Pentagon ‘thinking about’ taking stakes in defense contractors: Lutnick
Commerce Secretary Howard Lutnick said Tuesday the Trump administration is “thinking about” taking stakes in defense contractors, potentially replicating its divisive move to purchase part of chip maker Intel.
“Why shouldn’t the U.S. government say, ‘You know what? We use Palantir services, we would like a piece of Palantir. We use Boeing services, we would like a piece of Boeing,’” CNBC’s Andrew Ross Sorkin asked Lutnick on “Squawk Box.”
“There are a lot of businesses that do business with the U.S. government, that benefit by doing business with the U.S. government. Where, again, I guess the question is, where’s the line?” Sorkin continued.
“Oh, there’s a monstrous discussion about defense,” Lutnick replied. “I mean, Lockheed Martin makes 97 percent of their revenue from the U.S. government. They are basically an arm of the U.S. government. They make exquisite munitions, I mean, amazing things that can knock a missile out of the air when it’s coming towards you.”
“But what’s the economics of that? I’m going to leave that to my secretary of Defense and the deputy secretary of Defense. These guys are on it, and they’re thinking about it,” he added.
Last Friday, President Trump said that Intel had agreed to sell the U.S. government a 10 percent stake in the tech giant.
“They’ve agreed to do it, and I think it’s a great deal for them,” the president said to reporters.
The president later said on social media that it was his “Great Honor to report that the United States of America now fully owns and controls 10% of INTEL, a Great American Company that has an even more incredible future.”
“I negotiated this Deal with Lip-Bu Tan, the Highly Respected Chief Executive Officer of the Company,” Trump added.
Earlier this month, Trump had called for the CEO to resign, before they met for a “candid and constructive discussion” in the White House.
In a statement to The Hill on Tuesday, a spokesperson for Lockheed Martin said it is “continuing our strong working relationship with President Trump and his Administration to strengthen our national defense.”
Some Republicans have expressed discomfort with the Intel deal and the general idea of public ownership in private companies.
Sen. Rand Paul (R-Ky.) called it a “terrible idea.”
“If socialism is government owning the means of production, wouldn’t the government owning part of Intel be step toward socialism?” he posted on social media.