Rolls-Royce & BAE Profits Soar as Governments Feed the Imperialist War Machine

Rolls-Royce and BAE Systems have raised their profit forecasts as governments across the capitalist world prepare to pour even more public money into weapons, surveillance systems and nuclear submarines.

Rolls-Royce now expects to make an underlying operating profit of between £4.7bn and £4.9bn this year, up sharply from its previous forecast of £4bn to £4.2bn. Its expected free cashflow has also risen to between £3.8bn and £4bn. Shares in the company jumped by 5.5 percent after the announcement, making it the biggest riser on the FTSE 100.

BAE Systems, Britain’s largest arms manufacturer, expects its earnings to rise by between 10 percent and 12 percent. The company had previously forecast growth of between 9 percent and 11 percent, but sustained increases in military budgets have given its shareholders reason to expect even greater returns.

These figures expose the material interests behind the constant calls for higher “defence” spending. Every new missile contract, combat aircraft and nuclear submarine represents guaranteed business for a handful of enormous corporations. The public pays through taxation and cuts elsewhere, while private shareholders collect the profits. War spending acts as a vast transfer of wealth from the working class to monopoly capital.

Rolls-Royce produces engines for combat aircraft, turbines for warships and submarines, and propulsion systems used in military surveillance aircraft. The company told shareholders that it expects to benefit from spending commitments made at the recent Nato summit, including purchases of the Saab GlobalEye airborne early-warning system and the MQ-4C Triton surveillance drone, both of which use Rolls-Royce engines.

The company has already profited from the military build-up that followed the entry of Russia into the the Ukrainian civil war, on the side of the breakaway republics, in 2022. Its power-generation business has also benefited from the expansion of energy-hungry AI datacentres, while the recovery of long-distance air travel has increased revenues from civilian aircraft engines. Military contracts, technological monopolies and the revival of commercial aviation have combined to produce a windfall for its owners.

Rolls-Royce chief executive Tufan Erginbilgiç described this as the continued “transformation” of the company.

“We have made significant operational and strategic progress in the first half of the year,” Erginbilgiç said. “In civil aerospace, where we continued to improve our aftermarket profitability, we have also effectively eliminated aircraft on ground, providing a significant operational benefit to our customers.

“In defence, we continued to establish our leading position in autonomous propulsion, with several key milestones achieved in the period.”

The language of corporate management strips away the reality of what’s being produced. “Autonomous propulsion” means technology for machines designed to monitor, threaten and attack people with less direct human involvement. “Aftermarket profitability” means extracting more money from airlines after engines have already been sold. What appears in the company accounts as operational progress rests on its control over technologies that states and commercial operators can’t easily replace.

BAE Systems sits even more directly at the centre of British imperialism. It manufactures tanks, fighter aircraft, missiles and ammunition, supplying both the British state and allied governments abroad. It has benefited from expanding demand in the US, which raised military spending even before its war on Iran, as well as from weapons purchases by Britain’s allies in the Gulf.

The company cited a contract to provide training, equipment and support services for 20 Typhoon aircraft sold to Turkey. It has also agreed to help the US quadruple production of the infrared seeker used by the Terminal High Altitude Area Defense interceptor missile. At home, BAE holds a £5.9bn government contract to complete HMS Dreadnought, a submarine built to carry Britain’s nuclear weapons.

BAE chief executive Charles Woodburn said: “The global threat picture remains highly volatile and governments are responding with sustained increases in their defence budgets.

“The combination of our proven execution, diverse geographic footprint and continued investment in our technology and facilities, alongside our healthy order backlog and growing opportunities across our markets, positions us to keep delivering long-term growth.”

For the arms industry, a “volatile” world is a world of growing opportunities. The worsening conflicts produced by imperialist rivalry create demand, while military contractors have a direct financial interest in ensuring that demand never disappears. They don’t need to manufacture wars by themselves. Their position is secured by a capitalist system in which competing states use military force to protect markets, resources, trade routes and spheres of influence.

The state isn’t being misled by the arms companies. It serves the same ruling class. British governments award contracts, guarantee orders, subsidise research, promote arms exports and use diplomacy to open foreign markets for British manufacturers. Weapons companies then return part of the wealth they receive to investors, executives and the wider financial institutions that own their shares.

Workers are told that hospitals, councils, schools and disability support must live within strict financial limits. No such restraint applies when the ruling class wants new warships, missiles or nuclear weapons. The higher profits expected by Rolls-Royce and BAE Systems aren’t an accidental side effect of militarisation. They’re evidence of what the militarisation is for: defending an imperialist order while creating secure and expanding markets for British capital.