The U.S. government is in preliminary discussions with Ford Motor (F) and General Motors (GM) about producing weapons and military equipment. The talks are in the early stages, and no deals have been announced. But for investors in both stocks, the question is worth asking: could a defense pivot add real value to these companies?
The answer depends on how seriously each company leans in and whether their underlying businesses are already strong enough to carry the weight.
The Pentagon Is Calling Detroit's Automakers
According to a report from The Wall Street Journal, the Trump administration has reached out to the CEOs of Ford and GM, as well as executives at GE Aerospace (GE) and Oshkosh Corp. (OSK), to gauge their appetite for producing military supplies and munitions.
- The conversations reportedly started before the conflict with Iran and are tied to concerns that first emerged when the U.S. and NATO began sending weapons to Ukraine after Russia's 2022 invasion.
- Defense officials want to understand where gaps in domestic production capacity exist and which companies could help fill them.
- President Donald Trump's proposed fiscal 2027 budget underscores just how seriously the administration takes this. Defense spending would climb by more than 44% under the proposal, pushing the total to $1.5 trillion, up from roughly $1 trillion this year.
Ford CEO Jim Farley Has Already Flagged the National Security Risk
Ford CEO Jim Farley has already connected the dots between skilled labor shortages and national defense.
Farley has previously warned that the shortage of mechanics at Ford dealerships, with reportedly more than 6,000 service bays sitting empty across the U.S. due to a lack of qualified technicians, is not just a business problem. He has gone so far as to point out that tech giants like Alphabet's (GOOG) (GOOGL) Google couldn't build tanks and planes in a wartime scenario.
From a financial standpoint, Ford is in better shape than it was a few years ago. The company posted $6.8 billion in adjusted earnings before interest and taxes (EBIT) for full-year 2025, despite absorbing roughly $2 billion in tariff-related costs and another $2 billion tied to disruptions at aluminum supplier Novelis.
Revenue grew for the fifth consecutive year to $187 billion, the company reported on its fourth-quarter 2025 earnings call.
Ford's commercial vehicle business, Ford Pro, remains a standout. It generated more than $66 billion in revenue and $6.8 billion in EBIT at a double-digit margin in 2025. That business already serves government and fleet customers, making it a logical entry point for defense-adjacent work.
Out of the 23 analysts covering F stock, five recommend “Strong Buy,” 15 recommend “Hold,” and three recommend “Strong Sell.” The average Ford stock price target is $13.49, above the current price of $12.87.
What a Defense Push Could Mean for GM Stock
General Motors is also well-positioned for this conversation, though its pitch to the Pentagon would look different.
GM CFO Paul Jacobson spent much of the company's recent presentation at the Bank of America Global Automotive Summit discussing the power of its connected-vehicle platform, OnStar.
The system now serves 12 million customers globally and is expected to reach 13 million subscribers by year-end with close to $7.5 billion in deferred revenue on the balance sheet. That connected intelligence capability, the ability to track, manage, and communicate with vehicles remotely, has obvious applications in logistics-heavy defense operations.
On the balance sheet side, GM has been generating $10 billion or more in free cash flow annually for four straight years. The company has $10 billion to $12 billion in planned capital expenditures for 2026 and 2027 and a pension that is nearly fully funded.
Out of the 28 analysts covering GM stock, 17 recommend “Strong Buy,” three recommend “Moderate Buy,” six recommend “Hold,” and two recommend “Strong Sell.” The average GM stock price target is $92.07, above the current price of $81.32.
In short, both companies have the financial muscle to take on defense contracts without putting core operations at risk if the terms are right.
Should Investors Treat This as a Real Catalyst for F and GM Stocks?
The honest answer: not yet.
These are preliminary talks. No contracts have been signed. And auto-to-defense conversions, even partial ones, take time and capital to execute.
What this does signal, though, is that both Ford and GM are operating at a scale and level of stability that make them credible partners for the federal government. That is a meaningful shift from where these companies stood during the worst of the pandemic-era supply chain crisis.
For investors weighing F and GM as long-term holds, the defense angle is one more potential tailwind, worth watching closely as the administration's defense spending plans take shape.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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