ellers er det meste der som everywhere; med relevans for forsvarsevnen/-støtten.
Why is the US military ceding ground to China? As a new DOD report shows, big defense contractors are middlemen whose main purpose is stock buybacks and dividends.
The DOD tasked three universities with examining how Pentagon contracting works, and did an internal analysis, all to determine the financial health of the defense base. And what they found is not so different than health care, big tech, finance, or any other industry segment; defense is run by a few giant middlemen who do exceptionally well by shareholders, outperforming commercial rivals and the S&P index. Contracting doesn’t look especially profitable, but the relatively lower margins are more than compensated by a host of favorable contracting terms offered by the government.
Of course, like middlemen in other industries, the big guys don’t really produce, they extract. The actual work, 60% to 70% of it, is performed by subcontractors, and these firms have very few rights and get paid when the big guys feel like it. The executives at Lockheed Martin or Raytheon, in other words, act a lot more like financial engineers than actual engineers.
The net effect is the following: “Despite improving profit margins and cash generation for defense contractors in 2010-2019 vs 2000-2009, the share of contractor spending on Independent Research and Development (IR&D) and capital expenditures declined while cash paid to shareholders in dividends and share repurchases increased by 73%.”