GM Discusses General-Purpose Weapon Parts Supply Agreement with Lockheed Martin

The Wall Street Journal (WSJ) reported on the 15th (local time) that American automaker General Motors (GM) is discussing a contract to supply 'general-purpose weapon parts' to Lockheed Martin.

According to reports, GM is discussing supplying 'general purpose parts' to Lockheed Martin to help strengthen its weapons production capabilities.

Which parts will be supplied is still being discussed and a final agreement has not been reached. Negotiations between the two sides have been ongoing since the beginning of the year.

Lockheed Martin is a key U.S. defense company that supplies F-35 fighter jets, THAAD missiles, and Black Hawk helicopters. We are trying to increase the production of weapons, including air defense interceptor missiles, but are experiencing difficulties due to extensive supply chain bottlenecks.

The U.S. Department of Defense is urging traditional defense companies to accelerate production to replenish the inventory of strike weapons and interceptor missiles exhausted by the U.S. and its allies due to the Middle East conflict, while also requesting production support from general manufacturers such as GM.

GM's CEO Mary Barra, who is seeking to expand her defense business, also met directly with government officials to discuss ways to expand her role in the military industry.

GM re-entered the defense market by establishing ‘GM Defense’, which supplies infantry vehicles, about 10 years ago.

This is in line with the trend of automakers such as Ford, Volkswagen, and Mercedes-Benz considering entering the defense industry.

The defense industry is emerging as a new source of profit for automakers whose idle production lines have increased due to sluggish sales.

Volkswagen discussed producing parts for Israel's Iron Dome system at its German plant, and Mercedes-Benz also announced its intention to switch to defense production in Europe.

Ford CEO Jim Farley also publicly announced that he is discussing military-related projects with the U.S. government.

The Trump administration's recent request for a defense budget is $1.5 trillion (approximately 2280 trillion won), the largest in modern history. A significant amount of this amount will be invested in expanding ammunition and drone production.

However, the production of high-performance ammunition, unlike manufacturing vehicle parts, requires complex processes and military contract procedures, and the possibility of a backlash from investors who are reluctant to switch to the defense industry remains a variable, the WSJ reported.