Hegseth States Lockheed Likely to Benefit Significantly Following Trump’s Warning to RTX

Defense Secretary Advocates for Industry Reform at Lockheed Martin Visit

Photographer: Aaron Schwartz/CNP/Bloomberg

During a recent tour of Lockheed Martin's F-35 manufacturing plant, Defense Secretary Pete Hegseth adopted a collaborative approach, marking a shift from President Trump's earlier criticism of defense contractors for prioritizing shareholder returns over innovation and reinvestment.

Hegseth emphasized the administration's commitment to fostering competition among defense suppliers of all sizes. He noted that companies delivering advanced systems on time and within budget would be rewarded with continued opportunities.

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“I’m confident Lockheed will rise to the challenge,” Hegseth remarked in Fort Worth, Texas. “Given Lockheed Martin’s capabilities, I expect you’ll win many contracts—your platforms are truly exceptional. Our responsibility is to create an environment where you can thrive and innovate rapidly.”

Hegseth’s visit to Fort Worth, along with his scheduled appearance at SpaceX’s Starbase in Brownsville with Elon Musk, is part of a broader initiative to overhaul federal defense procurement. The Pentagon aims to accelerate the deployment of new technologies and weaponry, while also inviting non-traditional tech companies to participate in defense contracts.

“The Pentagon excels at paperwork and bureaucracy,” Hegseth said at the F-35 facility, which produces the world’s most extensive weapons program. He stressed his mission is to “completely transform our business practices.”

This reform effort aligns with President Trump’s recent call for a $500 billion increase in defense funding, coupled with a warning that some established contractors, such as RTX Corp.—the producer of the Patriot missile—could lose out if they fail to adapt.

According to Jefferies analysts, leading defense firms including Lockheed, RTX, Northrop Grumman, and General Dynamics collectively spent nearly $50 billion on dividends and stock buybacks in 2023 and 2024, surpassing the $39 billion invested in research, development, and capital improvements during the same period.

“Move quickly, embrace risk, and invest heavily upfront,” Hegseth urged Lockheed employees, criticizing the “overgrown bureaucracy” that he has frequently targeted since Trump’s first year in office.

Building the ‘Arsenal of Freedom’

In previous speeches at Huntington Ingalls Industries in Virginia and Rocketlab in California, Hegseth has both praised defense workers and outlined new Pentagon policies designed to strengthen what he calls America’s “Arsenal of Freedom.”

This term refers to his comprehensive strategy to accelerate the rollout of advanced military systems and encourage innovative tech firms to enter the defense sector.

Hegseth advocates moving away from annual contract cycles, which have discouraged suppliers from expanding production capacity. He argues that this outdated approach has left the U.S. unable to ramp up manufacturing quickly—a weakness highlighted by the conflict in Ukraine and escalating tensions with China.

The Pentagon also plans to collaborate with key vendors to establish long-term subcontracts, aiming to prevent supply chain bottlenecks that could hinder rapid production increases.

Reporting assistance by Sana Pashankar.

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