The News That Matters about the Nuclear Industry Fukushima Chernobyl Mayak Three Mile Island Atomic Testing Radiation Isotope

Oh goody! It’s a rosy time coming for investors, (such as Donald Trump) in nuclear weapons!

What It Would Cost to Modernize the U.S. Nuclear Arsenal — and Who Would Benefit, Yahoo Finance Lou Whiteman, The Motley Fool, Motley Fool, January 28, 2019  The United States would have to spend $494 billion over the next decade to enact its plan to modernize its nuclear arsenal, a figure that highlights the opportunity before contractors as the Pentagon seeks ways to pay for one of its top priorities. The total, which comes from a biannual report put out by the Congressional Budget Office (CBO), is 23% higher than the $400 billion price tag in the 2017 estimate. It comes at a delicate time for the Pentagon, which, after enjoying two years of steady budget increases, is facing a much less certain fiscal 2020 allocation.

……..Here’s who stands to benefit from the push to renew the nuclear triad.

Next-generation bombers

Northrop Grumman (NYSE: NOC) in late 2015 beat a team including Boeing (NYSE: BA) and Lockheed Martin to design and build a new long-range bomber. The Pentagon is expected to purchase at least 100 aircraft, with deliveries expected to begin in the mid-2020s and extend for a decade.

The plane, now known as the B-21, has been a near-casualty of Congressional budget battles in recent years, but the Pentagon continues to spend upwards of $2 billion per year on development. Overall, the CBO expects the Pentagon to spend $49 billion on bomber acquisition between now and 2028, which would easily make the B-21 Northrop’s most important platform……….

America’s most important deterrent

The Columbia-class submarine, designed to take over for the Ohio-class ballistic missile sub and house the nation’s stockpile of Trident sub-launched ballistic missiles, features a stealth electric drive propulsion system and improved maneuverability. The sub, to be built by General Dynamics’ (NYSE: GD) Electric Boat subsidiary with support from Huntington Ingalls (NYSE: HII), is due to be operational by 2028 to ensure second-strike capability should the U.S. be hit by a catastrophic attack………

A new rocket competition

The only major piece of the triad renewal still up for grabs is the task of replacing the nation’s arsenal of intercontinental ballistic missiles. …….In August 2017, the Air Force awarded Boeing and Northrop Grumman $349 million and $329 million, respectively, to develop competing new designs, with a goal of selecting a winner next year. The government is expected to spend more than $60 billion on ICBMs over the next decade, meaning the award would be a needle-mover for the eventual winner.

The stakes are also high for the two potential manufacturers of the solid-propellant rocket engines that will be used to power the missiles. Northrop brought one of the two contenders in-house last year with its $9.2 billion deal for Orbital ATK. The other, Aerojet Rocketdyne (NYSE: AJRD), has warned the Air Force and lawmakers it needs to win at least part of this procurement to remain a viable supplier.

Given the Pentagon’s priority to nurture a healthy and competitive supply base, it would not be a surprise to see both Aerojet and the former Orbital business split the ICBM engine award.

How to invest

…….for long-term investors who have seen defense holdings battered by near-term budget concerns, the longer timeline should provide some peace of mind.

January 29, 2019 - Posted by | business and costs, USA, weapons and war

1 Comment »

  1. Karl Grossman of Enformable on Trump and Pence

    Comment by Ken | January 30, 2019 | Reply

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