Press Briefing Transcript: Under Secretary of War Michael P. Duffey and Lockheed Martin CEO Jim Taiclet Discuss Increasing Critical Munitions and Opening Munitions Production[...]

May 21, 2026

Transcript

Moderator: Good afternoon, and welcome to the Department of War and Lockheed Martin Media Roundtable. This call is being recorded now.

I'll turn the call over to Laura Siebert, Vice President of Communications for Missile and Fire Control, to share brief opening remarks.

Laura Siebert, Vice President of Communications, Lockheed Martin Missiles and Fire Control: Thank you and good afternoon, everyone. Thank you for joining us today.

Following the groundbreaking, our conversation today will focus only on efforts related to our partnership with the Department of War to ramp critical munitions. I'm pleased to be joined by the Honorable Mike Duffey, Under Secretary of War for Acquisition and Sustainment, and Jim Taiclet, Chairman, President and CEO of Lockheed Martin.

Following brief remarks, we will open the line for questions. We will begin with Under Secretary Duffey.

Honorable Michael P. Duffey, Under Secretary of War for Acquisition and Sustainment: Thank you. First, I want to start by thanking Jim and the leadership here at Lockheed Martin.

Our conversations that started less than a year ago led us to this groundbreaking new facility that we're commissioning today. This pivotal moment for the Department of War, the Defense Industrial Base and most importantly, our warfighters.

Today, right here in Troy, Alabama, we are turning strategic talk into concrete action. By putting shovels in the ground from Munitions Production Center Building 47, we are physically building the Arsenal of Freedom. Let me give you the road map of how we got here so quickly.

Last summer, under the leadership of Deputy Secretary Feinberg, we launched the Munitions Acceleration Council. We sat down with the CEOs of our top defense partners for robust daily discussions about one thing: scaling our munitions production capacity.

Then in November, Secretary Hegseth launched his Acquisition Transformation Strategy. The directive from the top was crystal clear: no more business as usual. The sluggish, bureaucratic models of the past were failing our warfighters and had to go.

The core of that strategy was stabilizing our demand signals. For too long, the department relied on single year procurement. That old way of doing business created volatile demand, caused massive delays in procuring long lead items and made companies hesitant to invest their own capital in modernization and talent. We threw that old model out.

In January, I signed framework agreements on PAC-3 and THAAD with Lockheed Martin. The deals represented a fundamental shift in how we do business.

Instead of the government issuing grants to build factories, we simply promised to buy the munitions. In return, the company promised to foot the bill to scale their production facilities.

Give the industry a clear, reliable demand signal and they will deliver. Today is the proof.

Four months after signing that agreement, Lockheed Martin is actively building the infrastructure required to scale.

Because of this partnership, we are actively quadrupling the production of THAAD interceptors and tripling the production of PAC-3. But we aren't stopping at interceptors. We are unleashing American manufacturing to scale across the entire munitions portfolio, including lethal strike capabilities like Tomahawk, Precision Strike Missile and AMRAAM.

We're also going to the key suppliers, securing agreements for PAC-3 and THAAD seekers, ensuring demand signals flow down into the supply chain. These deals ensure those suppliers make investments to scale production.

This is all possible because President Trump, Secretary Hegseth and Deputy Secretary Feinberg have their feet firmly on the gas pedal. We are dictating speed, throwing out outdated business models and securing lethal capabilities to ensure our warfighters never have to face a fair fight. Thank you and I look forward to your questions.

Jim Taiclet, Lockheed Martin Chairman, President and CEO: Thank you, Under Secretary Duffey, and thanks to all of you for joining us today. I'm Jim Taiclet, I'm the CEO and Chairman of Lockheed Martin. And as the Secretary mentioned earlier this year, we joined together to announce the first landmark framework agreement to dramatically accelerate, in this case, the PAC-3 MSE production.

At the same time, we said that the agreement represented a new model for how government and industry could work together with greater speed, accountability and shared commitment to the mission's execution, and I can tell you we heavily embrace that model and eagerly embrace that model.

And since then, at our company, we've continued to build on that momentum with additional framework agreements focused on expanding THAAD and Precision Strike Missile production, as you heard. And all that's driven by a shared understanding between government and industry that the current environment demands faster delivery of these proven capabilities at a large enough scale to make a difference to deter armed conflict.

These agreements demonstrate that Lockheed Martin is ready now to meet the urgent demand for air defense missiles and other critical systems. And we look forward to continuing to partner with the Department of War on future opportunities to accelerate production of a wider range of defense technologies, as well. So, I see there's great alignment again between U.S. government and our company, and many of our colleagues in the industry.

Indeed, the groundbreaking ceremony we participated in this afternoon marks another tangible step forward in this effort. And Building 47 here in Troy, Alabama, is a munitions production center focused on supporting THAAD production and is part of a broader $8 to $9 billion investment that Lockheed Martin is making through 2030 to expand our munitions footprint across the country.

In fact, we've already spent $1.25 billion already into expanding our capacity, and it's just been a few months down the road. This is importantly, this effort reflects the power of a commercially inspired partnership between government and industry.

The Department of War's Acquisition Transformation Strategy is creating the long-term clarity and demand that allows industry to invest aggressively in facilities and workforce development, supply chain expansion and advanced manufacturing capabilities, such as robotics. And this effort extends well beyond Lockheed Martin alone. Just last week, more than 150 suppliers joined us in Dallas for our inaugural Munitions Acceleration Supplier Conference, where government leadership also participated.

And our suppliers heard directly from those leaders and collaborated together on how we collectively can deliver munitions at greater speed and scale. That engagement will continue monthly, because strengthening the industrial base requires alignment and investment across the entire supply chain.

So today, in addition to breaking ground on this new production facility, the Secretary and I also toured our THAAD and JASSM LRASM production lines to see the most modern manufacturing technologies in progress already at this site, and we're just going to add more to it. And while the work happening here in Troy is critically important, its impact reaches well beyond these facilities and well beyond this state.

Around the world today, our U.S. service members and our allies are operating in increasingly complex and dangerous environments, and they need the best equipment possible to do their mission and come home safe. I want to recognize the extraordinary workforce here in Troy, and across our supplier network. Their dedication, innovation and a sense of mission are making these production increases possible. We don't shy away from tripling or quadrupling what we're doing because our workforce, we know, will be there to stand behind us.

Thank you all. And with that, I'll turn it over to Laura.

Laura Siebert: Thank you, Under Secretary Duffey and Mr. Taiclet. With that, we'll open it up for questions.

Moderator: Thank you. As a reminder to ask a question, you will need to press *11 on your telephone. Again, that's *11 on your telephone to ask a question. To remove yourself from the queue, you may press *11 again. Again, that's *11 to ask a question. Please stand by while we compile the Q and A roster. Our first question comes from the line of Mike Stone of Reuters News. Please go ahead, Mike.

Q: Thanks for hosting this day, and got some good, good images of you guys doing that groundbreaking. Can you say how close you are to finalizing the framework agreement? And I've got a follow-up question after that.

Honorable Michael P. Duffey: The framework agreement for THAAD has been signed for quite a while, so I think we're, and that's what's motivating us to move out.

Jim Taiclet: And there's a few additional steps that are in process, Mike, as well. So, what we've done with our government teammates here is we created subcontract HOAs or heads of agreement that will go to our major suppliers and they'll be completing those, most of them are done, not all. When the big, large suppliers complete those agreements, they'll be under the same economic and commercial framework as we are at Lockheed Martin as the OEM for the Patriot and THAAD.

I think that's a really great milestone. It still needs to be completed, and then once that happens, and again, all this is in process in parallel, by the way, it's not serial, it's in parallel. The U.S. government has already awarded us an undefinitized contract award to get started on the plan, and we're working with our subcontractors on that initial, they call it a UCA on undefinitized contract award.

And finally, a few weeks down the road, when Congress approves that, we'll turn those into formal contracts, so there's a few process steps left, but nobody is slowing down, nobody's waiting. We're all investing right now, and we're moving into additional systems as we speak.

Q: Okay, so the formal contracts, which is what I was referring to in my question, can't be, you can't sign those up until you have the appropriations. I'm understanding that now. Is there any change to the cadence of progress payments that is contemplated under the seven-year plan? That's my follow up.

Honorable Michael P. Duffey: I think. So on the, I think that those details are yet to be worked out in the final agreement, but I think the goal here is ensuring that, first of all of the payments are for missiles, right. That's been a clear principle of the deal, is that industry will be paying all of the cash for facilitation, tooling, testing equipment, all the non-recurring costs, and all of the government funding held at a constant rate of current unit cost plus inflation will be for procurement of the missiles.

Jim Taiclet: Yeah, and Mike, just one last addition to what Secretary mentioned, there'll be some smoothing of cash flows that will again only be out of the corpus of budget for actual missiles. But the timing of some of those payments would could be moved around or accelerated in a way that the companies are able to continue to invest as rapidly as we're planning to do. So there may be some timing issues around payments, but I think the real benefit here is that U.S. government, over the course of these seven year agreements for each of these munitions, is going to save low single digit billions of dollars on facilitation and other costs, one-time costs, that they would have paid under the old system.

And industry will then have the ability to do long term orders, get more efficiency that way, create second sources, and there'll be more volume with these munitions to go, so this is a win-win arrangement for everyone. As the secretary said, just a few of the details to be yet worked out in the actual definitive contract, but we're well on our way towards that goal.

Moderator: Thank you. Our next question comes from the line of Drew Fitzgerald of the Wall Street Journal. Please go ahead, Drew.

Q: Yeah, sorry about the noise here. What is the amount of investment in Troy specifically, and will there be any change in workforce shifts or things like that?

Jim Taiclet: So the investment in Troy specifically is going to be in a range of like $900 million to $1.1 billion over the next couple of years. Much of that has already been authorized and contracted for from our suppliers, our tooling suppliers, construction firms, etc. And we've already got back those into on property here, ready to start digging, like really digging, not just ceremoniously digging. So that's about the billion dollar range that will be in Troy for the expansion, we're essentially doubling the existing throughput capacity of this site, which you know in the past has covered all of the THAAD production.

But one important note is with technology and workforce efficiency we'll be able to multiply our production rate of THAAD by 4x here, but not necessarily having to double or even all of our inputs. So we'll be more efficient in the production rates at higher levels, which will help us be able to have really good returns for our shareholders, as well as meet the goals of the government.

Moderator: Thank you. Our next question comes from the line of Tony Capaccio of Bloomberg. Your line is open, Tony.

Q: Hi, thank you for doing this. A couple questions. One quickie: When will the Troy plant be actually operational? And then two, for both, what new software or AI predictive analysis tools will Lockheed be using in tandem with the munitions console and DCMA to track the ramp-up process once the framework agreements have become signed contracts?

Jim Taiclet: I don't have the production schedule in front of me, Tony, but we will get that, and I'll let you know when the completion date is, and the ribbon cutting is expected to be. Hopefully, you'll come.

On large process technology, we've got a digital system that we're putting in, it's called Digital Transformation inside a company, where we're taking the newest versions of ERP from our key suppliers and other core systems for production management and applying them to the construction of the site, as well. So we've got our typical project management tools, which are quite sophisticated in this company, and we back those with AI to actually do predictive scheduling, look for where the delays in the construction supplies might come, just like we do for actual production systems.

Honorable Michael P. Duffey: And on the government side, we've got an aggressive digitization effort underway as part of acquisition transformation. I have no doubt that both DCMA and our program offices will be leveraging our advancements in not just AI, but general digitization to help monitor and track and highlight the success we've got in the production capacity increases.

Laura Siebert: Let's see if we have time for one more question.

Moderator: Excellent. Our next question comes from the line of Valerie Insinna of Breaking Defense. Valerie, your line is open.

Q: Thank you, guys, for doing this. I wanted to follow up on a comment that I believe I heard made during the speech at the groundbreaking. Do you think it leads to some potential discussion for framework agreements outside of the munitions space? I was wondering if you guys can shed some light about what is potentially in the mix there.

I know that there's been some legislation on Capitol Hill that could potentially green light multiyear F-35 buys. Is that something that you guys are working towards, or that you see as potentially valuable?

Jim Taiclet: So, we don't have anything to announce today outside the munitions acceleration plan, but I think the leadership in government and industry, and certainly in the case of our company, feel this is an applicable model for other types of systems. You know, for example, I think we do have a proposal in for radar systems, which again are, you know, built, you know, today under single year contracts, and theoretically they could be contracted multiyears as well.

So this is just a model that we're beginning to build proposals inside our company for, and suggesting what those might be to our government counterparts, but we don't have anything to announce today that's concrete quite yet, Valerie.

Honorable Michael P. Duffey: I'll say from the Department of War side, the criteria that we look for in pursuing additional applications with this speed and volume. We've seen the success of that and are starting to see the fruits of that labor with munitions, and so where there's applicability of a model like this outside that creates the speed and volume that we need to equip the warfighter.

We're very open to considering those opportunities.

Laura Siebert: Great, thank you. And thank you on behalf of the Department of War and Lockheed Martin.

I appreciate all the questions and joining us in the discussion today. We'll provide a transcript afterwards, as well as images and b-roll from today's ceremony. Thank you, and have a good evening.