By Mike Stone
Jan 13 – The U.S. government will invest $1 billion in L3Harris Technologies’ rocket motor business, guaranteeing a steady supply of the much-needed motors used in a wide range of missiles such as Tomahawks and Patriot interceptors.
The deal represents the latest U.S. government investment in Corporate America, which has included a 10% stake in chip maker Intel and investments in critical mineral producers. It comes just a few days after President Donald Trump blasted defense contractors for slow production of weaponry.
L3Harris said on Tuesday it will spin off its rocket motor business into a new publicly traded company backed by a $1 billion government convertible security investment. The securities will automatically convert to common equity when the company goes public later in 2026.
The investment in a defense contractor is not a total surprise after U.S. Commerce Secretary Howard Lutnick last August said the Trump administration was weighing equity stakes in major defense contractors, including Lockheed Martin .
The investment in Intel has been a boon for the company, whose shares have more than doubled since the announcement. But the government’s equity position in L3Harris could face blowback from L3Harris’ rivals given it creates a potentially significant conflict of interest for the U.S. government. The Pentagon will have an ownership stake in a company that regularly bids on major defense and other government contracts.
The investment marks the first direct-to-supplier partnership of this kind and is an outcome of the department’s new Acquisition Transformation Strategy and its
Pentagon to Invest $1 Billion in L3Harris Rocket Motor Business
