The Pentagon has asked defense contractors to double or quadruple production rates, fearing that low U.S. stockpiles would be insufficient for a potential future conflict with China.
People familiar with the matter say the Pentagon has asked the defense contractors to massively scale production, focusing on a dozen critical weapons, according to a report in The Wall Street Journal, which led to a bump in U.S. defense stocks. However, experts cited in the report warn that the U.S. government will need to raise more funds and sign more contracts to meet their expectations, which some believe are unrealistic.
The move comes as Chinese President Xi Jinping pushes forward with his efforts to modernize his military and overpower the U.S., the largest military in the world, greenlighting construction of the potentially largest military command center in the world, while purchasing advanced weapons and technology from Russia that experts fear signal its intentions to invade Taiwan immediately.
Xi has made clear his intentions to form a "world-class" military by 2050, while ordering his army to prepare for an invasion of Taiwan as soon as 2027, U.S. officials believe.
Among the weapons the Pentagon instructed the defense contractors to create include Patriot interceptors, Long Range Anti-Ship Missiles, the Standard Missile-6 and Precision Strike Missiles, according to the WSJ report.
To meet the demands, defense contractors have begun expanding their facilities, with Boeing recently finishing a 35,000-square-foot factory to manufacture Patriot missiles, while Northrop Grumman invested more than $1 billion to boost rocket motor output.
After the WSJ report was published over the weekend, several U.S. defense stocks received a considerable bump.
RTX rose 2.5 percent, Lockheed Martin went up 2.3 percent, Boeing went up 1.6 percent % and L3 Harris went up 1 percent, andNorthrop Grumman got a 0.9 percent bump in premarket trading.