January 31, 2017 at 3:00 AM
“But we cut approximately $600 million off the F-35 fighter, and that only amounts to 90 planes out of close to 3,000 planes. And when you think about $600 million, it was announced by Marillyn, who’s very talented, the head of Lockheed Martin. I got involved in that about a month ago. A lot was put out, and when they say a lot, a lot meant about 90 planes. They were having a lot of difficulty. There was no movement and I was able to get $600 million approximately off those planes.”
— President Trump, remarks to the press, Jan. 30, 2017
Trump met privately with Lockheed Martin chief executive Marillyn Hewson, following his pre-inauguration criticism in December of the company and the cost of F-35 Joint Strike Fighter planes. Then, in a Jan. 30, 2017, meeting, Trump announced a dramatic cut of $600 million from the program. Is that correct?
In December, Trump criticized Lockheed Martin for its “tremendous cost and cost overruns” of the F-35 program, and said he had asked Boeing to “price out a comparable F-18 Super Hornet.” The two companies, respectively, are primarily responsible for the two programs.
After a Jan. 13, 2017, meeting with Trump, Hewson told reporters that the defense company was working on a deal to cut the cost of the program and create jobs. She said she and Trump discussed the programs, and told 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.”
Then, on Jan. 30, Trump claimed he “was able to get $600 million approximately off those planes.”
But Lockheed already had planned cost reductions. In a Dec. 19 briefing — before Trump began meeting with Hewson — the head of the Defense Department’s F-35 Joint Program Office, Air Force Lt. Gen. Christopher Bogdan, announced costs would come down “significantly.” The next stage in the F-35 program’s low-rate initial production was a new batch of 90 airplanes, called Lot 10. Bogdan had estimated that Lot 10 planes would cost “somewhere on the order of 6 to 7 percent per airplane” less than Lot 9 planes.
Between 6 to 7 percent comes out to a cost reduction of between $6.1 million and $7.1 million per plane, or between $549 million and $630 million for a full lot of 90 planes, The Washington Post’s Aaron Gregg reported. This cost reduction is already reflected in the Air Force’s budget.
Aviation Week’s Lara Seligman noted that Trump overstated his role. The average unit price has been decreasing for years, and Bogdan repeatedly has announced his intention to lower the cost of the jets, Seligman wrote.
“Although a much-anticipated contract for the latest batch of F-35s has not yet materialized, Trump claimed early Jan. 30 that he has cut $600 million from the upcoming low-rate initial production lot 10, estimated to be about 90 aircraft.”
Bottom line: Trump appears to be taking credit for years of work by the Pentagon and Lockheed. “He is taking credit for work that’s already been done on the program by Bogdan and by Lockheed,” says Byron Callan, an analyst with Capital Alpha Partners.”
Trump, yet again, claims credit for decisions that were already made before he became president. Trump stated he “was able to get $600 million approximately off those planes,” thereby ending the “difficulty” and “no movement” in the program.
Yet the Pentagon had already announced cost reductions of roughly $600 million before Trump began meeting with Lockheed Martin’s chief executive. Once again, we award Trump Pinocchios for taking undue credit.
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