Unions urge Congress to halt stock buybacks by defense contractors

Unions in the United States, including the United Auto Workers (UAW) and representatives from six other key labor groups, have jointly petitioned Congress to support a significant provision in the National Defense Authorization Act (NDAA). The proposal would prohibit defense contractors from engaging in stock buybacks and issuing dividends. This initiative arises from concerns that the top five defense contractors have allocated twice as much to shareholder payouts as they have to capital investments since 2020, leaving defense workers at a disadvantage.

UAW President Shawn Fain expressed his concerns, stating, "The working class makes the defense industry run, but instead of investing in our national and economic security, companies like Lockheed Martin, Boeing, Woodward, and dozens more spend taxpayer dollars on Wall Street payoffs to enrich the billionaires." He emphasized, "It’s time we put an end to defense contractors paying off Wall Street while defense workers and taxpayers pay the price."

The unions have reached out to Congress through a letter, urging legislators to "stand with America’s defense workers and seize this opportunity to enshrine" the provision, known as Section 815, into law. This follows an executive order from the Trump administration issued in January. The section seeks to embed legislative efforts spearheaded by Senator Elizabeth Warren (D-MA), Senator Josh Hawley (R-MO), and Senator Mike Lee (R-UT), which aims to halt Wall Street payouts in favor of investing in the industry's infrastructure and personnel.

Highlighting the shifting priorities within the industry, the letter notes, "With the industry’s center of gravity progressively shifting to investor returns, workers too have paid an enormous price." It points out that during negotiations and organizing drives with major defense contractors, persistent claims arise about insufficient resources for ensuring job security and fair pay. This financial strain is cited as a factor in recent labor disputes and work stoppages at companies such as Boeing, Lockheed Martin, General Dynamics, Textron, GE Aerospace, and Pratt & Whitney.

For further details, the press can read the full letter here, which has been signed by the following labor organizations:

• United Auto Workers (UAW)
• United Steelworkers (USW)
• International Federation of Professional and Technical Engineers (IFPTE)
• Communications Workers of America (CWA)
• International Brotherhood of Boilermakers (IBB)
• International Brotherhood of Teamsters (IBT)
• International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART)