Trump’s Latest Victory: Lockheed Will Cut F-35 Price Below $100 MM

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According to a Reuters report, Lockheed Martin and the United States Department of Defense are close to reaching a deal for a $9 billion contract. For the first time during the bilateral negotiations, Lockheed Martin agreed to bring the price of an F-35 Joint Strike Fighter below $100 million.

President Elect Donald Trump tweeted last month about the airplane’s high costs and last week he brought the F-35 issue in his 1st press conference.

Donald Trump wasn’t shy about going to social media and criticizing or heap praise on military programs or individual companies. A tweet from December 6th bashed Boeing, a Chicago based company for what Trump called as the out of control cost of the Air Force One airplane.

Weeks after the respective tweet, Trumped asked Boeing to “price out” as in making an offer for a comparable F18 Super Hornet due to Lockheed Martin F-35’s high costs.

 

In a Wednesday news conference which was aimed at clarifying his potential business conflicts, Donald Trump briefly brought back the F-35 issue once again, saying that he has big plans with the program yet there must be a way to improve the airplane and to trim costs in the same time, i.e. to make it cheaper yet better.

It may sound funny to you, but Trump’s strategy seems to have been worked like a Swiss watch. Consider this: last Friday, Marillyn Hewson, Lockheed Martin’s chief executive met with The Donald in the Trump Tower in New York. Afterwards, she told reporters that Lockheed Martin is close to signing a new contract deal that will create new jobs whilst cutting the price of the F-35 stealth fighter jet.

Hewson said:

“We had the opportunity to talk to [Trump] about the F-35 program, and I certainly share his views that we need to get the best capability to our men and women in uniform and we have to get it at the lowest possible price

So I’m glad I had the opportunity to tell him that we are close to a deal that will bring the cost down significantly from the previous lot of aircraft to the next lot of aircraft and moreover it’s going to bring a lot of jobs to the United States.”

Which brings us to today’s Reuters report:

The U.S. Defense Department expects to spend $391 billion in the coming decades to develop and buy 2,443 of the supersonic warplanes. Though the F-35 program has been criticized by Trump as too expensive, the price per jet has already been declining. Lockheed, the prime contractor, and its partners have been working on building a more cost-effective supply chain to fuel the production line in Fort Worth, Texas.

The overtures from the incoming administration may have had some effect, but Lockheed’s F-35 program manager Jeff Babione said last summer that the price of the F-35A conventional takeoff and landing version of the jet would drop to under $100 million per plane in this contract for the 10th low-rate production batch.

Source: Reuters