How a Nuclear Missile Monopolist Is Getting a Quarter Trillion Dollar Pentagon Contract
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How a Nuclear Missile Monopolist Is Getting a Quarter Trillion Dollar Pentagon Contract
The Pentagon and FTC allowed Northrop to monopolize nuclear missile production in 2018. Now it is in line for a $264 billion sole source contract, unless antitrust enforcers step.
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I’ve written a bit on the Northrop monopoly over the nuclear missile business, the result of a merger between Northrop and rocket engine maker Orbital ATK. Once Northrop got its hand on the dominant rocket motor producer, it denied competitors access. And voila, Boeing dropped out of the bidding for the nuclear missile upgrade, and Northrop became the sole bidder.
So Northrop gets to set the price for missiles, unless Congress bargains aggressively or the FTC unwinds the merger. Let’s start with Congress. As it turns out, monopolist Northrop is a big donor to the group of Senators who support spending more money on these missiles, informally known as the ICBM Coalition.
The efforts of the ICBM Coalition have been supplemented by lobbying and campaign contributions from ICBM contractors, led by Northrop Grumman, which has received a sole source, $13.3 billion contract to build a new ICBM, known formally as the Ground-Based Strategic Deterrent, or GBSD. Current estimates indicate that building and operating the GBSD and related warheads will cost $264 billion over the life of the program, which would provide a steady flow of revenue to Northrop Grumman and associated companies for years to come.
A quarter of a trillion dollar sole source contract? Not bad, Northrop.
There is an answer, of course. Unwind the Orbital acquisition. It’s actually not that hard, since Northrop is violating the FTC consent decree it signed when buying the firm, a decree whose condition was that it wasn’t allowed to deny rocket engines to competitors.
How a Nuclear Missile Monopolist Is Getting a Quarter Trillion Dollar Pentagon Contract
HALP can you write about rental car co. consolidations and the deliberate reduction of inventory (cars available) in order to drive prices sky-high. It is impossible in my area to reserve a rental 2 days in advance for less that $200 a day for an ECONOMY CAR. I can literally show you the $600 (3 day rental) quote from Avis. Standard rates are less for Alamo/Enterprise but they are perpetually sold out.
What about building the missiles at government facilities? For example the Redstone Arsenal in Alabama. The US Army and US Navy at one time operated a number of arsenal, shipyards and other facilities to produce armaments. Recall the issue of the Frankford Arsenal in the 1976 presidential race?
I recall that it was regarded as scandalous that ships built in naval yards cost more than did ships from civilian yards. But once the naval shipyards stopped producing ships there was a dramatic escalation in the price of warships. It was seemingly a case of being penny wise and pound foolish. And a number of civilian yards which once built ships for the US Navy have closed anyway as the shipbuilding budget has become a funnel to transfer wealth to a few large corporations.