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Trump presidency – particularly good for the nuclear weapons makers

Trump Goes Nuclear, But This Time Lockheed, Northrop, Raytheon Rise http://www.investors.com/news/trump-tweets-about-nukes-after-blasting-pentagon-spending/  President-elect Donald Trump tweeted about the importance of the U.S. nuclear arsenal, which will cost hundreds of billions of dollars to recapitalize, potentially giving defense giants like Lockheed Martin (LMT), Northrop Grumman (NOC), Raytheon (RTN) and Boeing (BA) some hope that he won’t cost-shame them on that piece of the Pentagon budget America’s nuclear triad of air-, land- and sea-based delivery systems is nearing the end of its life span and needs to be replaced. But that won’t come cheaply.

trump-puppet-of-weapons-makers

Over the summer, the Air Force released its requests for proposals for intercontinental ballistic missiles to replace Boeing’s aging Minuteman system. The Ground-Based Strategic Deterrent’s estimated cost is $62 billion over 30 years, but a report from the Pentagon’s office of independent cost assessment said the Air Force’s estimate is too low by “billions of dollars,” sources told Bloomberg.

The Air Force is also seeking Long-Range Standoff nuclear cruise missiles to replace Boeing AGM-86B Air-Launched Cruise Missiles. That program’s cost has been estimated at $20 billion-$30 billion.

Boeing, Raytheon, Northrop and Lockheed are expected to bid on the two contracts, and initial contracts could be awarded next year.

Last year, Northrop was awarded a contract to build the B-21 bomber that replaces the Cold War-era Boeing B-52s. The Air Force has put the development-phase cost for the B-21 at $23.5 billion, but analysts have estimated the total acquisition cost at up to $80 billion. The Navy’s program to replace its Ohio-class submarines, which can launch nuclear missiles, will cost the service $100 billion.

Shares of defense contractors reversed higher after early, narrow losses. Lockheed shares edged up 0.1% on the stock market today, Northrop added 0.3%, and Raytheon rose 0.5%. Boeing gained 0.1%. General Dynamics (GD) and Huntington Ingalls (HII), which build submarines, were up 0.3% and 2.1%, respectively.

December 23, 2016 - Posted by | business and costs, politics, USA, weapons and war

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