US arms makers Lockheed Martin and Raytheon Technologies are facing shortages of parts and labor. This was reported by The Financial Times.
Developers of hypersonic missiles, spacecraft and US fighters complained about the lack of components and labor
Lockheed Martin makes F-35 fighter jets
“We are completely unsatisfied with the performance of our defense business this quarter, we have work to do. The orders were unique, and their execution was not very‘ said Gregory Hayza, chief executive of Raytheon Technologies. According to him, in the second quarter of 2022, due to supply problems, the company’s plants were provided with the necessary components only in 50% of cases, while under normal conditions this figure ranges from 90% to 95%.
In addition, Lockheed Martin and Raytheon are experiencing staff shortages, which were caused by the spread of the omicron coronavirus strain earlier in the year. The Financial Times notes that disrupted supply chains and labor shortages are unlikely to be resolved in 2022.
In a situation where demand for Lockheed Martin and Raytheon products is growing in the global arms market, companies are seeing a decline in sales. So, Raytheon reported that in the second quarter, the profit of its division, which is responsible for the production of missile systems, decreased by 11% compared to the same period in 2021, amounting to $ 3.6 billion. Raytheon also expects the company’s revenue to continue to decline throughout 2022. In turn, Lockheed Martin lost $ 945 million due to falling sales of F-35 fighters.
Meanwhile, companies are predicting sales growth in the long term, as Western governments place more orders for weapons. The United States will continue to purchase Javelin anti-tank missiles, Stinger man-portable air defense systems and Tomahawk cruise missiles, Hayes said. According to the publication, the Polish authorities turned to Raytheon with a request to quickly supply the country with Patriot missile systems. Recall, among other things, Raytheon Technologies is developing a hypersonic anti-missile.
As for Lockheed Martin, there is good demand for its F-35 Lightning fighter: the Pentagon ordered 375 aircraft, the Czech Republic is considering buying 24 fighters.