Private equity in U.S. manufacturing

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Introduction

The manufacturing sector is key to the United States economy, accounting for 10.2 percent of the country’s gross domestic product in 2023. The sector employed approximately 15 million workers in 2024, representing nine percent of total US employment. The world’s largest manufacturer as recently as 2000, the US now comes second to China, whose manufacturing sector is 25 percent of its GDP. As the Trump Administration espouses a commitment to bringing manufacturing jobs back to the United States after decades of offshoring, KPMG, McKinsey, and other investment analysts are exploring potential opportunities for domestic growth. 

Private equity firms around the world are increasingly interested in these opportunities, but the reputation of the private equity business model has created some distrust among small business owners. Matt Guse, president of MRS Machining in Wisconsin, finds: 

a real disconnect between buyers and sellers that goes way deeper than price. Almost every week, I hear from private equity firms or buyers circling manufacturing businesses, coming in with their own playbooks. But let’s be honest: most buyers still approach business owners like they’re handing them a favor, tossing out the same tired 2x–4x multiples, assuming owners are desperate to cash out. That attitude misses the point entirely. Manufacturing business owners aren’t just selling off machines and real estate. They’re putting decades of hard work, community, and identity on the line. These are their legacies, not just another transaction to check off a spreadsheet. Treating these deals as cold, purely financial moves ignores everything that actually makes these businesses valuable in the first place.

This report explores the trends and consequences of private equity’s incursion into the manufacturing sector, with a particular focus on how it impacts workers and communities. For the purposes of this report, manufacturing will include the following categories: materials (e.g. chemicals, glass, metal), aerospace and defense, building products, electrical equipment and machinery, consumer discretionary (e.g. cars, textiles), consumer staples (e.g. food, beverages, personal products), health care equipment and supplies, and information technology (e.g. communications equipment, semiconductors).  

Key Report Findings

• In the first half of 2026, manufacturing accounted for more than 20 percent of private equity acquisitions of companies with more than 500 employees. 
• The US Department of Defense has been taken over by former Cerberus executives looking to manage the agency’s procurement and holdings like a private equity firm. Several Cerberus-owned companies have received federal contracts in recent years.
• The growth of defense industries, data centers, and artificial intelligence is driving private equity investment in manufacturing, with more than half of Q1 and Q2 2026 manufacturing acquisitions serving these sectors.
• In 2025, private equity-owned companies represented two-thirds of manufacturing bankruptcies with liabilities over $500 million.
• Private equity ownership in manufacturing has led to increased market consolidation, layoffs, bankruptcies, union-busting, health and safety risks to workers and communities, and more.

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