The Trump administration is weighing possible stakes in defense companies and others it does business with, U.S. Commerce Secretary Howard Lutnick said on Tuesday in defending President Donald Trump's push for a greater federal government role in American businesses.
"They're thinking about it," Lutnick told CNBC, citing Pentagon leaders, when asked if the administration was considering taking pieces of contractors such as Lockheed Martin Corp(LMT.N), Boeing Co (BA.N) or Palantir Technologies Inc (PLTR.O). "There's a lot of talking that needs to be had about how do we finance our munitions acquisitions."
"There's a monstrous discussion about defense. Lockheed Martin makes 97% of their revenue from the U.S. government. They are basically an arm of the U.S. government," he added.
Boeing declined to comment, and representatives from Lockheed and Palantir did not immediately respond to a request for comment.
Following Lutnick's comments, shares of Lockheed were up 1.1%, while Boeing was up about 0.7% and Palantir was down about 1%.
On Monday, Trump said he wants to make more U.S. government investments in healthy American companies even as critics warn that such a role for the government could limit corporate strategy and market agility and questions are raised about the impact on consumers.
The Trump administration last week announced a near-10% stake in chipmaker Intel (INTC.O). It previously intervened to complete the purchase of U.S. Steel by Japan's Nippon Steel in June, taking what Trump called a "golden share" that gives Washington say over its operations.
It also took a stake in rare earths company MP Materials (MP.N), and brokered a deal with chipmakers Nvidia (NVDA.O) and AMD to take 15% of revenue from sales to China of chips that had previously been prohibited.
The unusual level of federal government intervention in the economy has created unexpected alliances, with liberal U.S. Senator Bernie Sanders backing the stake in Intel.
Lutnick on Tuesday said companies that need federal assistance should be prepared to deal with Trump.
"If a company comes to the United States of America government and says: we need your help, we want to change everything... I think that's a question between the CEO and the president of the United States of whether he will listen to them and change the rules," he told CNBC, citing the Nvidia deal.
"If we are adding fundamental value to your business, I think it's fair for Donald Trump to think about the American people," Lutnick added.
