Defense industry

from Wikipedia, the free encyclopedia

The armaments industry , also known as the security and defense industry (SVI) in Germany by its own name , is the branch of industry that produces equipment for the military . The core area is the production of weapons , mobile and stationary weapon systems and ammunition for the fulfillment of sovereign security tasks . However, these only take up a small part of the total volume of goods. The much larger share, and the part of the industry designated as the focus, goes back to the so-called extended area such as communication or monitoring technologies, which are also used in the private sector, e.g. B. be used at airports.

Armaments

Categorization

Core area of ​​security and defense industry

Goods for interdiction and effect

  • Weapons systems, weapons and ammunition

Extended area of ​​security and defense industry

Goods for prevention and operation management

  • Operational readiness (e.g. analysis software)
  • Mission mobility (e.g. Coast Guard boats)
  • Monitoring, reconnaissance, alerting (e.g. video surveillance)
  • Protection (e.g. body protection against fire)
  • Management, control, communication (e.g. navigation technology)
  • Damage minimization (e.g. flood control)

Provision of armaments

Armaments are produced to guarantee the public good of national defense . The state is responsible for the provision of public goods . A public good is when there is non-excludability from consumption and there is no rivalry in consumption. The efficient provision of armaments is problematic, as these always cause market failure ; due to information asymmetries and external effects .

However, armaments are produced (on behalf of the federal government) by a number of private companies. No complete numbers and names of companies can be found that reveal who belongs to the German arms industry.

Arms market

“The main difference between the armaments market and other markets is that in most industrialized countries the state is a monopsonist on this market; at most it happens that foreign buyers - mostly governments - are allowed. "

Enquirer

In order to look at the demand side of the armaments industry, a distinction must be made between the German state and the “remaining” demand. The terms monopsony , i.e. demand monopoly and an appearance on the world market are not necessarily mutually exclusive . Because through the War Weapons Control Act , the public sector could generally act as the sole customer in the market, since this specifies which armaments may be manufactured, transported and placed on the market. Nevertheless, the state also has an interest in these goods - under certain conditions - being sold worldwide. There is therefore a mutual dependency. For example, by securing tens of thousands of jobs, maintaining know-how in development and production, and selling those goods.

providers

All companies that produce armaments are organized on a market economy basis. Nevertheless, the supply side of the armaments market has to live with some special features. Depending on how diversified the company's product range is, they are more or less dependent on the state - since only the state is allowed to tender an order for armaments (see: Provision of armaments). If a company exclusively manufactures armaments for military use, the company's order situation is heavily dependent on the respective government; whether they want to spend a lot or little tax money on armaments.

regulation

There are laws and regulations that clearly define the field of action in which the arms industry is allowed to operate. The War Weapons Control Act states that certain weapons may only be manufactured, transported and placed on the market with the approval of the federal government. The government is also taking measures to prevent corruption, to regulate German arms exports, or to control if former officials want to switch to the arms industry.

criticism

Among other things, the armaments industry is repeatedly criticized because of poor functionality of weapons - such as the G36 assault rifle from Heckler & Koch - or delays in deliveries.

From an economic point of view, these problems can usually be explained by the fact that the awarding of contracts involves public tenders . The economically most advantageous bidder receives the bid from the state and is allowed to produce the armaments. Due to enormous information asymmetries vis-à-vis the respective arms companies, the state can hardly check - and if so, only with high transaction costs - whether the estimated costs or cost increases are legitimate and might not have to be borne by the respective company.

Examples of cost increases

In the case of a small request (increase in the cost of large weapon systems, especially because of the Puma infantry fighting vehicle ) to the Bundestag, the government replied: "Contract penalties are not agreed in the procurement contract, as they were not enforceable in the course of the contract negotiations due to the monopoly of the contractor."

Calculated unit price: 6.5 million euros, actual unit price: 9.9 million euros

One of the longest and most expensive armaments projects is the Euro Hawk fighter aircraft . The idea of ​​a reconnaissance drone for the German Armed Forces arose in 2000. The American arms company Northrop Grumman and the European aerospace company EADS were involved . Apparently there was early evidence that the drone was nowhere near the required standards for approval. Nevertheless, tax money was still used for the project and further test flights were arranged. The then Defense Minister Thomas de Maizière (CDU) only decided in 2013 to shut down the drone project because it was not foreseeable that it would get approval for German airspace. Until then, the whole thing had cost the German taxpayer around 600 million euros without any benefit.

history

This article or paragraph presents the situation in Germany . Help us to describe the situation in other countries.

The armaments industry continued to develop in the course of industrialization in Western Europe in the 19th century. In the beginning there were individual companies, traditionally mostly state-run, that produced firearms . Gradually, large and very diverse large private companies developed such as Rheinmetall and Krupp in Germany, Schneider in France, Škoda in Austria-Hungary, Bethlehem Steel in the United States. In addition to the production of handguns , the manufacture of gun material became more and more important.

The importance of modern weapons became apparent in the Franco-Prussian War of 1870/71 : Alfred Krupp's steel breech- loading guns were the decisive artillery . They could shoot over 4 km (more than double the range possible up to then). The newest of these guns at the time was called the C / 64/67 ; it had numerous advantages. The Battle of Sedan in particular showed that a high rate of fire (up to ten rounds per minute) combined with a long range and good hit performance produced a devastating effect. The French had advantages in range and cadence with the new Chassepot rifle and the Mitrailleuse machine gun . The former was superior to the Prussian breech- loading needle gun .

The invention and further development of the explosive shell around 1890 brought about great upheavals in warfare:

  • Classic fortifications with walls made of masonry and earth could not withstand the new shells. The forts (partly built in the second half of the 19th century, e.g. the French Barrière de fer ) were partly reinforced with concrete due to this explosive shell crisis ; they lost their importance almost completely at the latest by the end of the First World War . For example, the French fortress of Maubeuge had to surrender just a month after the start of the war, after being shot down with explosive shells by German artillery during a two-week siege .
  • Explosive shells could cause great damage to the unarmored parts of warships at short to medium combat distances .
Manufacture of armored vehicles at Rheinmetall in the Third Reich

The arming of the imperial navy before the First World War secured orders for the up-and-coming companies in Germany and supported the expansion of their capacities. In 1898 the Reichstag passed a new naval law which stipulated further expansion. Before 1914, naval requirements were the most advanced armaments sector in terms of technology and innovation.

Women at work in a British arms factory (1915)

After the First World War, which acted as an enormous pacemaker for new branches of armaments ( aviation industry , motor vehicle industry , tanks , chemical weapons ), Germany's armaments industry was set tight limits in the Treaty of Versailles . Arms production was monitored internationally and arms exports were completely banned. The Nazi regime brought it enormous growth with its armament of the Wehrmacht and its war policy. After the Second World War , the armaments industry was dissolved in 1945 as part of the demilitarization of Germany. In the Federal Republic of Germany, it experienced a new beginning in the mid-1950s as part of western integration and rearmament .

In the past, arms manufacturers had a number of influence on political events in order to improve conditions for their branch of industry. This also resulted in illegal bribes from armaments lobbyists. Well-known examples are the arms dealer Karlheinz Schreiber and the former State Secretary and President of the Federal Office for the Protection of the Constitution Ludwig-Holger Pfahls .

In the ranks of the peace movement , peace research and also the trade unions , concepts have been developed since the 1980s as to how the transition from military to civilian production can be shaped ( armaments conversion ). These concepts are often not implemented, and in some cases the opposite trend can be observed. In the course of the war on terror since 2001 ( 9/11 ), the arms industry expanded. The annual average of international trade in heavy conventional weapons rose by 22 percent between 2005 and 2009 compared to the annual average for the years 2000-2004. Companies that manufacture military and civilian products are trying in part to sell the civilian part of the company (e.g. BAE Systems sold its Airbus stake in 2006) and to increase the military stake. In the German arms sector, the number of employees fell from around 290,000 (1990) to 80,000 in 2002.

Companies

Until 2017, due to a lack of data , SIPRI refrained from publishing figures on Chinese arms companies. Only in the publication of the year 2020 did the institute classify the three Chinese companies AVIC , Norinco and CETC in the ten largest arms companies in the world for 2018.

The 10 largest defense companies in the world in the mid-2010s, excluding China
Companies country rank Sales
arms
Total sales		 Share of
arms
business 		Profit Working
schäf-
preferential
2014 2013 2014 2013 2014 2014 2014 2014
Lockheedmartin-logo.svg United States 1  1  37470 35490 45600 82% 3614 112000
Boeing-Logo.svg United States 2  2  28300 30700 90762 31% 5446 165500
BAE Systems logo.svg United Kingdom 3  3  25730 26830 27395 94% 1238 83400
Raytheon.svg United States 4th  4th  21370 21950 22826 94% 2258 61000
Northrop-grumman.svg United States 5  5  19660 20200 23979 82% 2069 11000
General-Dynamics-Logo.svg United States 6th  6th  18600 18660 30825 60% 2819 99500
Airbus Group Logo 2014.svg EU (especially Germany,
France, Spain) 		7th  7th  14490 15740 80521 18% 3117 138620
United technologies logo.svg
 United States 8th  8th  13020 11900 65100 20% 6220 211000
Logo Leonardo.png Italy 9  9  10540 10560 19455 54% 27 54380
Logo L3Communications.svg United States 10  11  9810 10340 12124 81% - 45000
Revenues and profits in million US dollars, figures excluding China, as of 2014

Other important armaments manufacturers are:

Arms export

The largest arms suppliers in the world are the United States of America, followed by Russia, Germany, France, China and Great Britain. All of these countries have highly developed arms factories and are in competition with one another to develop new and more effective weapons systems. The figures in the following table come from the SIPRI database 2016 and are rounded to billions of US dollars based on 1990 prices.

country 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
United StatesUnited States United States 11,553 7.591 5,682 4,955 5.618 6,752 6,758 7.521 7,834 6.814 6.822 8.169 9.111 9.018 7.384 10.194 10.184 9,894
RussiaRussia Russia 4.264 4,546 5.427 5.635 5.307 6.250 5.227 5.113 5.561 6.264 5.102 5,993 8,556 8.402 8,462 5.971 5,554 6.432
GermanyGermany Germany 1,871 1.619 0.923 0.916 1.731 1.139 2.081 2.710 3.257 2.388 2.547 2.725 1.359 1.161 0.942 1,200 1,792 2.813
FranceFrance France 1,859 1.116 1.455 1.474 1.441 2,324 1,842 1.702 2.408 2.063 1.959 0.911 1,770 1.067 1.578 1,978 2.080 2.226
United KingdomUnited Kingdom United Kingdom 1,380 1.638 1,392 1.102 0.752 1,221 1.069 0.995 0.984 0.990 1.021 1.101 1.010 0.930 1.484 1.704 1.139 1.393
China People's RepublicPeople's Republic of China People's Republic of China 0.332 0.302 0.515 0.518 0.693 0.386 0.281 0.643 0.479 0.591 1.138 1.459 1.336 1.666 2.068 1.083 1.764 2.123
ItalyItaly Italy 0.504 0.204 0.243 0.468 0.355 0.251 0.825 0.527 0.713 0.393 0.493 0.524 0.939 0.828 0.953 0.786 0.692 0.802
IsraelIsrael Israel 0.190 0.387 0.439 0.572 0.442 0.677 0.509 0.399 0.529 0.347 0.734 0.647 0.587 0.530 0.756 0.824 0.694 1,260
UkraineUkraine Ukraine 0.731 0.270 0.511 0.307 0.295 0.198 0.291 0.542 0.623 0.378 0.377 0.470 0.534 1,450 0.708 0.664 0.347 0.528
NetherlandsNetherlands Netherlands 0.349 0.284 0.203 0.233 0.336 0.218 0.625 1.155 1,210 0.460 0.485 0.381 0.538 0.783 0.357 0.561 0.474 0.466
SwedenSweden Sweden 0.392 0.375 0.914 0.171 0.526 0.303 0.537 0.397 0.342 0.457 0.419 0.664 0.705 0.488 0.407 0.394 0.185 0.249
SpainSpain Spain 0.043 0.046 0.008 0.016 0.095 0.052 0.108 0.840 0.601 0.602 0.961 0.277 1.437 0.546 0.733 1,110 1.151 0.483
SwitzerlandSwitzerland Switzerland 0.273 0.174 0.206 0.157 0.181 0.249 0.247 0.286 0.295 0.461 0.227 0.238 0.310 0.250 0.193 0.350 0.437 0.186
Figures in billions of US dollars

The following cases, for example, became aware of how problematic an arms export can be:

  • In the Falklands War (1982) the Argentine military fought the United Kingdom with numerous weapons that had been sold to Argentina by western countries. The Argentine Air Force owned
    • Mirage III fighters, Mirage 5 fighter bombers,
    • old (but still very powerful) Douglas A-4 fighter-bombers and
    • obsolete English Electric Canberra bombers, as well
    • two Lockheed C-130s converted into refueling aircraft
    • According to Argentine information, four Exocet air-ship missiles, which were ultra-modern at the time , were available at the start of the war.
    • The naval aviators owned five Dassault Super Étendards ; these were equipped for air refueling. 14 aircraft had been ordered, five had been delivered by the outbreak of war, one of which had to remain on the ground as a spare parts donor due to an embargo.
    • the navy owned, among other things, three modern French d'Estienne d'Orves corvettes with Exocet missiles and two modern coastal submarines of the U-boat class 209 manufactured in the Federal Republic of Germany .
  • In the war in Afghanistan , the Americans and their allies were often fought with weapons that they had supplied to the mujahideen and other rebel groups (then also known as "freedom fighters") after the Soviet invasion of Afghanistan (1979).
  • The international military operation in Libya in 2011 is directed against the Libyan armed forces. Western companies and governments sold weapons to them for years.
  • An export of 200 Leopard tanks to Saudi Arabia planned by the German government in 2011 aroused much public criticism because Saudi Arabia had recently participated in the suppression of demonstrations with tanks in neighboring Bahrain (see Protests in Bahrain 2011 ).

The export and import of weapons varies greatly from country to country and can in part be avoided by relocating production abroad. In Germany exports are regulated by the Foreign Trade Act and the War Weapons Control Act . The export permit is granted by the Federal Security Council of the Federal Government , which meets in camera. There is no parliamentary control body and arms exports do not require the approval of the Bundestag . The exports made are published once a year in the arms export report.

The five largest arms exporting countries and their main customers
Arms suppliers
Share in
worldwide
Arms export
Main buyer (share of the export volume of the supplier)
1. 2. 3.
United States 30% South Korea (14%) Australia (9%) United Arab Emirates (8%)
Russia 23% India (33%) People's Republic of China (23%) Algeria (13%)
Germany 11% Greece (15%) South Africa (11%) Turkey (10%)
France 7% Singapore (23%) United Arab Emirates (16%) Greece (12%)
United Kingdom 4% USA (23%) Saudi Arabia (19%) India (13%)
Data from 2006–2010

It should be noted that there are no globally valid standards for recording and publishing arms exports. The Stockholm SIPRI Institute describes z. For example, Germany was the third largest arms exporter in the world for the period from 2003 to 2008, with a market share of 10 percent (after the United States and Russia). On the other hand, a study by the International Institute for Strategic Studies (IISS) puts Germany in fourth place for 2006, well behind Great Britain. Russia 21.5 percent, United Kingdom 12.2 percent).

Armaments include small arms and light weapons, internationally abbreviated as SALW (Small Arms and Light Weapons) . A detailed list of the arms exports, which only include firearms , including civilian hunting and sporting rifles, as well as handguns, can be found here:

  • The 20 largest export countries for SALW

  • The 20 largest import countries for SALW

In particular, German exports to European customers increased: Compared to the five-year period from 1998 to 2003, according to SIPRI, they increased by 123 percent.

China's defense industry is growing and technologically catching up. Example: China celebrated the first “official” test flight of a stealth bomber ( J-20 ) in January 2011 . The J-20 is similar to the Russian Mig 1.44 (which never went into production) and the US Army's Raptor aircraft.

China is exporting more and more arms and is increasingly competing with the Russian arms industry. The aspiring exporter China has some advantages over Russia. Both countries are primarily targeting emerging economies that are striving for more independence from the West in terms of military policy as a market for their weapons.

See also

literature

Web links

Commons : Defense Industry  - Collection of pictures, videos and audio files
Wiktionary: Defense industry  - explanations of meanings, word origins, synonyms, translations

Individual evidence

  1. ↑ Fields of activity. (No longer available online.) In: bdsv.de. Archived from the original on July 4, 2017 ; Retrieved April 28, 2017 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.bdsv.eu
  2. ↑ a b c d e S. Schubert, J. Knippel: Quantification of the economic importance of the security and defense industry for the German business location. (PDF) WifOR Institute, 2012, accessed on April 20, 2017 .
  3. ^ A b C. Martí Sempere: The European Security Industry: A Research Agenda . Ed .: Economics of Security. Working Paper 29th Berlin 2010.
  4. ↑ L. Wildmann: Introduction to Economics, Microeconomics and Competition Policy . 2nd Edition. Oldenbourg Verlag, Munich 2010.
  5. ↑ H. Glismann, E. Horn: Armor and welfare: theoretical and structural features of the defense market. (PDF) In: No. 517. Kiel Institute for the World Economy (IfW), 1992, accessed on April 19, 2017 .
  6. ^ A b H. Heidenkamp: German armaments policy . Ed .: WIFIS - Scientific Forum for International Security e. V. Band 50 . Verlag Barbara Budrich, Opladen / Berlin / Toronto 2015, ISBN 978-3-8474-0180-3 .
  7. ↑ Implementing Act to Article 26 Paragraph 2 of the Basic Law.
  8. ↑ U. Lenz: Cost increases in public contracts: Using the example of armaments . Springer-Verlag, Wiesbaden 1990, ISBN 3-8244-0064-2 , p. 3 .
  9. ↑ a b Cost increase in large weapon systems. (PDF) In: 18/650. German Federal Government, February 24, 2014, accessed June 8, 2017 .
  10. ↑ Marco Seliger: Euro Hawk is not allowed. FAZ, May 13, 2013, accessed June 8, 2017 .
  11. ↑ The scandal drone "Euro Hawk" costs millions more. Spiegel, July 3, 2015, accessed June 8, 2017 .
  12. ^ German summary of the SIPRI Annual Book 2010. (PDF; 535 kB) (No longer available online.) Friedrich Ebert Foundation, July 1, 2010, p. 14 , archived from the original on July 14, 2011 ; Retrieved June 26, 2011 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.sipri.org
  13. ↑ Michael Dauer: German armaments industry before the deadlock? In: Manager magazine. July 5, 2002.
  14. ↑ China is the second largest arms producer , Tagesschau.de, January 27, 2020
  15. ↑ SIPRI Yearbook 2009 , Appendix 6A , Stockholm International Peace Research Institute (PDF; 132 kB). The SIPRI Top 100 arms-producing companies, 2007.
  16. ↑ The SIPRI Top 100 Arms-Producing Companies, 2008. ( Memento of the original from August 12, 2011 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 350 kB), SIPRI Fact Sheet , April 2010, accessed on April 28, 2010 (English). @1@ 2Template: Webachiv / IABot / books.sipri.org
  17. ↑ SIPRI Database Arms Exports: SIPRI Arms Transfers Database of Top 50. In: sipri.org , (English).
  18. ↑ James S. Corum: Argentine Airpower in the Falklands War: An Operational View. In: airpower.maxwell.af.mil (English).
  19. ↑ further details in the article Falklands War
  20. ↑ Die Süddeutsche from May 9, 2011, p. 7 names among other things cluster bombs from Spain ( Instalaza , built in 2007), tanks with equipment from Great Britain, missiles from France ( EADS ) and Italian helicopters ( Agusta A109 K).
  21. ↑ Alexander Heinrich: Sand in the Gears. In: The Parliament. Issue 28–30, 2011.
  22. ↑ Trends in International Arms Transfer 2010. (PDF; 292 kB) (No longer available online.) In: books.sipri.org. SIPRI , March 2011, archived from the original on August 12, 2011 ; Retrieved August 3, 2011 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / books.sipri.org
  23. ↑ Report of the federal government on its export policy for conventional armaments in 2007. ( Memento of the original from December 20, 2008 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. In: bmwi.de , Federal Ministry of Economics and Technology. (PDF; 1.4 MB) p. 43 f. @1@ 2Template: Webachiv / IABot / www.bmwi.de
  24. ↑ a b Small Arms Survey Report 2009. In: smallarmssurvey.org , (PDF; 141 kB, English).
  25. ↑ Tagesschau: SIPRI report, Germany increases arms sales by 70 percent. ( Memento from April 30, 2009 in the Internet Archive )
  26. ↑ Chinese celebrate stealth bombers with fireworks. In: welt.de , January 11, 2011, accessed on September 5, 2015. (The US Secretary of Defense Robert Gates admitted that the project surprised even the US secret service.)
  27. ↑ China presses Russia on the world arms market. In: sputniknews.com , May 3, 2011, accessed September 5, 2015. (The Director of the Moscow Defense Industry and Arms Trade Research Center, Ruslan Pukhov , to RIA Novosti in May 2011. )