Arms Makers Find Being Cash-Heavy Is Mixed Blessing -NYT

[Rose Siding]

The nation's military contractors are awash in cash, which is making their shareholders happy and pushing their stocks to new highs. Less happy, however, is the Pentagon, which is the source of much of that cash and may now want something in return.

At the moment, about $25 billion to $30 billion is sitting in the coffers of the top military contractors, a result of record Pentagon budgets and robust government spending on homeland security.

"This is a politically sensitive issue," said Byron Callan, an industry analyst at Merrill Lynch. "The companies have got to keep shareholders happy. But there is a political reality. If companies take this cash and give shareholders a big dividend, the Pentagon might say, 'Help us with that new fighter program.' "

Of course, companies in many other industries are also enjoying a cash surplus. But what sets military companies apart is that they are either partly, or nearly fully, indebted to the government for their revenues.

http://www.nytimes.com/2005/05/12/business/12cash.html?

[Miss Chybil]

1. Money for nothing? And we're cutting back on health care, school funding

emergency services, food stamps and infra-structure? I just don't get it.

[stillcool]

2. ..the part of all this i find fascinating....

we make the weapons and sell them to our enemies to use against us. There is just so much money to be made from war and false security. Smedley Butler certainly called it on this one.