Defense Industry Expands in Arkansas Amid Major Munitions Production Push

By The Arkansas Delta Informer Staff

CAMDEN, Ark. – Jan. 29, 2026 –The defense industrial base in Arkansas is set for significant expansion following two major announcements related to the production of critical missile systems, underscoring a national push to secure and ramp up the American munitions supply chain.

The developments involve two defense giants, Lockheed Martin and L3Harris Technologies, both with key operations in the Highland Industrial Park in East Camden, and are directly supported by new framework agreements and investments from the U.S. Department of Defense (DoD).

Lockheed Martin to Quadruple THAAD Production, Break Ground in Camden

Lockheed Martin announced a new framework agreement with the DoD to quadruple the annual production of its Terminal High Altitude Area Defense (THAAD) interceptors, increasing output from 96 to 400 per year over the next seven years. This agreement is the second of its kind, following an earlier deal to accelerate production of PAC-3 Missile Segment Enhancement (MSE) interceptors.

In a move supporting this dramatic increase in capacity, Lockheed Martin is breaking ground on a new Munitions Acceleration Center in Camden. This facility is designed to prepare the future workforce to build THAAD, PAC-3, and other capabilities using advanced manufacturing, robotics, and digital technologies. 

This expansion is part of Lockheed Martin’s plan to invest a multibillion-dollar sum over the next three years to build and modernize more than 20 facilities across several states, including Arkansas. Although Lockheed says the new Munitions Acceleration Center will be located in Camden, most of the defense giant’s operations are headquartered at the 20,000-acre Highland site in East Camden and Calhoun County. The state of Arkansas and the U.S. Census Bureau list the sprawling military industrial park as part of the Camden MSA.

The Camden expansion was announced as the nation’s largest defense contractor reported robust fourth-quarter and year-end 2025 sales, driven by the U.S. military’s aggressive missile program expansion and purchases of Lockheed’s F-35 and F-22 fighter jets, RQ-170 stealth drones, and Sikorsky Black Hawk helicopters.

In the fourth quarter, Lockheed reported earnings for 2025 of $1.3 billion, or $5.80 per share, a significant 161% increase from $527 million, or $2.22 per share, a year earlier. Fourth quarter sales also rose 9.2% to $20.3 billion compared to the same period a year ago.

Year-end earnings of $5 billion were slightly below profits of $5.3 billion in 2024. Sales, however, rose 5.6% to $75 billion in 2025 from $71 billion a year earlier.

“With a record $194 billion backlog, 6% year-over-year sales growth, and free cash flow generation above our prior expectation, 2025 marked a year of unprecedented demand for Lockheed Martin capabilities,” said Lockheed Martin President and CEO Jim Taiclet. “This escalating demand for our signature programs and systems has been driven by combat-proven performance over recent years that has already been again demonstrated in 2026.”

Taiclet continued: “”Having long advocated for a new way of doing business between government and industry, we are well positioned to perform under the (DoD)’s Acquisition Transformation Strategy, as evidenced by our landmark, seven-year framework agreement for PAC-3 missiles early in the first quarter.”

DoD Investment in L3Harris Missile Spinoff to Support THAAD and PAC-3

Further strengthening the supply chain for these same missile programs, the DoD recently announced an unprecedented $1 billion convertible preferred equity investment in L3Harris Technologies’ Missile Solutions business. L3Harris, which has existing operations in Camden, is spinning off the Missile Solutions division into a separate company.

Key details of the financial arrangement include:

• Investment Type: The DoD is the anchor investor, committing $1 billion through a convertible preferred security.
• Purpose: The funding is designed to expand the production capacity of solid rocket motors, a critical component for missile systems like PAC-3 and THAAD.
• IPO Plan: An Initial Public Offering (IPO) for the new, independent Missile Solutions company is planned for the second half of 2026. Following the IPO, the DoD’s convertible preferred security would automatically convert into common equity.

The unusual DoD arrangement comes less than three years after L3 Harris acquired Aerojet Rocketdyne in July 2023 for $4.7 billion. That deal allowed the Melbourne, Fla.-based defense contractor to establish a new business segment and position itself as a critical merchant supplier of propulsion systems and a major subcontractor of rocket motors to Lockheed Martin and other prime defense contractors.

The jewel of that multibillion-dollar deal was Aerojet’s solid rocket motor facility in Camden. “Building on several years of sustained investment and operational improvements by L3Harris, this new company will serve as a key partner to the (DoD) in supporting efforts to deter and defeat America’s adversaries,” said L3 Harris CEO Chris Kubasik.

The DoD characterized this direct-to-supplier investment as a crucial step in its acquisition transformation strategy, helping to rebuild military stockpiles and ensure a resilient industrial base by securing the supply of critical components.