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The US Department of War and Lockheed Martin have announced a framework agreement to accelerate the production of Precision Strike Missiles (PrSM) in response to increasing demand.
This agreement builds on a US$4.94 billion (AU$7.11 billion) contract award by the US Army to support the quadrupling of PrSM production capacity following a growing push by the Trump administration to rebuild the “Arsenal of Freedom” spearheaded by the Secretary of War Pete Hegseth.
Lockheed Martin chairman, president and CEO Jim Taiclet celebrated this announcement, saying, “We are working closely with the Department of War and the US Army to scale production to meet operational demand and ensure the joint force has the capabilities needed to deter and defeat emerging threats.”
The company stressed that this move directly supports the government’s imperative to build a more lethal, resilient and competitive fighting force, all underpinned by an advanced and diversified defence industrial base following decades of counter-insurgency operations in the Middle East, shifting the industrial priorities to competing with a peer competitor.
In order to deliver this expanded defence industrial base, Lockheed Martin has invested more than US$7 billion (AU$10.1 billion), including US$2 billion (AU$2.9 billion) to accelerate the production of munitions, investments in facilities, tooling, suppliers and workforce, enabling higher production rates at speed and scale.
Taiclet added: “Lockheed Martin delivers the advanced precision fires capabilities the warfighter needs, including the Precision Strike Missile, which expands deep-strike capability.”
This expanded production capability has significant implications for Australia, following the 2025 signing of a memorandum of understanding with the United States for the production, sustainment and continued co-development of the Increment 2 variant of the PrSM as part of the nation’s growing Guided Weapons and Explosive Ordnance initiative.
As part of this deal, Australia has committed to AU$310 million over the next decade to become a full cooperative partner in the PrSM program. This spending will see more than AU$150 million invested over the next five years to acquire the initial stocks to field the Australian Army’s Long-Range Fires Regiment and is expected to provide Australian industry with opportunities within the PrSM supply chain.
This announcement comes following the recent successful first test flight of the Increment 2 missile by the United States Army in March 2026, with new chief executive Lockheed Martin Australia and New Zealand, Jeremy King, saying, “This is an outstanding result for the Lockheed Martin team and serves as a testament to the success of the cooperative partnership between the Australian and US governments in accelerating the production and development of the Precision Strike Missile. Lockheed Martin’s close collaboration with the US Army and our supplier network aims to enhance long‑range, land‑based strike capabilities in Australia and to ensure a more secure Indo‑Pacific region.”
Stephen Kuper
Steve has an extensive career across government, defence industry and advocacy, having previously worked for cabinet ministers at both Federal and State levels.
