Lockheed Bows To Trump, Will Cut F-35 Program Costs Significantly

Donald Trump Ivanka Eric Jr

Donald Trump Ivanka Eric Jr

Just a few days after he called out Boeing Co (NYSE:BA) for what he saw as an overpriced Air Force One jumbo jet, he put the white-hot spotlight on Lockheed Martin Corporation (NYSE:LMT) - via Twitter - for cost-overruns with its F-35 fighter jets.

He added, "I was able to give the president-elect my personal commitment on behalf of the Boeing Company".

"In our view, the F-35 could be shaping up to be the biggest target for defense savings through President-elect Donald Trump's term in office", Drexel Hamilton analyst Pete Skibitski wrote in a note Friday.

Lockheed produces the F-35, while Boeing is under contract to build a new Air Force One fleet, another project targeted by Trump for its high price tag.

The F-18 is an older model and does not have the same stealth capabilities as the F-35, according to Reuters.

"We're looking to cut a tremendous amount of money off the price", Trump told reporters, referring to Air Force One.

Of his meeting with Ms Hewson, the President-elect said: "It's a little bit of a dance".

Lockheed Martin CEO Marillyn Hewson arrives at Mar-a-Lago, in Palm Beach, Florida, Dec. 21, 2016.

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Boeing said in a tweet of its own that it was "ready to work with Trump's administration to affordably meet USA military requirements".

Hewson later issued a statement calling the meeting "productive". The F-35 program is a critical sales generator for the company, accounting for 20 percent of last year's total revenue of $46.1 billion. The F-35 engines are manufactured by East Hartford-based Pratt while the F-18 propulsion system is made by General Electric, now headquartered in Boston after bolting CT.

Lockheed's $379 billion F-35 Joint Strike Fighter is meant to be the mainstay of the Air Force, Navy and Marine Corps, replacing several older planes including early models of Boeing's F-18.

The F-35's stealth capabilities pushed the cost up, but its usefulness had not yet been proven, said Dan Grazier of the Project on Government Oversight, a nonprofit that probes government contractors.

Lockheed-Martin declined to comment on Trump's remarks.

During the presidential campaign, Trump flaunted his negotiating skills as a businessman. Boeing CEO Dennis Muilenburg said he told Trump the new Air Force One would be built for less than $4 billion, less than what Trump said the plane would cost. While the program is extremely expensive, the cost couldn't go much lower, he said.

Business Insider's Benjamin Zhang reported that the jets are set to enter service in 2024, meaning Trump won't have the opportunity to fly on the aircraft.

"I conveyed our continued commitment to delivering an affordable aircraft to our US military and our allies", Hewson said.