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Lockheed Martin and the Military-Industrial Complex

Thursday, January 06, 2011

January 17th marks the 50th anniversary of President Dwight Eisenhower’s famous speech on the military-industrial complex. William Hartung, director of the New America Foundation’s Arms and Security Initiative, discusses the history of Lockheed Martin—the nation's largest weapons contractor. His book Prophets of War traces the company's rise from military aircraft manufacturer in WWI, to a major supplier of fighters and bombers for the Allies in WWII, to corporate behemoth with a major role in setting American foreign policy.

Guests:

William Hartung

Comments [7]

Peter Talbot from Harrison, NJ

Leonard:

You let Mr. Hartung off very easily today.

Too bad.

The real money here is in the ancillary sales of the technology, and in the missiles and upgrades to the technology when purchased. When LM sells a system to the USA, they design it so that splinters of the system can be sold to Taiwan, Israel and others at enormous profit. A massive amount of the work our "State Dept" diplomats do around the world is pushing host governments to buy these systems by fair means or foul, whether they need them or not.

In Taiwan and elsewhere the USA looks like an insane ogre pushing helicopter and aircraft systems on the local government as a precondition for further aid and "good will" in the USA, fueling speculation (quite justified) that the USA is controlled by the DOD and the CIA.

How can you blame them? LM should be shut down. The DOD should have its budget cut immediately by 50% and we should give our soldiers each $50,000 to start a new life when they come home: saving the Country $150,000 per soldier and the country a world of hurt and bad international press.

Actual cost to US security? Zero.

Guns are the worst exports to focus on: they will always be used somewhere.

Jan. 06 2011 06:02 PM
jgarbuz from Queens

To jeremy

The way it works is called "cost plus," meaning that the government guarantees the cost of R&D and production, plus 10% profit. Otherwise, companies won't even try to develop expensive systems on the hope the gov't will buy it. Those days are long gone. Things are way too expensive now. But 10% is not a good profit, so the way they make money is by then selling testing systems. Every system needs maintenance and periodic testing and recalibration. It's on those system that the companies rack up. Just like when you buy a car. A stripped own basic model doesn't represent much profit to the dealer. It's all the accessories or "bells and whistles" on which they rack up.
And there are other things I won't get into.

Jan. 06 2011 12:49 PM
Jeremy from Harlem

I don't understand a bidding process that permits the company to charge the government for cost overruns. If the company is bidding, or pledging, to provide x number of aircraft (missiles, guns, etcetera) for y dollars, why is it the government's responsibility to pay for the cost overrun? Why isn't the company responsible for their own fiscal mismanagement?

Jan. 06 2011 12:37 PM
Leigh from Connecticut

While aircraft becomes a smaller portion of the US defense strategy we cannot deny the importance of unmanned drones as well as the extensive international community that continues to purchase aircraft from Lockheed.

Jan. 06 2011 12:25 PM
michael from manhattan

I saw an interview with the daughter of Eisenhower: she said that the original draft of that speech referred to it as the military industrial congressional complex, which presages the era when the military industrial complex would have manufacturing centers in all 435 congressional districts.

Jan. 06 2011 12:18 PM
jgarbuz from Queens

Many military companies based on obviously obsolescent technologies do seek to go into very different businesses as quickly as they can find something actually viable. This is not unique to Lockheed. The military aircraft industry is going the way of other obsolescent technologies, like electronic tubes and old CRT tv tube screens.

Jan. 06 2011 12:13 PM
jgarbuz from Queens

Fighter bombers, like pre-WWII battleships, are a thing of the past. Just good for target practice. The reality is that smarter and more accurate missiles, as well as UAVs and UCAVs, submarines and ABMs represent the future of warfare, if warfare remains in our future. The US is just trying to preserve jobs in a dying industry, the bomber aircraft industry. But it won't help. The 21st century belongs to the missile and the UCAV, just as the 20th century belonged to the plane and the aircraft carrier. Continued investment in the latter is just throwing good money up in the air, and into the ocean.

Jan. 06 2011 12:01 PM

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