 "US President Donald Trump. AFP File")
Commerce Secretary Howard Lutnick has said that senior Pentagon officials are actively weighing whether the US government should acquire equity stakes in major defence contractors, including Lockheed Martin.
According to a CNBC report, Lutnick disclosed that the defence department is “thinking about” the move as part of a broader strategy to strengthen the US defence industrial base.
His comments come just days after the federal government took a 10% stake in Intel through a deal worth approximately $9 billion.
When asked whether the Trump administration would pursue similar equity arrangements with other firms that have significant government contracts, Lutnick said, “Oh there’s a monstrous discussion about defence.”
Lutnick said Lockheed Martin, which earns the majority of its revenue from federal contracts, is “basically an arm of the US government.”
“But what’s the economics of that? I’m going to leave that to my Secretary of Defence and the Deputy Secretary of Defence,” he added, deferring details on potential financial implications.
“These guys are on it and they’re thinking about it,” Lutnick said, referring to top Pentagon officials exploring the idea of acquiring equity stakes in major defence contractors.
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View AllLutnick added that President Donald Trump is rethinking how the US ought to finance its munitions and other defence capabilities.
“I tell you, the way it has been done has been a giveaway,” Lutnick claimed.
His remark could suggest that the Trump administration is considering a major overhaul of Pentagon appropriations, which are approved annually by Congress.
A Lockheed spokesperson told CNBC in a statement, “As we did in his first term, we are continuing our strong working relationship with President Trump and his Administration to strengthen our national defence."
Lockheed Martin is the world’s top defence contractor by revenue, according to DefenseNews’ 2024 list, followed by other major US firms including RTX, Northrop Grumman, General Dynamics, and Boeing.
Meanwhile, President Donald Trump’s decision to take a 10% stake in chipmaker Intel marks a sharp escalation in his push for greater government influence over the private sector.
“I would make similar deals all day long,” Trump was quoted as saying on Monday.
Lutnick defended the $9 billion agreement, saying it “strengthens US leadership in semiconductors, which will both grow our economy and help secure America’s technological edge.”
However, the move has drawn criticism — including from conservatives — over concerns it undermines free-market principles.
“The most immediate risk is that Intel’s decisions will increasingly be driven by political rather than commercial considerations,” economist Scott Lincicome of the libertarian Cato Institute warned in a Washington Post op-ed.
Sen. Rand Paul (R-Ky.) posted on X: “If socialism is government owning the means of production, wouldn’t the government owning part of Intel be a step toward socialism?”
With inputs from agencies