Trump threatens US defense firms over executive salaries and production slowdown | Donald Trump News

US President Donald Trump has issued a stern warning to defense contractors who supply the US military, accusing them of profiteering.

In a society of truth job On Wednesday, he threatened action if companies didn’t take specific steps, including capping executive salaries, investing in factory construction and producing more military equipment faster.

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“MILITARY EQUIPMENT IS NOT FAST ENOUGH,” Trump wrote at one point in his lengthy 322-word message.

“It needs to be built now with dividends, stock buybacks and executive overpay, rather than borrowing from financial institutions or getting money from your government. »

Trump singled out tech company Raytheon as the worst offender, in his eyes.

“I have been informed by the War Department that the defense contractor, Raytheon, has been the least responsive to the needs of the War Department, the slowest to increase its volume and the most aggressive spending on its shareholders rather than the needs and demands of the United States military,” Trump wrote in a follow-up statement. job.

The president threatened to sever government ties with Raytheon, now known as RTX, which is winning billion of its work under defense contract.

Last August, the Ministry of Defense awarded the company $50 billion – the maximum possible – for a 20-year contract to provide the military with equipment, services and repairs.

“Our country comes FIRST, and they’re going to have to learn that the hard way,” Trump warned.

Defense spending fuels a significant portion of the U.S. economy: in 2024, Department of Defense spending represented approximately 2.7% of U.S. gross domestic product (GDP).

Normally, the total defense budget is around $1 trillion. But in an article published Wednesday evening on Truth Social, Trump announced that he would ask congressional Republicans to increase that amount to a record $1.5 trillion for the 2027 fiscal year.

“This will allow us to build the dream military that we have long been entitled to and, more importantly, that will keep us safe, no matter the enemy,” Trump said. wrote.

Yet Trump’s threats have sent defense contractor stocks tumbling amid uncertainty about the future of the high-stakes sector.

Since taking office for a second term, Trump has taken an aggressive and hands-on approach toward private companies linked to national security concerns.

In June, for example, the Trump administration received a “share of gold” in the metallurgical company US Steel, in exchange for give the green light to its merger with the Japanese Nippon Steel. This share allows the Trump administration to essentially have a veto over any major action US Steel might take to reorganize or dissolve itself.

Then, in August, technology company Intel reached a deal to sell the U.S. government a 10 percent stake in his company, in the middle pressure of Trump.

The Trump administration has continued to take stakes in other private companies, including mining companies involved in the production of rare earths and other raw materials used in technology.

It’s not yet clear how Trump plans to enforce his demands on the defense contractors he lambasted in Wednesday’s social media posts. It’s also unclear whether Trump can legally enforce his orders.

But Trump aired a list of grievances against the companies, including that their executives’ salaries were simply too high.

“Defense industry executive salaries are exorbitant and unjustifiable given the slow pace at which these companies deliver vital equipment to our military and allies,” he wrote at one point.

In another, he called on private companies to invest in new construction projects, a request he has made across all sectors since pharmaceutical sector has car manufacturers.

“Starting now, these leaders must build NEW and MODERN production plants, both to deliver and maintain this important equipment, and to build the latest models of military equipment of the future,” Trump said.

“Until they do, no executive should be allowed to earn more than $5 million, which, as high as that sounds, is only a fraction of what they currently earn. »

He also lamented that defense companies were “far too slow” in offering repairs for their equipment.

Defense contractors are responsible for a range of services and products, from software and training to missiles and tanks. RTX, for example, designed the Patriot missile, the United States’ flagship surface-to-air missile system, and supplies the U.S. military with spare parts and other upgrades.

Based in Virginia, the company has revenues exceeding $80 billion in 2024. Just this week, the U.S. Federal Aviation Administration (FAA) awarded RTX a $438 million contract to upgrade its radar system.

Yet Trump argued that too much of that revenue went to shareholders, executive compensation and stock buybacks, in which a company buys its own shares in order to limit their supply and increase their value.

“Defense contractors are currently paying massive dividends to their shareholders and massive stock buybacks, at the expense and detriment of investments in plants and equipment,” Trump wrote.

“This situation will no longer be permitted or tolerated!