The US Secretary of Defense Piet Hegseth warned major defense contractors, among others, on Friday Lockheed Martin Corp. (NYSE:LMT), RTX Corp. (NYSE:RTX), Northrop Grumman Corp. (NYSE:NOC), Boeing Co. (NYSE:BA) and General Dynamics Corp. (NYSE:GD), that they must accelerate the development and production of weapons or they risk becoming obsolete.
New ‘Deal Team’ to Reshape Pentagon Procurement
Speaking at the National War College in Washington, Hegseth announced the creation of a specialized ‘deal team’ within the new Wartime Production Unit. According to a tweet from the Ministry of War, the initiative aims to transform production capacity through innovative business agreements.
“This great defense [groups] We need to change the focus on speed and volume and invest their own capital to achieve that. If they don’t, those big ones will disappear,” the Pentagon chief told industry executives.
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Reduce regulations to stimulate competition
The Pentagon plans to relax contract requirements, reporting standards, testing rules and oversight rules.
Hegseth described the department’s bureaucracy as an “adversary,” echoing the former defense secretary Donald Rumsfeld.
Jerry McGinndirector of the Center for Strategic and International Studies (CSIS), said Hegseth was “right to focus on changing incentives,” noting that current regulations have gone too far.
Foreign military sales accelerated
Hegseth called it a “top priority” to assist the president Donald Trump in securing U.S. hardware deals, and he pledged to expedite U.S. arms sales to allies. According to the secretary, foreign military sales are “critical to our strategic vision of the global landscape.”
Hegseth, a former National Guard officer, pledged U.S. technological support to help Southeast Asian countries counter Chinese threats during multilateral defense talks in Kuala Lumpur last week.
There are now only five major contractors in the U.S., down from 51 in 1990, due to post-Cold War budget cuts.
The reforms will also aim to attract private capital investment and new competitors to challenge existing aviation companies.
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Disclaimer: This content was produced in part using AI tools and was reviewed and published by Benzinga’s editorial staff.
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