Posted on 01/07/2026 9:12:44 PM PST by SeekAndFind
President Donald Trump on Wednesday said he “will not permit” defense companies to issue dividends or stock buybacks until those firms speed up their production of military equipment and address his other complaints about the industry.
Trump, in a lengthy Truth Social post, also took aim at defense contractors’ executive pay packages, calling them “exorbitant and unjustifiable.”
“Defense Companies are not producing our Great Military Equipment rapidly enough and, once produced, not maintaining it properly or quickly,” he wrote.
Until those companies build new production plants, “no Executive should be allowed to make in excess of $5 Million Dollars,” Trump declared.
Shares of General Dynamics , Lockheed Martin and Northrop Grumman each fell about 3% following Trump’s comments.
Trump later singled out Raytheon as “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.”
He said that the Pentagon will cut its business ties with Raytheon unless it “steps up” on investment in plants and equipment, adding that “under no circumstances” can the company do any more stock buybacks in the meantime.
Shares of RTX, the parent of Raytheon, slid an additional 2% in after-hours trading after closing down 2.5%. A major defense contractor, RTX manufactures advanced air-to-air missiles and many of the components in the F-35 fighter jet.
It was not initially clear what impact or binding force, if any, Trump’s announcement would have on major defense companies’ financial activities. The White House did not immediately respond to CNBC’s request for additional information.
(Excerpt) Read more at cnbc.com ...
So now we find out that we’re in no condition to ramp up military production. Needless to say, anyone familiar with the OUTSOURCING done over the last 4 or 5 decades, and with our wonderful Just-in-Time production, is not surprised at this, not one bit.
Many believe the true “deep state” actually resides in very high paying contractor jobs, especially CEO/COO or BoD positions as you can’t make near as much money being an actual federal employee. However, high salaries and earnings are supposed to be the profit motive for capitalistic companies to exceed the performance of government-only production. In some ways this could actually be interpreted as a step towards nationalizing those companies eventually, which is probably not the best long term solution.
President Donald Trump on Wednesday said he “will not permit” defense companies to issue dividends or stock buybacks until those firms speed up their production of military equipment and address his other complaints about the industry.
And where in the Constitution is this power?
“Department of War”
Mr. Give tariffs to the Soviet U.S. Military State, instead of directly to us who finance it. ✖️
All Federal contracts should have clauses for performance based pay.
Then if only we could work up something like that for taxation of income for upper level gov’t officials including Congress. This could be something along the lines of increasing confiscation of income over $150,000 (2025 dollars) as private sector GDP decreases and/or National Debt increases, with some sort of time lag correction built in to favor long term performance over short term gains that may occur at the expense of long term positive performance.
He who pays the piper calls the tune.
I’m curious about where the legal authority is for Trump to attempt this. I can’t find it in Article 2 anywhere.
You know what just occurred to me?
“HA! So much for the nonsense that Trump is just in the pocket of the Defense contractors!!”
Dumb question, but is this really within his authority as president?
Aren’t their contracts based on bids being awarded? Aren’t they obligated to meet the terms of the contract including production quotas and time to completion? Does the government have an option to do as Trump proposes should the contractors not up production as he demands?
Let me know when you find it.
That is not how our system of government works.
“Now”?
It’s been a problem for decades!
That said, perhaps the most vivid example I can cite was back at the beginning of the Ukraine war: CBS 60 Minutes to their credit did an excellent piece on the production of the standard rockets for the (6x) HIMARS launchers and other related launchers. The factory was very cool (to me, a guy who once did some production engineering, used to whomp up assembly line instructions for new models, come up with improved procedures, etc.) The interview of the plant manager was quite interesting, too.
HOWEVER, toward the end of the piece, the need for increased production came up. I don’t recall the exact figures, but, basically, a production increase of 20% or so was not too big a problem. An increase of 50% was considered doable, but difficult, and would require, IIRC, perhaps a year or more. To double production? The plant manager appeared stunned by the question, paused, and said (paraphrasal), “We’d have to study it.”
I was flabbergasted! No one had even done a contingency study to consider what might be needed to accomplish a mere doubling of production of one well proven product of a massive corporation.
My God!
The company I worked for back in the day doubled production, or more, in several different years during our “ascent”. Granted we were not building top end defense gear, but, OTOH, we WERE often introducing new models that sometimes required new or modified assembly procedures or materials, newly designed production equipment (often partially or completely our own in house designs involved), etc. Yeah, sometimes we busted out butts to do it, and I worked some crazy hours, but, we did it. Lord knows I’d have been a lot happier to have another engineer assisting on the production end (actually, we eventually did) so I could concentrate in new product design, but with my boss working on the more complex production machinery, and general setup of new production lines, we pulled it off.
A defense contractor saying “We’d have to study it” to double production of a crucial weapons system??? I STILL find myself cursing about it...
Write it into the contracts.
It is a bit tricky with new systems coming into production, as difficult tech problems crop up as the rule, not the exception. (Tell me about it, Mr. Murphy! — Also see my above post # 16 for my background.)
However, for established systems and less complex systems, it is easier. For damn sure these defense contractors should be required to do contingency studies. Ie., “Have a effing plan should production of HIMARS rockets need to be tripled.”, and so on.
This is an area where authoritarians like Putin have an advantage. If stuff doesn’t get done, there are plenty of high windows in Moscow...
Being a civilized person, I wouldn’t resort to that. Unless, maybe, someone didn’t even do competent contingency planning...
(Just kidding - the profit motive correctly structured can work just as well or better.)
Countries in Decline, have traditionally, gone the way of military expansion/spending. The Butter is had, 30+trillion of it Congress and Trump are doing nothing about it.
That tariff 💰 should have gone straight to everyone.
Next thing, Trump will parade down Pennsylvania Avenue, jack boot step, our military State, just like the Soviets, and currently Red China.
Guns, with the Butter spent, so that folks can’t afford housing and transportation.
Bullshit. The ability to do that ended with the "peace dividend" and the consolidation of 'aerospace' companies in the early 1990s.
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