FedEx and Pepsi Are Top Defense Contractors? 5 Corporate Brands Making a Killing on America’s Wars
In 2001, the massive arms dealers Lockheed Martin, Boeing and Northrop Grumman ranked one, two and five among Department of Defense contractors, raking in $14.7 billion, $13.3 billion and $5.2 billion, respectively, in contracts. Last year, Lockheed’s contract dollars were almost double their pre-9/11 level, clocking in at $28 billion, while Boeing’s had jumped to almost $19 billion and Northrop Grumman, still in the five spot, had more than doubled its 2001 take, with $12.8 billion in contracts.
America’s recent wars have obviously been good to these companies. On September 10, 2001, Lockheed’s share price was $38.32. Today, it tops $70 per share. In 2001, the company’s net sales reached $24 billion. Last year, they were almost $46 billion. Likewise, Northrop Grumman’s net income has more than quadrupled in the last decade, according to the investment analysis website, Seeking Alpha. Still, these corporations are just a fraction of the story when it comes to the massive sums of money made by the military contractors since September 11, 2001.
Chris Hellman of the National Priorities Project, writing recently at TomDispatch.com, noted that since the 9/11 attacks, the United States has spent about $8 trillion on national security. Even accounting for all the funds paid out for troop salaries, overseas base construction and the training and equipping indigenous allies in Iraq and Afghanistan, among many other costs, it’s clear that vast sums of Pentagon money are flowing somewhere other than to the top weapons-makers. Unknown to most U.S. taxpayers and even many Pentagon-watchers, some of the largest and most recognizable corporations in the world have also been getting rich on America’s wars. Below are five examples of “civilian” companies that have reaped major rewards from the Pentagon during its last decade at war:
1. BP (British Petroleum): The UK foreign oil giant, perhaps most famous for dumping 206 million gallons of crude into the Gulf of Mexico last year, is also a perennial power when it comes to Pentagon contracts. Back in 2001, BP nabbed a cool $357 million in contracts from the Department of Defense. Last year, the number hit $1 billion and it’s no secret why. As defense-tech writer Noah Shachtman noted at Foreign Policy last year, the U.S. military burns “22 gallons of diesel [fuel] per soldier per day in Afghanistan, at a cost of more than $100,000 a person annually.” (Why is our Pentagon buying foreign oil?-PDWA ed)
2. FedEx: The overnight shipping giant is a long-time defense-contracting powerhouse that has also seen an exponential increase in contract dollars since September 10, 2001, when its stock was trading at just under $40 per share. By the end of that year, FedEx had been awarded about $211 million in contracts from the Pentagon. In 2010, the company received $1.4 billion from the Department of Defense and this year, with its stock closing in on $80 per share, has already passed the $1 billion mark, again. This includes a $182 million deal, inked in August, to pack and ship fresh fruit and vegetables to U.S. military bases overseas and a joint agreement, which also includes United Parcel Service (UPS) and Polar Air Cargo, which could last up to five years and potentially net the companies a combined $853 million. (No wonder the Post Office is bankrupt and canceling Saturday delivery-ed PDWA)
3. Dell: If you’re in the military and you want to pilot a drone, transfer supplies or write a memo, you need a computer. That’s just what Dell provides. The desktop- and laptop-maker has been plying the Pentagon with computers for many years and, just like Lockheed, Boeing and Northrop Grumman, has done especially well by the Department of Defense since 2001. That year, Dell was awarded $65 million in Pentagon contracts. By 2009, that number had jumped to $731 million and, over the course of the decade, has added up to a total of $4.3 billion in contracts for the PC manufacturer.
4. Kraft – From A-1 steak sauce, their signature mayonnaise and Oreo cookies to Oscar Meyer hot dogs, Planters peanuts and Wheat Thins crackers, this company ranks as one of the largest and best known food concerns in the world. Not surprisingly, it also does a brisk business with the Pentagon which has grown ever larger during the last decade. Back in 2001, Kraft inked $148 million in deals with the Department of Defense, by 2010, its yearly take had risen to $373 million.
5. Pepsi – Once upon a time it was the “choice of a new generation.” These days, it’s the choice of the Pentagon. In 2010, PepsiCo washed down $217 million in Defense Department contract dollars, compared to the mere $61 million in deals it inked back in 2001. Earlier this year, the company continued the trend by signing a multi-million dollar deal to provide the Army, Navy, Air Force and Marine Corps with “bag-in-box beverages.” (That very same day, Coca-Cola also received a slightly larger contract to provide drinks for the military.)
Other big-name firms that are regularly awarded large, lucrative deals from the Defense Department include tire titans Goodrich and Goodyear, oil giants Shell and Exxon Mobil, big food suppliers like Nestle, General Mills, Tyson, ConAgra and Campbell's Soup, and tech and telecom stalwarts including AT&T, Oracle, Sony and Verizon.
A decade of waging wars abroad, from Iraq and Afghanistan to Pakistan and Libya to Yemen and Somalia hasn’t been kind to average Americans.
As the United States poured nearly $8 trillion into national war and security spending, and the national debt ballooned from $6 trillion to $14.3 trillion, the official unemployment rate has more than doubled -- from 4.5% to 9.1%.
The number of children living in poverty in the U.S. has jumped nearly 20% since according to the National Center for Children in Poverty. And for older Americans, the risk of hunger has spiked almost 80% since 2001, according to recent report by AARP. From car companies to candy makers and even the biggest brands in organic food, so many of the world’s favorite companies have, over these years, cashed in on America’s wars.
As the United States poured nearly $8 trillion into national war and security spending, and the national debt ballooned from $6 trillion to $14.3 trillion, the official unemployment rate has more than doubled -- from 4.5% to 9.1%.
The number of children living in poverty in the U.S. has jumped nearly 20% since according to the National Center for Children in Poverty. And for older Americans, the risk of hunger has spiked almost 80% since 2001, according to recent report by AARP. From car companies to candy makers and even the biggest brands in organic food, so many of the world’s favorite companies have, over these years, cashed in on America’s wars.
