The United Auto Workers, Teamsters, United Steelworkers and four other major unions are urging Congress to restrict stock buybacks and dividends by defense contractors, wading into a fight over how weapons makers spend billions of dollars in taxpayer revenue.
The unions are backing a provision in the Senate’s defense policy bill that is opposed by the U.S. Chamber of Commerce and other major business groups, pitting organized labor against corporate America over efforts in Congress and the Trump administration to push weapons companies to invest more in arms production. Business groups warn the move would set a precedent for federal overreach into private industry
The fight has scrambled traditional political alliances. Sens. Elizabeth Warren (D-Massachusetts), Josh Hawley (R-Missouri) and Mike Lee (R-Utah) championed the Senate provision, while President Donald Trump has also targeted defense contractor stock buybacks, dividends and executive compensation. In a January executive order, Trump directed the Pentagon to restrict those payments at contractors deemed to be underperforming or making weapons too slowly.
The provision would bar the Pentagon from awarding contracts to companies that repurchase shares, pay dividends or make other capital distributions, unless the defense secretary grants a waiver tied to a qualifying defense investment plan.
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In a letter sent this week to leaders of the House and Senate Armed Services committees, the unions urged lawmakers to preserve Section 815 of the Senate’s 2027 National Defense Authorization Act as the chambers negotiate a final version of the bill. The unions say they represent millions of workers, including those at major defense contractors and their suppliers.
The unions argue the industry is shortchanging workers on pay while rewarding shareholders with billions in stock buybacks and dividends.
“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,” UAW President Shawn Fain said in a statement.
The unions pointed to Trump’s actions as evidence Congress should go further.
Warren, Hawley and Lee have said the five largest defense contractors have spent more than $100 billion on stock buybacks and dividends since 2020 — more than twice what they spent on capital expenditures. The unions said spending on buybacks and dividends by major defense contractors fell 36% after Trump’s executive order, which they say shows the restrictions are workable.
The unions said labor disputes and work stoppages over the past two years at Boeing, Lockheed, General Dynamics, Textron, GE Aerospace and Pratt & Whitney show that the industry’s spending priorities are leaving its workforce behind.
The U.S. Chamber and more than 40 other business and industry groups previously urged lawmakers to strip Section 815 from the Senate bill, warning that the restrictions would discourage companies from doing business with the Pentagon just as the government is trying to attract new suppliers and private investment into the defense industry.
In a July letter to Senate Armed Services Committee leaders, the groups argued that stock buybacks and dividends benefit millions of Americans who hold shares directly or through retirement accounts. They also warned that the restrictions could hurt employees whose stock ownership plans rely on dividend payments, and they disputed the idea that companies are sacrificing investment in production to reward shareholders.
The business groups also warned that the restrictions would give Washington unprecedented influence over corporate financial decisions, setting a precedent that could extend well beyond the defense industry.
“By prohibiting dividends, share repurchases, and other capital distributions absent a government waiver, Section 815 would shift responsibility for ordinary capital allocation decisions from corporate leadership to Washington,” the groups wrote.
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