President Trump signed an executive order prioritizing the “warfighter” in the defense industry.
“The performance of America’s defense industrial base is critical to this capacity,” the order says. “After years of misplaced priorities, traditional defense contractors have been incentivized to prioritize investor returns over the Nation’s warfighters.”
While some contractors have made investments in production capacity and the nation’s interests, the order says, many contracts have instead sought to “pursue newer, more lucrative contracts, stock buy-backs, and excessive dividends to shareholders at the cost of production capacity, innovation, and on-time delivery.”
“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 states. “Every firm across our economy has a right to profit from prudent investment and hard work, but the American defense industrial base also has the responsibility to ensure that America’s warfighters have the best possible equipment and weapons.”
Trump took to Truth Social to criticize defense contractor Raytheon, stating that the company has been the “least responsive to the needs of the Department of War, the slowest in increasing their volume, and the most aggressive spending on their Shareholders rather than the needs and demands of the United States Military.”
“Either Raytheon steps up, and starts investing in more upfront Investment like Plants and Equipment, or they will no longer be doing business with Department of War,” Trump added. “Also, if Raytheon wants further business with the United States Government, under no circumstances will they be allowed to do any additional Stock Buybacks, where they have spent Tens of Billions of Dollars, until they are able to get their act together.”
