Howard Lutnick: DOD Considers Taking Stakes in Contractors

Commerce Secretary Howard Lutnick said top Department of Defense officials are “thinking about” whether the U.S. should take equity stakes in defense contractors like Lockheed Martin, CNBC reported Tuesday.

In an interview on CNBC’s Squawk Box, Lutnick said Lockheed is “basically an arm of the U.S. government.”

“But what’s the economics of that? I’m going to leave that to my secretary of Defense and the deputy secretary of Defense,” the head of the Department of Commerce stated. “These guys are on it and they’re thinking about it.”

In a statement to CNBC, a spokesperson for Lockheed said, “As we did in his first term, we are continuing our strong working relationship with President Trump and his Administration to strengthen our national defense.”

US Government to Acquire 9.9% Stake in Intel

Lutnick’s remarks came days after the U.S. government agreed to acquire a 9.9 percent stake in Intel through an $8.9 billion investment in the technology company’s common stock to help achieve U.S. technology leadership and expand the domestic semiconductor industry.

The U.S. government will buy 433.3 million shares of Intel common stock at $20.47 per share. The ownership will be passive with no board representation, other governance or information rights.

The equity stake will be funded by $5.7 billion in remaining CHIPS and Science Act grants and $3.2 billion awarded to the company under the Secure Enclave program.

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