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Navy Secretary Blasts Defense Industry's Stock Buybacks

February 16, 2024

Patrick Turner

Defense One

Secretary of the Navy Carlos Del Toro visits with the crew of Arleigh Burke-class Guided Missile Destroyer USS John Paul Jones, Feb. 13, 2024. U.S. NAVY / PETTY OFFICER 2ND CLASS JARED MANCUSO

By Patrick Turner, Defense One / February 15, 2024

Defense contractors are too focused on stock buybacks and other gimmicks that line their pockets and not enough on investing in shipyards or shoring up the defense industrial base, Navy Secretary Carlos del Toro said Thursday. 

“Overall, many of you are making record profits—as evidenced by your quarterly financial statements,” Del Toro told the crowd at the AFCEA West conference here. “You can't be asking for the American taxpayer to make greater public investments while you continue to goose your stock prices through stock buybacks, deferring promised capital investments, and other accounting maneuvers.”

He said such antics give the impression that certain contractors are seeking to “prioritize stock prices that drive executive compensation rather than making the needed fundamental investments in the industrial base at a time when our nation needs us to be ‘all ahead flank’. We need to work together, government and industry, to develop the shipbuilding industrial base. You need to deliver ships, aircraft, and submarines on time and on budget. And you need to innovate.”

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