Trump threatens Raytheon defense contracts over slow pace of production

President Donald Trump threatened to cut federal defense contracts awarded to Raytheon, a major unit of RTX, escalating his pressure campaign on US defense contractors to increase production and reinvest more heavily in manufacturing capacity. 

In a January 7, 2026, post on Truth Social, Trump said Raytheon “has been the least responsive to the needs” of the Department of Defense and warned the company it must quickly change course if it wants to continue doing business with the US government. He accused the company of operating as if “this is the Biden Administration” and said that era of “business as usual” was over. 

The comments marked Trump’s most explicit threat yet in a series of public warnings directed at major defense firms. Earlier the same day, Trump called on defense companies to cap executive compensation, halt dividends and stock buybacks, and redirect cash toward expanding plants, equipment, and production capacity. 

While such public pressure is unusual, especially in its tone, the US government is Raytheon’s customer, and the president has broad authority to shape defense procurement priorities. Through contract awards, delivery schedules, funding direction, and emergency authorities, the administration can apply significant leverage over how and where defense companies invest and produce. 

The remarks come amid growing concern within the US government about the health of the domestic defense industrial base. Pentagon officials and lawmakers have repeatedly warned that US weapons production has failed to keep pace with rising global demand, particularly as stockpiles have been drawn down by support for Ukraine, Israel, and other allies. 

Raytheon is one of the US military’s most important missile suppliers. The company produces systems including Stinger surface-to-air missiles, Tomahawk cruise missiles, and Coyote interceptors used for counter-drone missions. It is also developing the Long-Range Standoff weapon, a nuclear-armed cruise missile intended for deployment on US Air Force B-52 bombers. 

RTX generated $43.5 billion in defense-related revenue in 2024, making it the world’s second-largest defense contractor behind Lockheed Martin.  In his post, Trump also accused Raytheon of prioritizing shareholder returns over defense production, singling out the company’s use of stock buybacks. He said Raytheon had spent “tens of billions of dollars” repurchasing shares instead of investing in plants, equipment, and higher production capacity, and warned that further government business would be conditioned on a shift in capital allocation. 

Trump said Raytheon would be barred from conducting additional stock buybacks if it wants to continue receiving US government contracts, framing the issue as a choice between reinvesting in domestic manufacturing or losing access to federal defense work. The warning underscores the administration’s willingness to use procurement authority and contract leverage to pressure defense contractors to accelerate output and redirect cash toward industrial capacity tied directly to US military needs. The post Trump threatens Raytheon defense contracts over slow pace of production appeared first on AeroTime.

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