Starting Points: Northrop Grumman

Apr 12, 2010

BAE Systems Tops List of Biggest Arms Companies - NYTimes.com

By DAVID JOLLY

PARIS — BAE Systems has topped the list of the world’s biggest armaments companies, as the company, based in London, sharply expanded its sales of armored vehicles for the wars in Iraq and Afghanistan, a Swedish research institute said Monday.

The Stockholm International Peace Research Institute said BAE moved up two spots in 2008 to become the largest arms maker, with military sales of $32.4 billion. It was followed by Lockheed Martin, Northrop Grumman, Boeing and General Dynamics, all based in the United States, in the top five spots.

Image by Kuba Bożanowski via Flickr

Though BAE is a British company, more than half of its business is with the United States. Sales in its land and armaments business rose to $12 billion from $7 billion, the institute said, largely on the strength of sales to the U.S. military of mine-resistant, ambush-protected, or MRAP, vehicles.

Total arms sales by the world’s 100 largest arms-producing companies rose to $385 billion in 2008, an increase of $39 billion from a year earlier, the institute said. The data are for 2008 because that is the latest period for which the figures can be verified and analyzed, the institute said in its annual ranking.

The institute, partially financed by Sweden, describes itself as “an independent international institute dedicated to research into conflict, armaments, arms control and disarmament.”

Chinese companies were conspicuously absent from the list, even though the institute ranks China’s military spending as second only to that of the United States. “China probably would appear in the top 100 if we had adequate information,” Bates Gill, director of the institute and a longtime student of East Asian military affairs, said by telephone. “The figures are opaque. Still, it’s a big, big industry,” he said.

But even considering China’s huge domestic sales, it does not rank among the top 10 exporters, he said. The United States ranks first, Mr. Gill said, followed by Russia, Britain, Germany and France.

Mr. Gill said that “one or two of the big Chinese producers, those making rockets for their space program, for example, would probably rank in the top 25 if we simply valued Chinese production at the international market rate.”

China’s overseas arms sales have declined in the past two decades, Mr. Gill said. “Partly that’s because of a greater availability of other competitors with more advanced weaponry since the end of the Cold War,” he said, “and partly, quite simply, because China doesn’t compete very well in terms of quality.”

Still, he noted, Pakistan ordered Chinese fighter jets last year in a deal worth more than $1 billion, a sign that Chinese exporters were taking overseas markets seriously.

Also notable, the institute said, was that Navistar, a truck maker based in Illinois, sold military goods worth $3.9 billion to the U.S. government in 2008, an increase of 960 percent from 2007. The Navistar sales were primarily of armored vehicles for use in Afghanistan.

North American companies, of which all but one are based in the United States, dominate the list, accounting for 60 percent of arms sales by the top 100 companies, the institute said.