Jobs-for-bombs: This is how US is profiteering from Israel’s war on Gaza

Israel’s war on Gaza is proving to be a shot in the arm for the US economy, with up to 80 percent of its all-time high military aid to Tel Aviv in the last 12 months routed back to American companies.

US spending on Israeli military and related operations in the Middle East since October 7, 2023, is nearly $23 billion, substantially higher than in any other year since Washington began granting military aid to Israel in 1959, according to a research paper released by the Costs of War project by Brown University’s Watson Institute.

The terms of military aid require the Israeli government to divert most of that money back to the US for buying weapons from American companies.

The condition ensures a “steady flow” of income for US weapons firms that, in turn, provide “stable manufacturing jobs” in small and midsize communities across the country.

“The foreign military assistance programme requires most purchases to be from US companies. This is a longstanding arrangement, and the US makes this point in its arguments in favour of such assistance,” Harvard University professor Linda J Bilmes, who co-authored the research paper, tells TRT World.

Israel is one of the few countries that are allowed to buy arms directly from US companies with “minimal” oversight.

Bilmes says the Biden administration has “openly justified” its foreign aid spending for Israel in the name of “creating jobs for Americans” as US weapons makers hire workers to “replenish” the depleting stockpiles of arms and ammunition.

In the budget for 2025, the White House made a case for its $92 billion emergency supplemental request for urgent national security needs—including those relating to Israel—on the pretext that it would create and sustain jobs in “dozens of states across America”.

This becomes especially important in the political context, with the Democrats facing a stiff challenge from Republican candidate Donald Trump in this year’s presidential elections.

Trump has made the “failing American economy” under President Biden the centrepiece of his campaign, along with immigration.

Bilmes lists six big companies that are supplying arms and other equipment to Israel – Boeing, General Dynamics, Lockheed Martin, Northrop Grumman, RTX (formerly Raytheon) and equipment producer Caterpillar.

These firms, along with their suppliers and financial institutions, have maintained “longstanding commercial relationships” with Israel, which is their “important customer”.

RTX, formerly Raytheon

RTX is the world’s largest producer of guided missiles, which are capable of changing direction after leaving their launching pads.

The company sells Israel air-to-surface missiles for its F-16 fighter jets as well as engines for F-15 and F-16 fighter jets, the research paper says.

RTX also runs a joint venture called Rafael with an Israeli weapons company. It produces interceptors for Israel’s Iron Dome air defence system meant for stopping short-range, surface-to-surface rockets of up to 70-kilometre range.

Lloyd Austin, the current US Secretary of Defence, is a former board member of Raytheon and has a “depth of experience working for the arms industry”.

Owing to lucrative defence contracts, the company’s market value has gone up almost 84 percent since October 7, 2023.

Lockheed Martin

The world’s largest weapons manufacturer, Lockheed Martin supplies Israel with F-16 and F-35 fighter jets that Tel Aviv has used “extensively” to bomb Gaza.

It also makes C-130 Hercules transport planes that Israel used during its ground invasion last year.

Lockheed Martin manufactures AGM-114 Hellfire missiles for Israel’s Apache helicopters. In the first month of Israel’s war on Gaza, the company delivered 2,000 missiles to Tel Aviv.

On November 9, Israel struck near the Al Shifa Hospital in Gaza City using a Lockheed Martin–made Hellfire R9X missile.

On a call with investors in October 2023, company CEO Jim Taiclet said Israel’s war on Gaza was a potential driver for increased revenue in the coming years.

The company’s market value has increased more than 55 percent since October 7, 2023.

Boeing

The world’s fourth-largest weapons manufacturer, Boeing makes F-15 fighter jets and Apache AH-64 attack helicopters that the Israeli Air Force has used “extensively” in both Gaza and Lebanon in its ongoing war on the two fronts.

Israel dropped two Boeing-made 250-pound guided bombs on the Tel al-Sultan refugee camp in Rafah on May 26, killing at least 45 people.

The company has faced major financial difficulties over the past few years partly because of its commercial division that sells passenger aircraft.

But it has now “shifted its focus” to its defence, space and security (BDSS) division, which produces different models of bombers, helicopters and electronic surveillance equipment, the research paper says.

The BDSS division has also been losing money in recent quarters because of cost overruns on old, “fixed-price” defence contracts for which it would “bid aggressively” before the pandemic.

As of the latest quarter, Boeing’s BDSS division had orders amounting to $4 billion and an order backlog of $59 billion.

Other beneficiaries of war

General Dynamics, which originally produced F-16 jets, is the world’s fifth-largest weapons maker. It’s the only US company that produces metal bodies for the MK-80 bomb series, one of the primary aerial munitions Israel has been using to bomb Gaza.

The largest of this series, the 2,000-pound bomb, is so deadly that it brings instant death to people within 100 feet of distance, with lethal shrapnel reaching as far as 1,200 feet. Israel dropped more than 500 of these bombs in Gaza during the first month of the war.

The market value of General Dynamics has risen more than 37 percent in the last 12 months.

Northrop Grumman is the world's third-largest arms manufacturer. It has sold Israel the missile delivery system for Apache helicopters as well as laser-based weapon delivery systems for fighter jets.

It’s also the supplier of Sa'ar 5 warships that the Israeli Navy has used in its assault on Gaza.

The company’s total value has increased by more than 28 percent in the last one year.

Israel uses D9 armoured bulldozers made by US company Caterpillar to demolish Palestinian homes. Israel ordered “dozens of additional D9 armoured bulldozers” immediately after October 7, 2023.

The company’s market value has grown more than 52 percent since Israel started bulldozing homes in Gaza a year ago.