Lockheed Snags $35B Missile Contract Amid Pentagon Pressure to Rev Up Production

Lockheed Martin, the world’s largest defense contractor, climbed 2.8% on Thursday after scoring billions in new revenue from US taxpayers over the next six years.

But while revenue is ramping up, so is pressure from Washington. In return for the promise of more predictable long-term sales, the Trump administration has pressed defense contractors to expedite production as everything-all-at-once conflicts deplete US weapons stockpiles.

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While President Donald Trump signed an executive order in January that blasted “underperforming” defense contractors for pursuing stock buybacks and paying out large dividends despite being mired in production delays, Defense Secretary Pete Hegseth emphasized in a statement this week that the administration’s strategy is paying off. “Defense contractors are now investing their own private capital in new manufacturing plants and assembly lines, putting hundreds of thousands of Americans to work,” he said. The first contract Lockheed received this week, a six-year, $8.4 billion award announced Tuesday, does just that: The company is expected to expand its capacity to produce Precision Strike Missiles (PrSMs), allowing the Army to buy more. The second six-year contract, worth $35 billion and announced Wednesday, will see Lockheed make hundreds of Terminal High Altitude Area Defense (Thaad) Interceptor missiles.

US supplies of Thaad interceptors, which destroy incoming ballistic missiles up to 125 miles away, have been depleted by the Iran war and other conflicts, making production critical. Last month, the Center for Strategic International Studies estimated it will take three or more years to replenish stockpiles, and Trump’s meeting with the CEOs of Lockheed, Boeing and Honeywell this week made plain that hurdles lie ahead:

• The New York Times reported Thursday that the executives told Trump they want more money for production expansion, and he said the administration is trying to drum up funds.
• For a start, the White House asked Congress on Wednesday for $87.6 billion in supplemental spending, most of it Iran war-related. 

Full Speed Ahead: Trump, meanwhile, said automakers Ford and General Motors are in talks with defense contractors about repurposing manufacturing capacity for weapons production. The two are also pursuing direct defense contracts with European and North American governments.

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