Lockheed Martin gets $35 billion Trump push
WASHINGTON - U.S. President Donald Trump is set to meet munitions makers at the White House on Wednesday as his administration pushes to expand weapons
WASHINGTON - U.S. President Donald Trump is set to meet munitions makers at the White House on Wednesday as his administration pushes to expand weapons production after military operations in Iran and other conflicts drew down U.S. stockpiles.The United States has supplied large quantities of weapons to allies while also using munitions in its own military operations, raising concerns about inventories of key air-defense and precision-guided weapons and increasing pressure on contractors to boost output.Also read: White House set to host weapons makers as US defence stockpile worry growsThe meeting would mark the second White House gathering with chief executives of major defense firms focused on ramping up weapons production. A March meeting included the CEOs and other officials from BAE Systems, Lockheed Martin, Northrop Grumman, RTX Corp, Boeing, Honeywell Aerospace and L3Harris Technologies, along with Defense Secretary Pete Hegseth.The Pentagon on Wednesday awarded Lockheed Martin an undefinitized contract worth up to $35 billion to ramp up production of THAAD interceptors, part of a push to replenish missile defence stockpiles and boost output.Trump's meeting comes as Pentagon negotiators press contractors to move much faster, with tentative production agreements struck earlier this year at the center of those efforts.
The agreements include a deal with Lockheed Martin to triple production of Patriot interceptors and quadruple output of THAAD interceptors, which are used to shoot down ballistic missiles. Separate multiyear deals with RTX aim to boost production of Tomahawk cruise missiles and AMRAAM air-to-air missiles. The deals, announced as "framework agreements," have yet to be converted into contracts.Five defense industry executives, speaking on condition of anonymity, welcomed the agreements, but said Congress must first appropriate funding before companies can invest more heavily in components and production capacity. Investing before receiving government payments under the agreements would weigh on free cash flow and could hurt second-half earnings, they said. The administration has steadily increased pressure on defense contractors to prioritize production over shareholder payouts.
Trump signed an executive order in January to identify contractors deemed to be underperforming on government contracts while continuing to distribute profits to shareholders.GM Defense, the automaker's defense business unit, and Lockheed have said the U.S. Department of Defense helped facilitate a partnership between the two companies because of growing demand for additional production capacity. The Senate Armed Services Committee this month approved its version
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