WASHINGTON — Secretary of Defense Pete Hegseth used a stop at Rocket Lab’s Long Beach, California, facility on Jan. 9 to sharpen the Trump administration’s message to the defense industry: invest in production and people, or risk falling behind.
The visit, part of Hegseth’s “Arsenal of Freedom” tour, was framed as a contrast with major defense contractors the administration has criticized for prioritizing dividends and stock buybacks over manufacturing capacity and delivery speed. Rocket Lab, a commercial launch and satellite manufacturer with growing military and intelligence work, was held up as an example of the model the Pentagon wants to reward.
“Rocket Lab represents the kind of rapid, scalable production the Pentagon wants to see more of,” Hegseth said. The message, repeated throughout his speech, was that companies expanding capacity and moving quickly will find a more receptive Pentagon.
For a space industry audience, Hegseth’s most pointed remarks focused on the role of space technology in future conflicts. The United States, he said, is “deadly serious about commanding the ultimate high ground of space.” That means fielding “modern and more capable” constellations of American satellites, launched by American rockets from American soil and built by American engineers and workers.
Hegseth tied those capabilities to recent military operations, alluding to the Jan. 3 U.S. mission in Venezuela that targeted sites in and around Caracas and resulted in the capture of President Nicolás Maduro and his wife. The operation, described by U.S. officials as part of a campaign against drug trafficking and sanctioned oil exports, involved airstrikes and a rapid assault by elite forces.
“On that mission in Venezuela, there’s a lot of things we can’t talk about … but a lot of the things we can’t talk about were enabled by capabilities like companies like this, that provide decisive advantages for the United States of America,” Hegseth said. These include “the signals you provide that save a soldier’s life, the intel that guides a precision strike that saves a soldier’s life.”
Addressing Rocket Lab employees, Hegseth said, “You are the engine of the new arsenal of freedom,” calling the company’s work “the exact opposite of what you would receive from paper pushing bureaucrats in the Pentagon and legacy prime contractors. It’s no wonder why your Electron rocket has been such a success.”
Several of Hegseth’s sharpest lines — particularly his jabs at Washington bureaucracy and his criticism of legacy prime contractors — drew audible cheers and applause from the workers gathered at the factory.
While praising Rocket Lab, Hegseth argued he was not picking winners or favoring specific companies, adding that the Pentagon wants competition “based on cost, it’s based on capability, it’s based on scaling, it’s based on flexibility, open architecture, innovation.” Those that meet those criteria, he said, “will be the companies that win … because the field is wide open.”
He echoed complaints from newer commercial entrants about barriers to entry in the defense market. “Washington plays games with lobbyists and accountants and bureaucrats. It plays games to block out new contestants, new competitors,” Hegseth said, while insisting he has “nothing against prime contractors” and wants them to keep delivering ships, fighters, tankers and submarines. The expectation, he added, is that they compete on speed and cost. Too often, he said, “we’re waiting for exquisite systems that are incredible, but I’m going to get it in 2033 when the fight is over. We need them today. We need them tomorrow. We need speed. We need urgency.”
The remarks come as President Donald Trump pushes a broader reset of Pentagon contracting. Hegseth cited Jan. 7 White House executive order, “Prioritizing the Warfighter in Defense Contracting,” which reflects Trump’s long-standing criticism that major defense firms have favored shareholder returns over timely delivery of weapons and systems. The order directs the Pentagon to scrutinize contractor performance and capital investment more closely and to use its contracting authority to discourage buybacks and dividends by firms deemed to be underperforming.
“The days of rewarding the comfortable old guard for failure are finished,” Hegseth said. “We will provide larger, longer and more predictable contracts to companies like this one.” He added that the Pentagon will “reward leaders who choose to invest in their workers, who expand their capacity and who share our sense of urgency,” and will favor production over “stock buyback programs or dividends.”
Hegseth also reiterated Trump’s call for a dramatic increase in defense spending, floating a $1.5 trillion topline for fiscal 2027 — roughly 50 percent higher than the $901 billion Congress approved for 2026. Trump has framed the proposed boost as necessary to build what he calls a “dream military” in what he has described as “very troubled and dangerous times.”
SpaceNews editor Dan Robitzski contributed to this report.
