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A Private Equity Billionaire Mounts His Biggest Takeover Yet: the Pentagon [View all]
https://www.wsj.com/politics/national-security/private-equity-billionaire-shakes-up-pentagon-7264fec0FREE read: https://archive.ph/TAjxs
Stephen Feinberg is trying to win congressional approval of the largest defense budget ever while browbeating contractors to speed production
On Wall Street, Steve Feinberg had a well-oiled sales pitch for investors thinking of betting billions on his corporate turnarounds.
Now the Pentagon’s No. 2 official, the former private-equity boss faces the biggest sell of his career: persuading Congress to bless the Trump administration’s $1.5 trillion military budget.
The massive funding surge would pour into a military plagued by years of costly overruns and painful delays. Feinberg has told Trump administration officials he could avoid those pitfalls using a carrot-and-stick approach with companies on the receiving end of those dollars.
“Contractors that are willing to change with us will prosper and grow,” Feinberg told a crowd of executives from Lockheed Martin, Northrop Grumman and other major suppliers at the National War College in Washington, D.C. last year. “Those who don’t, and resist it, will be gone.”
The 66-year-old billionaire has been the Pentagon’s top weapons buyer for the past year after leaving his lucrative perch atop private-equity firm Cerberus Capital Management. He has spent much of that time sparring with contractors over progress ramping up output and how they’re investing their money.
. . .
“This is a Cerberus takeover,” said Steve Blank, an adjunct Stanford professor of entrepreneurship and national security. “Private equity has just acquired its largest organization.”
. (the Pentagon)On Wall Street, Steve Feinberg had a well-oiled sales pitch for investors thinking of betting billions on his corporate turnarounds.
Now the Pentagon’s No. 2 official, the former private-equity boss faces the biggest sell of his career: persuading Congress to bless the Trump administration’s $1.5 trillion military budget.
The massive funding surge would pour into a military plagued by years of costly overruns and painful delays. Feinberg has told Trump administration officials he could avoid those pitfalls using a carrot-and-stick approach with companies on the receiving end of those dollars.
“Contractors that are willing to change with us will prosper and grow,” Feinberg told a crowd of executives from Lockheed Martin, Northrop Grumman and other major suppliers at the National War College in Washington, D.C. last year. “Those who don’t, and resist it, will be gone.”
The 66-year-old billionaire has been the Pentagon’s top weapons buyer for the past year after leaving his lucrative perch atop private-equity firm Cerberus Capital Management. He has spent much of that time sparring with contractors over progress ramping up output and how they’re investing their money.
. . .
“This is a Cerberus takeover,” said Steve Blank, an adjunct Stanford professor of entrepreneurship and national security. “Private equity has just acquired its largest organization.”
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