President Donald Trump on Wednesday signed an executive order that urged defense contractors to speed up arms production, going so far as to block them from paying dividends or buying back shares until they speed up.
Trump, in the order, said the United States produces the best military equipment in the world, but does not make enough of it quickly enough to meet the military’s needs.
“As a result, in these dangerous times, it is imperative that our defense contractors be held to the highest standards intended to ensure the advancement of core national interests, including with respect to the timeliness and quality of the defense items that they deliver,” the order states.
Trump shared that some contractors have made “critical investments” to increase production, but “far more have not.” The order said many of the country’s large contractors are underperforming.
“Effective immediately, they are not permitted in any way, shape, or form to pay dividends or buy back stock, until such time as they are able to produce a superior product, on time and on budget,” the order said.
In a post online, Trump said the Defense Department has pointed at the large contractor Raytheon as the “least responsive” to the department’s needs and is the “slowest in increasing their volume.” The president alleged that the company was more focused on its shareholders than the needs of the U.S. military.
“Raytheon seems to think this is the Biden Administration, and this is ‘business as usual,’ IT’S NOT!” he wrote on Truth Social. “Either Raytheon steps up, and starts investing in more upfront Investment like Plans and Equipment, or they will no longer be doing business with Department of War.”
“Our Country comes FIRST, and they’re going to have to learn that, the hard way!” the post concluded.
The Deseret News has reached out to Raytheon, which is now the RTX Corporation, for comment.
Trump’s executive order also instructs Defense Secretary Pete Hegseth to identify defense contractors that are underperforming, failing to invest their own capital in production or insufficiently prioritizing their government contracts.
If a company is identified by the government as falling into those categories, they have the opportunity to submit a remediation plan or engage with Hegseth to resolve the issues cited. If Hegseth deems the plans inadequate, he can pursue amending the existing contracts or other avenues.
This also comes as Trump shared that after conversations with Congress, he determined that the military budget for 2027 should not be $1 trillion but rather $1.5 trillion.
“This will allow us to build the ‘Dream Military’ that we have long been entitled to and, more importantly, that will keep us SAFE and SECURE, regardless of foe,” he said, citing “dangerous times.”
In a lengthy post on Truth Social, Trump shared the warning to defense contractors, urging them to ramp up production in order to stockpile the military. He said it needs to be done now with dividends and stock buybacks rather than “borrowing from Financial Institutions or getting the money from your Government.”
“Longer term, this is good for both Executives and Shareholders, because it will be GREAT for our Country!” he shared.
After his posts, shares of several large contractors, including Lockheed Martin, fell during afternoon trading, Reuters reported.