Staff Columnist

Corporate merger could transform Iowa's political landscape

Cockpit equipment made by Rockwell Collins and used in a CH-47 Chinook helicopter is pictured at the ILA Berlin Air Show in Schoenefeld, south of Berlin, Germany, June 1, 2016.    REUTERS/Fabrizio Bensch/File Photo
Cockpit equipment made by Rockwell Collins and used in a CH-47 Chinook helicopter is pictured at the ILA Berlin Air Show in Schoenefeld, south of Berlin, Germany, June 1, 2016. REUTERS/Fabrizio Bensch/File Photo

The military-industrial complex may soon become a much bigger constituency in Iowa politics.

Corporate leaders announced this month they are planning a merger between United Technologies Corp., the parent company of Cedar Rapids’ Collins Aerospace, and Raytheon Co., the world’s leading producer of guided missiles. The new company, to be called Raytheon Technologies, would be the second-largest aerospace company in the nation.

Iowa politicians have a strong interest in the ongoing success of Collins Aerospace, the biggest employer in Iowa’s second-largest city and among the state’s biggest employers overall.

That commitment was evident last year as UTC finalized its acquisition of Rockwell Collins in a $30 billion deal. Everyone from city council members to U.S. senators sought assurances from company officials that the deal would not lead to any job losses.

If the Raytheon Co. merger is successful, the new company will not only be much larger, but also have a more focused business — UTC and the former Rockwell Collins essentially are aerospace companies that happen to do some military contracts; Raytheon Co., in contrast, is a military contractor that happens to be interested in aerospace.

That could have a significant impact on Iowa’s political dynamics. Our economic fate will be much more closely tied to demand for weapons and other military equipment, and you can expect Iowa’s elected leaders to respond accordingly.

Raytheon Co. was the third-biggest military services company in the world in 2017, according to a report from the Stockholm International Peace Research Institute. That amounted to about $23.9 billion in arms sales, accounting for 94 percent of the company’s overall sales.

UTC ranked 11th on the list, with $7.8 billion in sales representing just 13 percent of its business, according to the institute’s analysis. Rockwell Collins was way down the list at 43rd.

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As part of the reorganization, UTC is spinning off its Otis elevator company and Carrier air conditioner operation, marking a further shift away from non-defense projects.

What’s more, Raytheon Co. is a major player in the political and legislative process, spending nearly $10 million on lobbying during the 2017-18 Congress, according to data from the Center for Responsive Politics.

The company’s political spending — which includes payments from affiliated political action committees, as well as employees’ individual contributions — totaled $2.4 million during the 2018 campaign cycle and ranked fifth among defense companies.

The center’s analysis also found Raytheon Co. is swept up in the infamous revolving door of federal politics. More than three-fourths of its lobbyists in the last Congress previously held government jobs.

The company formerly based in Iowa has not been nearly as active. Before last year’s acquisition, campaign spending associated with Rockwell Collins was less than 10 percent of Raytheon Co.’s, barely cracking the Center for Responsive Politics’ top-20 list for defense companies.

Until now, Iowa’s economy has not been heavily dependent on military dollars. This is one of only 11 states where Department of Defense spending — including military payroll and government contracts with private companies — accounted for less than 1 percent of the state-level gross domestic product in 2017, according to the federal Office of Economic Adjustment.

None of this is meant to suggest that the merger is a bad idea, or that companies involved do bad work. To the contrary, defense is a legitimate and necessary function of the federal government, and private companies provide great value.

Nevertheless, this provides an opportunity for Iowa constituents to reflect on our values, and clearly articulate them to our elected officials and candidates. Perhaps Iowans will accept that an increasingly bloated military budget is a reasonable trade-off for job security. Or perhaps not.

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While lobbyists and campaign funders have enormous influence over the budget and legislative process, Iowa’s seats in the Capitol belong to the voters, and we decide who fills them.

Unsurprisingly, states and congressional districts with large military contractors or significant military installations tend to send lawmakers to Washington, D.C., who favor more military spending.

Will Iowa follow that trend? That’s up to we the people.

• Comments: (319) 339-3156; adam.sullivan@thegazette.com

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