Pentagon Asks Carmakers to Boost Weapons Production

SPEAKER_1 (0:02)

What does leadership really look like? On the Power of Advice, a new podcast series from Capital Group, you'll hear from athletes, entrepreneurs, and executives who've led on the field, in the boardroom, and in their communities. It's not about titles, it's about impact. Discover what drives them and the advice they carry forward.

Subscribe and start listening today. Published by Capital Client Group, Inc.

Luke Vargas (0:32)

Washington dusts off its World War II playbook asking manufacturers like GM and Ford to ramp up weapons production.

Plus why pricier fuel is putting Spirit Airlines' future in doubt. And Europe drafts a plan to protect the Strait of Hormuz after fighting stops, ignoring President Trump's appeal for immediate help.

Max Colchester (0:54)

The chance is that he sees this plan that Europe has cooked up as something of a nothing burger and that it actually ends up just irating him further and further alienating the US from Europe.

Luke Vargas (1:08)

It's Thursday, April 16th. I'm Luke Vargas for The Wall Street Journal, and here is the AM Edition of What's News, the top headlines and business stories moving your world today.

The Trump administration is pressing US manufacturers to massively boost weapons production, framing the push as a matter of national security. We're exclusively reporting that senior defense officials have held wide-ranging talks with executives at Ford, GM, GE Aerospace, and Oshkosh as part of the latest effort to put military manufacturing on what Defense Secretary Pete Hegseth has called a wartime footing. Lawmakers and the Pentagon have been concerned about manufacturing capacity since US and NATO began transferring large quantities of weapons to Ukraine after Russia's full-scale invasion in 2022 The Pentagon's recent request for a $1.5 trillion budget, which would be the department's largest in modern history, calls for major investments in munitions and drone manufacturing. Firefighters in Australia have extinguished a major blaze at an oil refinery after it burned for over 12 hours. Our David Winning told me the fire is insult to injury for a country already dealing with stretched energy supplies because of the Iran War.

David Winning (2:19)

Australia used to have a thriving refining industry. But what we've seen over the last 15 years is that a lot of the facilities that they had closed, and in many cases were replaced by fuel import terminals. The fire, which happened very late on Wednesdays at a refinery that produces 120,000 barrels per day, that meets 10% of Australia's fuel needs and 50% the needs in the state of Victoria, which is home to Melbourne. So it is a setback.

Luke Vargas (2:46)

To shore up supplies, Australia's Prime Minister has been visiting regional oil suppliers and announced deals today to import diesel from South Korea and Brunei, though David said Australia is not out of the woods just yet.

David Winning (2:58)

The question for me is not so much how it feels in cities. It will be how it feels in remote areas where, you know, use diesel for farming, we're coming up to a planting season, and there's only one gas station within a reasonable distance and all of the communities around it are using that fuel supply. That is where the pinch point is. If this evolves into fuel rationing, we're currently on level two of a four level strategy of which rationing is level four, then that would have political implications. The government has tried to hold costs down. They've halved the fuel excise duty. So that is offering relief to people and sort of easing anxiety. But then again, on the flip side, it also stokes demand because consumers aren't getting the right price signals.

The question is how successful the government is going to be in terms of competing on the international stage for cargoes and being able to maintain fuel supply into Australia.

Luke Vargas (3:53)

According to the International Energy Agency, Australia had just 49 days worth of oil held in reserve at the end of last year, the lowest levels of any IEA member and below the IEA's minimum 90-day requirement.

Spirit Airlines is facing a potential liquidation as its plans to escape bankruptcy collide with surging fuel prices. The discount carrier and some of its creditors had reached a deal just before the Iran War that would have seen it emerge from Chapter 11 as a leaner airline by early summer. However, the lenders behind Spirit's revolving credit line have since objected to that reorg, saying that it didn't account for much higher fuel expenditures. While the likes of Delta and United hope to recoup fuel costs through ticket prices, Spirit is more vulnerable, with JP Morgan Analysts saying that its higher fuel costs could surpass its cash on hand.