In his historic trip to Saudi Arabia, President Donald Trump signed a 10-year $350 billion arms deal with the kingdom of which $110 billion is effective immediately. In addition to the arms deal, the two countries signed several non-military memorandums of understanding and contracts, including a $20 billion investment by the Saudi sovereign wealth fund in the U.S. infrastructure projects through a Blackstone investment vehicle. The deal will create thousands of new jobs in the U.S. and injects capital to the U.S. markets and companies. One of the companies which benefit from military and non-military deals made between the Kingdom and the U.S. is Boeing, which has just recently signed two multi-billion dollar deals with the Islamic Republic of Iran, the Kingdom’s arch-enemy in the region. The …show more content…
In 2016, 69 percent of Being’s $94 billion revenue came from the commercial aerospace. However, only 50 percent of Boeing’s earnings from operations come from its commercial aircraft operation. When it comes to operating margin, in 2016 the commercial aircraft division lags behind the defense division: 4.8 percent vs 10.2 percent. This trend is also observable globally where the margins are much higher for the defense sector compared with the commercial aircraft business. The bottom line is that despite Boeing’s larger civilian aircraft division, the defense division is as much as important to the company’s future. The Saudis and its allies can put pressure on Boeing on its both main lines of business. The UAE and Saudi have large national carrier airlines, the Etihad airways and the Saudia. The UAE-owned Emirates is a world class airline and the largest one in the Middle East. It is true that Iran’s market is large and untapped, but Iran’s regional aggression and its support for terrorism impose immense political risk on any deal between Iran and a US