Trump Demands Defence Contractors Speed Up Military Production

US President Donald Trump has launched a forthright assault on American defence contractors, warning that he will restrict dividend payments and share repurchase programmes unless they accelerate weapons manufacturing. The intervention represents an unusual presidential challenge to corporate capital allocation practices within the defence sector.

Trump announced intentions to increase the US military budget for 2027 by 50 per cent to 1.5 trillion dollars, citing what he characterised as troubled and dangerous times. He posted on Truth Social that military equipment production remains insufficient and must proceed using corporate profits rather than government funding or borrowed capital from financial institutions.

The President claimed that executive compensation packages within the defence industry are unjustifiable and excessive. He proposed capping executive pay at 5 million dollars, arguing that such constraints would ultimately benefit shareholders and serve national interests through accelerated military capability development.

Share prices for major defence contractors declined during Wednesday afternoon trading following Trump’s remarks. Northrop Grumman, Lockheed Martin, RTX and General Dynamics all experienced significant falls. However, equity values rebounded sharply during after-hours trading once Trump disclosed his plans for substantial military budget expansion.

Trump specifically identified Raytheon as the least responsive to Department of War requirements. He stated that Raytheon would be prohibited from executing additional share repurchases if the company sought continued government contracts. The President did not clarify mechanisms for enforcing proposed restrictions on dividend distributions or share buybacks.

Legacy defence contractors routinely distribute dividends and authorise share repurchase programmes. Lockheed Martin raised its dividend for the twenty-third consecutive year in October to 3.45 dollars per share whilst authorising up to 2 billion dollars in share purchases, bringing total repurchase commitments to 9.1 billion dollars. Many substantial defence programmes have experienced considerable cost overruns and schedule delays; Lockheed’s F-35 fighter jet programme exemplifies such challenges, whilst Northrop Grumman’s 140 billion dollar Sentinel intercontinental ballistic missile programme faces an 81 per cent budget overrun.