U.S. manufacturers beyond the traditional defense prime contractors—like carmakers—should get Defense Department money to take a crack at building weapons, even at the expense of near-term competition, President Trump’s nominee to be the Pentagon’s No. 2 civilian leader said Tuesday.
“I think we need to bring in new companies,” Stephen Feinberg, the multibillionaire CEO of Cerberus Capital Management, told senators during his confirmation hearing on Tuesday.
The Pentagon needs to “find ways” through rapid or sole-source contracting mechanisms to bring on manufacturing companies, like General Motors or Ford, that can scale and operate to give them a leg up over traditional defense prime contractors, he said.
“I would go to big manufacturing companies, give them a shot on new problems if we think their capabilities can meet it…to give them a shot without a wide-scale competition with all our big defense companies, which, by the way, are too consolidated,” Feinberg said. “They are at a disadvantage competing with the big defense companies…We’ve got to make it easier for them. Maybe not the most competitive answer on the surface, but will lead to much more [competition] in the future.”
Feinberg’s comments come as the Defense Department wants to increase production across multiple areas from shipbuilding to autonomous systems.
When asked about lagging production of nuclear submarines, Feinberg said the U.S. had the manufacturing capacity but struggled to get the private sector to work with the government.
“Our supply chain is definitely weak. Our workforce needs to be improved. But a big piece of improving our supply chain is working more closely with our private sector,” he said. “We have companies that can get it where our needs are, where our shortages are. And we need to work more closely with them; we need people inside of government that understand” issues, such as shareholder pressures.
Cerberus has financed defense tech companies, including DynCorp and M1 Support Services.
The Pentagon and Navy have launched multiple efforts to boost submarine industrial base including an unconventional job campaign and studies to evaluate supply chain and workforce challenges. Congress has also pushed for more funding to spur shipbuilding production.
When asked how to deliver innovative tech to the military faster, Feinberg also said he wished companies were more “patriotic” and that big tech companies would do more.
“They should be all in and always helping us, but they’re not. I wish they could understand that there’s certain rules in government that are not made by the existing sitting people in government, but they’re just there that they have to work by. We have to get our private sector to be more flexible,” he said. “The big tech companies have done great things for America. They can do an awful lot more. We have to understand them…There’s a world of opportunity there for our private sector, like China’s doing way better than us, so it’s a big area we need to get at.”
Feinberg, who served as the chair of the President’s Intelligence Advisory Board during the first Trump administration, also repeatedly touted his intent to reshape the defense industrial base by going “line-by-line” through defense programs to understand how the Pentagon is spending its money.
One of the ways to do that is by ensuring the Pentagon can see all of its financials and trim where needed—that is by passing an audit for the first time.
“We’re going to go over every program, every cost, line by line with an army of people until it’s done—24/7. And we’re going to understand where our costs are, why we don’t have our audit where the financial problems are, and then we’ll come up with a plan to fix it. But it has to get done line by line,” Feinberg said. “It’s a big task. It’s a big war room, but I think the Pentagon will support it. I think the people will be excited to see it as well.”
Feinberg was alluding to the effort to get the Pentagon to pass a standard accounting audit, a longstanding goal that Defense Secretary Pete Hegseth has vowed to accomplish within the next four years. He also mentioned efforts to consolidate the Pentagon’s hundreds of business systems, a process that has been underway for the past few years across the enterprise.
“If confirmed, I can get in there and look at the specific details. We’ve done this historically in so many companies. Generally, when a company has a problem, they often have wild financial issues. So I can’t say exactly, but it’s all achievable. Financial audits are very achievable. We’ll get it done,” he said.
In opening remarks, Feinberg said the military services don’t “have enough money to meet all our current and future needs.” Last week, Hegseth announced plans to move $50 billion within the fiscal 2026 Pentagon budget toward more immediate needs.
Feinberg went on to say the “good news” for the Pentagon was the “great opportunity to improve our cost structure, to really save a lot of money that could be plowed into mission” areas.
Those comments come amid reports of paused and canceled contracts across the federal government, thanks to the Trump administration’s Department of Government Efficiency effort. DOGE members entered the Pentagon earlier this month with the task of streamlining how the department buys weapons.
Lawmakers have previously welcomed the idea of getting the Defense Department to a clean audit but cautioned DOGE officials against broad cuts.
Ahead of the hearing, Rep. Pat Ryan, D-NY, told Defense One that successful programs, such as the drone-focused Replicator initiative shouldn’t be cut.
“I think the focus [of the Trump administration] on driving defense innovation and understanding the urgency, specifically in INDOPACOM, presents a real opportunity,” Ryan said in an interview at the Honolulu Defense Forum. “The worry I have is: so much of the momentum we have established in things like Replicator, we can’t take our foot off the gas on that… The biggest mistake we can make is: new administration comes in, says ‘Oh, the old guys did this. Everything’s bad that they did,’ and that would dramatically hurt the warfighters and hurt our national security.”
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