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Weapons Makers Angle for a Piece of Trump’s US ‘Iron Dome’

Chris Calio. (Jason Alden/Bloomberg)

(Bloomberg) -- Some of the nation’s largest defense contractors are eying roles in President Donald Trump’s plan to build a more comprehensive missile defense system to protect the US.

Leaders of RTX Corp. and Lockheed Martin Corp. each touted their capabilities Tuesday, a day after the White House called for the development of an “Iron Dome” for America. The system will likely involve several kinds of interceptors and other technologies meant to destroy missiles fired from foreign adversaries, including space-based systems. 

The Trump administration’s push to untangle federal bureaucracy through the so-called Department of Government Efficiency has fueled expectations for greater competition between startups and entrenched defense giants over military contracts. Still, the largest contractors will likely play a significant role in the Iron Dome and other American priorities for military technology development. 

“This is what Raytheon is exceptionally good at doing” Neil Mitchill, RTX’s chief financial officer, said in an interview after its quarterly earnings report. He noted that the company, which was previously known as Raytheon and maintains a business unit with that name, already supplies Israel’s Iron Dome.

“We are fully prepared to support the president’s ambitions,” Mitchill said.

Lockheed beat out rival Northrop Grumman Corp. in April for a $17 billion contract to continue development and eventual production of a new warhead to replace those currently used on US missile interceptors in California and Alaska. That ground-based system is aimed at fending off small numbers of intercontinental ballistic missiles from adversaries such as North Korea, rather than waves of attacks from China or Russia.

Comprehensive Approach

The ground-based interceptors are likely to be just one part of the US Iron Dome, Lockheed Chief Executive Officer Jim Taiclet said on a call Tuesday to discuss the company’s fourth-quarter results. The Trump administration envisions a more comprehensive missile defense strategy that would also include technologies to guard against hypersonic and cruise missiles as well as drone attacks on public places and key US assets, Taiclet said.

The US also already operates the Defense Support Program, with satellites developed by Northrop used to detect missile launches, space launches and nuclear detonations. Satellites with an offensive capability were proposed by the Reagan administration in the 1980s but abandoned over cost and technological impediments.

“We can shoot down cruise missiles with lasers now, and that could be part of the solution,” Taiclet said. Lockheed also has “pretty good technologies” for countering drones and sees opportunities to collaborate with startups and smaller defense contractors, he said. 

“We need to expand our ability as a country to get everybody involved,” he added. “And I welcome DOGE’s effort and the administration’s effort to reduce the bureaucracy, limit the administrative burdens that the Pentagon now puts on all companies — big and small — that want to work with it.”

Lockheed shares fell 9.2% in New York, the biggest decline in more than three years, after the company reported $1.7 billion of losses on classified contracts in its aeronautics and missiles segments. The writedowns have “significantly reduced the risk” of those programs going forward, Taiclet said. 

Earnings Beat

RTX reported fourth-quarter results that surpassed expectations thanks to continuing demand for its military hardware and aircraft maintenance services. Its shares rose 2.6%. 

Adjusted earnings last quarter were $1.54 a share, the company said in a statement. Analysts had predicted $1.39 on average. The Arlington, Virginia-based manufacturer gave a mixed forecast for 2025, projecting sales of no more than $84 billion, short of Wall Street’s estimates.

--With assistance from Anne Cronin.

(Updates with Lockheed comments throughout)

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