Raytheon may not be a top U.S. defense contractor in the near future.
President Donald Trump accused Raytheon of deprioritizing the U.S. military in favor of its shareholders in a Truth Social post this week.
“Raytheon seems to think this is the Biden Administration, and this is ‘business as usual,’” said Trump. “Either Raytheon steps up, and starts investing in more upfront investment[s] like Plants and Equipment, or they will no longer be doing business with [the] Department of War.”
Trump didn’t limit his demands to increased and expedited production. The president ordered Raytheon to cease stock buybacks, or else they would lose out on all future government business.
“Our country comes first, and they’re going to have to learn that, the hard way!” said Trump.
The president paired these remarks with an executive order, “Prioritizing the Warfighter in Defense Contracting,” directing Secretary of War Pete Hegseth to create a list within 30 days of those defense contractors for critical weapons, supplies, and equipment that are underperforming on their contracts, not investing their own capital into necessary production capacity, or insufficiently prioritizing federal contracts.
“After years of misplaced priorities, traditional defense contractors have been incentivized to prioritize investor returns over the Nation’s warfighters,” read the executive order. “Many large contractors — while underperforming on existing contracts — pursue newer, more lucrative contracts, stock buy-backs, and excessive dividends to shareholders at the cost of production capacity, innovation, and on-time delivery.”
Hegseth will also give notice to the identified contractors and work with them to resolve the identified issues, potentially through remediation plans. Should those problematic contractors fail to provide a sufficient remediation plan or fail to resolve the dispute on contract performance otherwise, Trump directed Hegseth to initiate enforcement actions through the Defense Production Act or Federal Acquisition Regulations and Defense Federal Acquisition Regulations Supplement.
The executive order also gave Hegseth 60 days to ensure that future contracts with new or existing defense contractors contain a provision prohibiting stock buyback and corporate distributions by the contractor during a period of underperformance, contract noncompliance, insufficient contract prioritization, insufficient investment, or insufficient production speech.
One of Raytheon’s five major business divisions, Missile Systems, is based in Tucson.
The other four are spread throughout the country: Integrated Defense Systems in Massachusetts; Intelligence, Information, And Services in Virginia; and both Forcepoint along with Space And Airborne Systems in Texas.
Earlier this year, the Department of Defense awarded a $50 billion contract to RTX Corporation. Raytheon exists as a unit within RTX Corporation, a merger between Raytheon Technologies and United Technologies.
Last month, Raytheon’s Tucson division received a $384 million incentive modification to a contract for Block V Tomahawk missiles for Navy, Army, Marine Corps, and two foreign military customers.
Per SAM data, the federal government awarded Raytheon over $127.6 billion in contracts from January to December 2025.
Also on Wednesday, Trump announced an increase to the military budget from $1 trillion to $1.5 trillion in order to build the “dream military,” citing tariffs from other countries.
"I have determined that, for the Good of our Country, especially in these very troubled and dangerous times, our Military Budget for the year 2027 should not be $1 Trillion Dollars, but rather $1.5 Trillion Dollars…" – President Donald J. Trump pic.twitter.com/v7SxF7W8r7
— The White House (@WhiteHouse) January 7, 2026
Unlike Raytheon, Lockheed Martin responded to Trump’s directive on aligning production with contracted expectations.
“Lockheed Martin shares President Trump’s and the Department of War’s focus on speed, accountability, and results, and will continue to invest and innovate at scale to ensure our warfighters maintain a decisive advantage and are never sent into a fair fight,” said the company in a statement.
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