Planet Earth is as dangerous place as it’s been since World War II, with hostile powers convinced that the Pax America is ending, thereby opening the door for all kinds of mischief. China’s saber-rattling about taking over the world, the Russian invasion of Ukraine, Turkey’s desire to rebuild the Ottoman Empire, the Iran’s attacks on, well, everyone.
The way to prevent wide-scale conflict is for America to maintain its military superiority – particularly air dominance. It’s not 2005: defense contractors can’t continue gorging themselves at the trough just because they can. We need them to actually defend us.
So Americans of all political stripes can appreciate that President Trump has taken defense contractors to the woodshed after 20 years of War on Terror-era excesses. In January, he issued an executive order titled, “Prioritizing the Warfighter in Defense Contracting,” which rebukes contractors who profiteer off the business-as-usual contracting environment. The EO forbids such contractors from paying dividends or buying back stock when they fall short of their contracted goals.
With refreshingly pragmatic language, the President said:
“Although some contractors have made critical investments in increased production capacity and been responsive to our Nation’s vital interests, far more have not. 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.”
In early March, the White House met with executives of Lockheed Martin, Raytheon parent RTX, BAE Systems, Boeing, Honeywell Aerospace, L3Harris and Northrop Grumman to make sure they understood how serious the President is. This is (yet) another reason why Trump’s business background makes him such an effective President. Attacking these underperforming contractors’ financials is something their shareholders can’t ignore.
For decades, these mega-contractors – whose only real client is Uncle Sam – have dictated terms; now Uncle Sam is dictating terms to them.
And most in the defense industry seem to have received the message loud and clear: they need to play ball or they’ll be kicked off the field. RTX and Lockheed Martin halted their share buybacks, while Boeing hasn’t participated in share buybacks or issued a dividend since 2020.
But one contractor is openly defying the President’s EO: Northrup Grumman. On May 19, the Falls Church, Virginia-based company increased its quarterly dividend nearly 7%. This hike came after their dividend was juiced 12% in 2025. All this is despite the fact that as of June 19, their stock (NOC) is down about one-third from its peak this year and well below its average historical yield.
Northrup CEO Kathy Warden has shown she doesn’t care about the President’s EO. One of the highest-paid defense executives in the world, Warden makes about $24 million per year, with taxpayers footing the bill for 87% of the company’s revenue.
Northrup doesn’t care how it treats America, but America should certainly care how Northrup is treating us. Northrup is now delivering F-35s without radar. The company’s terrible performance is compounding problems with Lockheed F-35, making the $2 trillion defense program even more expensive! With that price tag, you’d think we’d have fighters that could fly to the moon!
And instead of delivering radars for the F-35, Northrop is throwing money away on lavish advertising programs. Most defense contractors restrict their advertising to those highly-targeted posters about “littoral dominance” or what have you in metro stations near the Pentagon, because their only customers are the government employees who walk past them every day. But Northrup ran a full-court press ad campaign to persuade the American taxpayer not to shake the boat. The company ran an ad during the U.S. vs Belgium World Cup game, which alone would have cost more than $1 million.
Everyone agrees this can’t go on. In June, a bipartisan majority on the Senate Armed Services Committee approved legislation that would make the EO law. Maybe Northrup is trying to sneak some dividends pass the goalie before this becomes law. Either way, shame on them. They have failed to gives us a next-gen fighter that works, they have exploited the taxpayers, and they have defied the President’s explicit policies. With the world as dangerous a place as it is, this cannot continue.
Jared Whitley is a longtime DC politico, having worked in the US Senate, White House, and defense industry.
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