General Motors is in talks with Lockheed Martin about manufacturing parts for the defense contractor’s weapons, according to people familiar with the matter reported by The Wall Street Journal. Under the proposed arrangement, GM would produce commonly used components that could help Lockheed bolster munitions production, the people said. An agreement has not been finalized and the contours could change.
The talks, which have been underway since early this year, reflect GM’s broader push to grow its defense business and tap new revenue streams. The automaker formally re-entered the defense business nearly a decade ago with the launch of its GM Defense subsidiary, which initially focused primarily on securing contracts for infantry vehicles. The latest discussions aim to expand the unit’s role.
Globally, the auto industry is producing and selling fewer cars than it has in decades past, leaving factory space idle. GM Chief Executive Mary Barra has met with Trump administration officials to discuss a larger military role for the automaker, the Journal reported.
Stocks of missiles and other critical weaponry have dropped because of the wars in Ukraine and Iran. Pentagon officials have said they might need companies to backstop traditional defense contractors that are struggling to meet demand for strike weapons and interceptors that the U.S. and its allies have used heavily in the Middle East this year.
Lockheed Martin, one of the world’s largest defense contractors, supplies the U.S. and its allies with F-35 jet fighters, Thaad missiles and Black Hawk helicopters. The company has agreed to increase production of munitions such as air-defense interceptors but has faced supply-chain bottlenecks within its sprawling supplier base.
High-end munitions production is more complex than commercial auto manufacturing, and there is limited overlap between items produced by the automotive-parts supply chain and the weapons components in shortest supply, the Journal noted.
Other automakers have also explored defense production. Volkswagen has discussed making components for Israel’s Iron Dome system at a German factory, the Journal has previously reported. Last month, the CEO of Mercedes-Benz told the Journal that the automaker might be willing to move into defense production in Europe.
Ford CEO Jim Farley has said his company is in talks with the U.S. government about military-related projects. Those discussions have centered on supplying vehicles, not munitions, according to a person familiar with the discussions.
The Trump administration’s recent request for a $1.5 trillion defense budget, which would be the Defense Department’s largest in modern history, calls for tens of billions of dollars of new investment in munitions and drone manufacturing.