The U.S. is beginning to openly acknowledge that the traditional defense industry is struggling to keep up. According to the WSJ, the Pentagon has for some time (even before the war with Iran) been in talks with automakers such as GM $GM and Ford $F, but also with GE Aerospace and Oshkosh, about whether they could, if necessary, quickly switch part of their capacity to producing weapons and military equipment. Behind this is the simple fact: stocks of artillery, ammunition and anti-tank systems have been significantly depleted after years of aid to Ukraine, support for Israel and now also strikes on Iran, while Trump is pushing the military budget to the level of 1.5 trillion dollars per year.

The government is checking whether large industrial players could function as a backup manufacturing base when traditional defense contractors are pushed to their limits. For the automakers themselves it’s not that they’d immediately start assembling tanks instead of pickups, but that it opens up the possibility of military contracts for vehicles, parts, platforms and other hardware if the conflict were to be prolonged and expand. From an investor’s perspective, it’s a clear signal that the U.S. expects permanently higher defense spending and is looking for ways to quickly raise capacity — which could be a long-term tailwind not only for traditional defense titles but also potentially for selected industrial firms that become part of that ecosystem.