Trump: Cost of Lockheed Martin's F-35 'Out of Control'
Updated at 12:07 p.m. ET
President-elect Donald Trump is targeting another “out of control” government program: The F-35 Joint Strike Fighter.
In a message on Twitter (NYSE:TWTR), Trump criticized the costs tied to the F-35 program, which is led by Lockheed Martin (NYSE:LMT).
“The F-35 program and cost is out of control. Billions of dollars can and will be saved on military (and other) purchases after January 20th,” Trump said, referring to his Inauguration Day.
Shares of Lockheed Martin dropped 5.1% to $246.33 a share on Monday morning.
Jeff Babione, Lockheed Martin’s general manager for the F-35 program, said the company is working to make the F-35 less expensive to produce and maintain. Lockheed Martin projects each F-35 to cost $85 million by 2020, which would make it the least expensive fourth-generation fighter in the world, according to Babione.
“We welcome the opportunity to address any questions the president-elect has about the program. It’s a great program. Lockheed Martin and its industry partners understand the importance of affordability for the F-35 program,” Babione said, speaking at an event in Israel marking the first F-35 deliveries to the Israeli air force.
The F-35 program and cost is out of control. Billions of dollars can and will be saved on military (and other) purchases after January 20th.
— Donald J. Trump (@realDonaldTrump) December 12, 2016
Launched in 2001 and running four years behind schedule, the F-35 is the most expensive weapons program in U.S. history. Costs have ballooned to about $400 billion in the wake of production and design troubles, nearly double the initial estimated cost for the same number of jets.
Trump isn’t alone in his criticism of the F-35’s price tag. Sen. John McCain (R-AZ), chairman of the Senate Armed Services Committee, called the F-35 “both a scandal and a tragedy with respect to cost, schedule and performance” during a hearing in April.
The U.S. Air Force has said a 2012 restructuring of the program lowered the cost to produce each F-35, while production delays have also improved.
The F-35 was designed to be a versatile fighter jet that could replace older warplanes like the F-16, F-18 and A-10. Lockheed Martin is developing three different versions of the F-35 for the Air Force, Navy and Marine Corps.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| LMT | LOCKHEED MARTIN CORP. | 456.09 | +0.04 | +0.01% |
| NOC | NORTHROP GRUMMAN CORP. | 452.30 | +0.48 | +0.11% |
| UTX | n.a. | n.a. | n.a. | n.a. |
Other companies working on the F-35 include defense contractor Northrop Grumman (NYSE:NOC) and engine maker Pratt & Whitney, a subsidiary of United Technologies (NYSE:UTX).
United Technologies was also a target of Trump’s criticism during the presidential campaign. The company’s air conditioning division, Carrier, made headlines for a plan to close a plant in Indiana and move production to Mexico. Early this month, Trump and Vice President-elect Mike Pence went to Carrier’s factory to announce a deal that would keep most production in the U.S.
Trump also called out Boeing (NYSE:BA) last week on Twitter, saying costs to build the next Air Force One are “out of control.” Boeing Chairman and CEO Dennis Muilenburg later called the President-elect and pledged that Boeing would “keep the program as affordable as possible and deliver the best value to American taxpayers.”
Trump’s defense transition team met with the Aerospace Industries Association on Monday, according to Dow Jones Newswires. The Aerospace Industries Association is a trade group representing Lockheed Martin, General Dynamics (NYSE:GD) and hundreds of other companies.