Defense firms see only hundreds of new US jobs from Saudi mega deal
WASHINGTON: Every time President Donald Trump mentions the US$ 110 billion arms deal he negotiated with Saudi Arabia last year, he quickly follows up, saying “It’s 500,000 jobs.”
But if he means new US defence jobs, an internal document seen by Reuters from Lockheed Martin Corp ( Lockheed) forecasts fewer than 1,000 positions would be created by the defence contractor, which could potentially deliver around US$ 28 billion of goods in the deal.
Lockheed instead predicts the deal could create nearly 10,000 new jobs in Saudi Arabia, while keeping up to 18,000 existing US workers busy if the whole package comes together – an outcome experts say is unlikely.
A person familiar with Raytheon Co’s ( Raytheon) planning said if the Saudi order were executed it could help to sustain about 10,000 US jobs, but the number of new jobs created would be a small percentage of that figure.
Lockheed declined to comment on the Saudi package.
Raytheon’s chief financial officer Toby O’Brien said last week that hiring overall is growing, but he did not pin it to any particular programme.
The White House dida not immediately respond to a request for comment.
Jobs are important to Trump. He campaigned on his ability to create American jobs, especially highpaying manufacturing ones.
Meanwhile he has limited his criticism of Saudi leadership over the killing of a prominent critic because he did not want to endanger the massive arms deal.
Trump’s 500,000 figure has been greeted with widespread skepticism given the five biggest US defence contractors, who make nearly every item on the Saudi list, now employ 383,000 people.
Documents seen by Reuters and interviews with defence industry sources familiar with the arms package suggest that between 20,000 and 40,000 current US defence industry workers could be involved in Saudi- bound production if the whole US$ 110 billion package goes through.
Existing workers typically are experienced, skilled, who can be redeployed more easily than new hires who would require significant upfront investment in their training.
One significant caveat to any predictions on job creation is whether all of the missile defenses and radars, ships, tanks, software, bombs and other equipment listed in the full Saudi package get delivered.
Interviews with people familiar with other major defence contractors’ plans and estimates reflect similar dynamic as Lockheed’s and Raytheon’s plans – relatively minor additions to their US workforce and more significant build-up in Saudi Arabia.
Since Trump’s trip to the Kingdom last year, little economic activity has taken place beyond Lockheed’s work on four frigates the Saudis have ordered.
The order will yield nearly 10,000 jobs in the Saudi ports for maintenance workers, but only 500 new US jobs will be created, according to documents seen by Reuters.
Executives at the several of top US defence companies say Riyadh had wanted much of the military equipment as a way to both develop new domestic industry and to create new jobs and local expertise as a part of Crown Prince Mohammed bin Salman’s Vision 2030 initiative to wean the country off oil dependency.
Saudi Arabia has set a goal of creating 40,000 defence industry jobs by 2030. — Reuters