Donald Trump announced decisive action against the largest American arms companies. As he claims, companies in this sector will not be able to pay dividends or high salaries for management until they solve problems with delays in the production and servicing of weapons. Trump also demands investment in new production plants.
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“I will no longer tolerate a situation in which defense equipment suppliers are currently paying huge dividends to their shareholders and making massive share buybacks, instead of investing in plants and equipment,” the president wrote on his social media site.
The president pointed out that the current pace of production of military equipment is insufficient and servicing of the manufactured machines is too slow.
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Will Donald Trump cut executives' salaries? “Maximum $5 million.”
“From now on, management must build new and modern production plants, both to supply and service this important equipment, and to produce the latest models of future weapons,” the president emphasized. He also added that no director should earn more than $5 million. annually until these conditions are met.
Trump also announced a ban on share buybacks and dividend payments by defense companies until the required changes are implemented. However, he did not provide details on how these restrictions would be enforced against listed companies. Arms companies remain private companies in which the US government has no shares, although in the past Trump suggested the possibility of taking over some of the shares of the largest players, such as Lockheed Martin. However, the income of these companies depends largely on government orders.
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The US president goes to war with arms companies?
This is yet another recent criticism of the defense sector by the Trump administration. A day earlier, during a meeting with Republican congressmen, the president drew attention to large production backlogs and long order fulfillment times, which affect both the American military and foreign customers. In this context, he mentioned, among others: Apache helicopters produced by Boeing and complaints from Indian authorities about delivery delays.
In November, Secretary of the Army Dan Driscoll accused defense companies of offering the Pentagon overly expensive equipment. He also announced that the army will also look for parts and components from civilian suppliers and smaller defense entities.
