January 27, 2021 | International, Land
GLOBAL BUSINESS EDITOR
JANUARY 26, 2021 02:51 PM ET
Raytheon Technologies executives told investors Tuesday that it expects the Biden administration to block at least one arms deal to a Middle Eastern ally as the U.S. shifts its weapons export policy.
Raytheon CEO Greg Hayes, speaking on the company's quarterly earnings call, said Raytheon has removed from its books a $519 million projected sale of an “offensive weapon system” to a “customer in the Middle East...we can't talk about.”
On the same call, CFO Toby O'Brien said the sale involves an “offensive munition.”
The scale of the deal indicates that the execs were referring to the planned sale of some 7,500 Paveway bombs to Saudi Arabia. Last April, Raytheon said in a regulatory filing that its arms sales could be hurt by lawmakers' concerns about Riyadh's role in Yemen's civil war and about the Saudi crown prince's involvement in the murder of a U.S.-based Saudi journalist. Still, in December, Bloomberg reported that the Trump administration was moving ahead with the sale.
“We had assumed that we were going to get a license to provide these offensive weapon systems to our customer,” Hayes said. “With the change in administration, it becomes less likely that we're going to be able to get a license for this. And so we appropriately decided that we could no longer support the booking of that contract.”
During his Senate confirmation hearing last week, now-confirmed Secretary of State Anthony Blinken said the Biden administration would “end our support for the military campaign led by Saudi Arabia in Yemen.”
Still, Hayes said the company does not anticipate issues selling defensive weapons, like Patriot missile interceptors, and other types of arms in the region.
“Look...peace is not going to break out in the Middle East anytime soon,” Hayes said. “I think it remains an area where we'll continue to see solid growth.”
Similarly, Lockheed Martin CEO Jim Taiclet expected foreign arms sales to remain a priority in the Biden administration.
“As far as international business, including foreign military sales, the tendency of the people in the Biden administration [and] in the president's own statements, reiterate his view that alliances are important that they need to be cultivated, and that they have real value in deterrence and national defense,” Taiclet said. “I do think that we'll have a more open environment for [foreign military sales] and direct commercial sales to our international partners.”
Taiclet said foreign weapon sales are a way to generate American jobs and stimulate the U.S. economy.
“If jobs and the economy are important, the promotion of international defense sales, one would surmise, would also be important,” Taiclet said Tuesday morning on Lockheed's quarterly earnings call.
While arms sales create jobs growth, a 2019 Center for International Policy report said those claims, particularly during the Trump administration, were greatly exaggerated.
Still Taiclet, a former U.S. Air Force pilot, said arms sales are a way to deepen relationships with an ally.
“I can tell you that there's no better way to get a tighter bond with an ally than sell them jet fighter aircraft,” he said. “All the way back in the mid-[19]80s, when I was in pilot training, we had Saudis in our class, for example.”
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November 12, 2021 | International, Aerospace
July 25, 2019 | International, Other Defence
By: Aaron Mehta WASHINGTON – Newly installed U.S. Secretary of Defense Mark Esper says he is happy with the two-year budget deal's recommendation for the Pentagon, despite it being $12 billion less than what the White House requested for fiscal 2020. Speaking to press just hours after taking office, Esper also said he is focused on filling empty spots at the Pentagon as quickly as possible to “make sure we have that civilian control of the military” firmly in place. The Trump administration's request for defense in FY20 was $750 billion, a number Democrats in Congress tried to reduce to $733 billion. The nearly $1.4 trillion spending plan announced Monday — which would prevent a government shutdown this fall and do away with the final two years of budget caps known as sequestration — includes about $738 billion in military funding for FY20. That's a 3 percent increase from current-year levels, which seems fine with the man now running America's military. “$738 [billion] is a good number. We also have two years. We expect to see two years' worth of numbers. To the degree we have predictability, to the degree we can avoid [continuing resolutions], those things allow us to plan and make more efficient use of our dollars,” Esper said. “So I'm good with those dollars. No complaints.” Esper is the first confirmed defense secretary since Jim Mattis resigned at the end of last year. But a number of spots — including 14 of 59 political spots, and four of the top six roles in the department — are still filled by acting individuals, something Esper highlighted as an issue he's hoping to quickly address. “My perspective was from a service secretary and I think it's always challenging — people in acting jobs, when you don't feel the full confidence in the role, sometimes folks tend to maybe not behave as confidently because you're unsure and you also don't want to bind the person-who-may-actually-be-confirmed's hands,” he said, adding he does not think the open spots impacted operations. “We need to get staffed up quickly,” he said. “We have to get stable leadership.” One of those empty spots is Army secretary, now vacant with Esper's promotion. Ryan McCarthy, the service undersecretary, has been nominated to fill the full role. Asked about advice for his successor, Esper joked that he hopes McCarthy won't “break anything,” before saying he expects McCarthy's nomination to arrive at the Senate in a “matter of days.” “His paperwork is at the White House, and everybody we put forth needs to be thoroughly vetted. So I think he should soon be coming out of the process,” Esper said. “The question is if it will be soon enough for the Senate Armed Services Committee to do its due diligence in a timely matter.” The secretary has also asked for new guidance to be issued to the field to inform service members on the “very important role of media and press” in society. https://www.defensenews.com/pentagon/2019/07/24/newly-installed-secdef-the-budget-deal-provides-a-good-number-for-defense/