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30 Boeing Attack Helicopters Heading to South Korea

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By now you've probably heard the news; The Pentagon's Defense Intelligence Agency thinks "with moderate confidence" that North Korea has developed a nuclear weapon capable of being delivered on a ballistic missile. Good news, though: The DIA thinks such a weapon would have "low reliability."  

If you're like me, "low reliability" doesn't exactly elicit feelings of confidence. I mean, how accurate do you need to be to do damage with a nuke? Apparently, South Korea feels the same, as it intends to spend $1.6 billion to purchase attack helicopters from Boeing (NYSE: BA  ) equivalent to 30 helicopters at an estimated $52 million base price. South Korea also wants to purchase 60 fighter jets, all for the express purpose of countering North Korea's threats. Obviously, this is good news for defense contractors, and their investors. 

Photo: Jim Gordon, via Wikimedia Commons.

Bring on overseas spending
You've got to hand it to the guy: Kim Jong-un has a flair for the dramatic. While escalating tensions and his continued bellicose remarks aren't great, so far the only thing they've really done is serve as a means for further overseas defense spending -- in addition to the attack helicopters, Boeing's F-15 Silent Eagle, Lockheed Martin's (NYSE: LMT  ) F-35 Stealth Fighter, and the Eurofighter Typhoon developed by BAE Systems (NASDAQOTH: BAESY  ) , European Aeronautic Defense and Space, and Finmeccanica are all competing to be South Korea's fighter of choice. Plus, Northrop Grumman (NYSE: NOC  ) stands to benefit, as the U.S. has said it's willing to sell South Korea one of its most elite spy weapons, the Global Hawk -- an estimated $1.2 billion deal. 

Is it all just talk?
Many U.S. analysts believe Kim is full of hot air, with no real intention to act. An attack against the U.S. would probably be suicide for North Korea, especially given that North Korea's two allies, Russia and China, have both condemned Kim's belligerent, war-mongering talk. It's even rumored that Chinese officials have started referring to Kim as "the little upstart."  

Still, China is a longtime ally of North Korea and has critiqued America's growing military presence in Asia. So even though China has condemned Kim, there's no real way to determine how China's defense ministry would react to an attack. Moreover, it's rumored that one of the real reasons China has condemned North Korea is that it doesn't want South Korea or the U.S building up a defense system in Asia. In fact, China has said the United States' increased military presence is destabilizing Asia and escalating tensions. 

How will it all end?
Right now, the only thing that's certain is that defense companies are benefiting from escalating tensions with North Korea. Sequestration and domestic defense spending cuts are in full swing, and defense contractors are feeling the pinch. But thanks to Kim Jong-un, some defense companies are getting a welcome financial boost. And if there is an outright war, I imagine that'll only improve defense companies' revenue. Perhaps they should send Kim a fruit basket as thanks.

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Read/Post Comments (13) | Recommend This Article (15)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 21, 2013, at 2:01 PM, Maischoyu wrote:

    Here we go.. WW3 seems going to happen.

  • Report this Comment On April 21, 2013, at 2:45 PM, coastalcordage wrote:

    If you're willing to sale your most valued technology you better be darn sure you've got the measures to counter that hardware when it's used against you. Hopefully the greed hasn't ran to the "moron level" and that the next generation of military hardware will make the current generation look like nothing more than a toddlers' toy.

  • Report this Comment On April 21, 2013, at 2:59 PM, aflifer40 wrote:

    Folks, you'll have to forgive me here. It may be that I am just a byproduct of too many espionage stories/bond flicks. I have a heck of a conspiracy theory. What if, and it's a big if, North Korea has been visited by "certain" defense contractors/arms dealers and is being offered a sizeable cut of the profit of all the "world is coming to an end" weapons sales. All Lil' Kim has to do is create the need by doing what he does best. Sword rattling/war rhetoric. Move some armor divisions/missile carriers here and there and bam!! Doesn't have to spend one dollar in launching anything and hope the hole thing doesn't literally blow up in his face if the South Koreans/US decide to launch a preemptive strike. The North Koreans did during the previous conflict. All Kim would have to do then is watch the cash flow from the war scare. South Korea wants to spend how much on ramping up its defense? 1.6 Billion for attack helicopters from Boeing, 1.2B for Global Hawk,! What is 50% or so of $2.8B? Kim is taking all of the risk so I can appreciate him asking for a big cut. :) This is just the tip of the proverbial iceberg folks. Japan has already set up anti-missile batteries around it's capitol. In the end North Korea will settle back down with a nice chunk of money in its treasury to fund its armed forces and maybe something left over for its starving populace. The defense contractors will be rolling in the green for some time to come. Is my theory that far fetched? Crazy talk maybe. :) lol!

  • Report this Comment On April 21, 2013, at 3:07 PM, Zeetinka2 wrote:

    Note to coastalcordage: "Any Defense Department Weapon Sold Abroad, Must Have A Self-Destruct Failsafe System Installed" as per intelinstructUS924.226 dated 7/4/1776

  • Report this Comment On April 21, 2013, at 3:35 PM, AngelOL wrote:

    Here we go again! This one will surely become the worst. The defense contractors make tons of money from their guaranteed sales and the rest of the world suffers the horrors of a contrived war created by those who can and we take another big step towards our inevitable end. Doomsday here we come!

  • Report this Comment On April 21, 2013, at 3:44 PM, ryaj wrote:

    send the navy seals and get kim jun un..and send him to india where he will be raped a thousand times..that should open his mind to real human cruelty...

  • Report this Comment On April 21, 2013, at 5:15 PM, DiverMike wrote:

    Last I heard was the attack copters were great anti tank weapons, but against nukes? .... not so much.

  • Report this Comment On April 21, 2013, at 5:34 PM, rheppe1 wrote:

    Why spend all that money when a few P-51's could probably take him out...

  • Report this Comment On April 21, 2013, at 6:41 PM, WarIsARacket wrote:

    Boeing just made 1.2 billion dollars paid for by the American taxpayers to sell equipment that will kill people. People being killed = profit for Boeing. In the days and weeks since the Boston Marathon our government has spent billions on purchasing equipment from the companies that finance our Industrial War Machine at the expense of the American taxpayer and human life. This is nothing more than propaganda to entice the American people to support a war they would otherwise be against. What do you think we could have done with 1.2 billion dollars to help the American people instead of financing equipment to end human life?

    War Is A Racket by Smedley Butler

  • Report this Comment On April 21, 2013, at 8:39 PM, AngelOL wrote:


    You are right. What do you recoomend we do?

  • Report this Comment On April 21, 2013, at 8:45 PM, BiteMeFanBoy1 wrote:

    As an employee of a US defense contractor (a California small business) I can only say

    "Yee-Haw" ! If there is one thing that the USA makes better than anyone else in the world it is

    fighter jets and attack helicopters.

    Boeing, Lockheed Martin, and BAE Systems

    all sub-contract to hundreds of small companies like ours across the country. This means hundreds of jobs in the private sector, the REAL THING that we need to boost our economy.

    Time for America to flex her muscles. Stop all of the whining about something we can do nothing about. Let's get busy and do what we do best.

    Get to work and let's help South Korea kick some North Korean butt !!!

  • Report this Comment On April 21, 2013, at 9:21 PM, docarlington wrote:

    Just in case. we would feel foolish if some stuff went down and we were not in control.

  • Report this Comment On April 22, 2013, at 1:08 AM, peterwolf wrote:

    So basically all this article is saying is that it's those evil defense contractors who are to blame. Not the mad man, and his father before him, with illegal nukes. Not the Chinese who've done nothing to stop him. Nope, it's those evil American defense firms.

    And we wonder why other countries think we've grown weak ??

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