_____________________________<\/p>\n

Email the author: lee.fang@theintercept.com<\/a><\/em><\/p>\n

Go to Original \u2013 firslook.org<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Not to worry, replies Lockheed CEO, a deal really isn\u2019t likely to happen anytime soon \u2014 and even if it does, there\u2019s plenty of war to keep profits high.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57],"tags":[],"class_list":["post-55850","post","type-post","status-publish","format-standard","hentry","category-militarism"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/55850","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=55850"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/55850\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=55850"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=55850"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=55850"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}