Last week, standing in front of a truck-mounted THAAD missile defense system draped in an American flag, Lockheed Martin Chief Executive Marillyn Hewson pitched her company’s products from the White House lawn.
“It’s a great system, it’s American-made, and we’re very proud to be here today,” Hewson said in a video broadcast online via the White House Twitter account. Lockheed was among several businesses that did so as part of a Made in America event at the White House last week.
Last month the company promised to keep open its helicopter production plant in Coatesville, Pa. — part of an important swing district that narrowly favored Hillary Clinton in 2016 — after the president intervened. And Trump and Hewson teamed up for another appearance in early July, at a Lockheed factory in Wisconsin.
“We have a history of productive relationships with presidents, and our relationship with President Trump is consistent with that,” Lockheed Martin spokesman Bill Phelps said in a statement last week. “We believe that the best way to represent our company, our employees and our shareholders is to continue to have a seat at the table and engage in the conversations that affect our business.”
The media campaign comes as Lockheed has benefited from numerous other Trump administration policies, including increased defense spending and support for foreign military sales to Saudi Arabia. On Friday, the Defense Department announced a contract worth up to $1.47 billion in foreign military sales for Saudi Arabia’s THAAD missile defense system, increasing the total value of that contract from $3.89 billion to $5.36 billion.
In some cases though, the company’s arms sales have become flash points in a geopolitical competition with Russia and China. Last week, the president promised to block the Turkish military’s purchase of more than 100 F-35 Joint Strike Fighters — Lockheed’s flagship product — after Turkey struck a deal to buy the Russian-made S-400 missile defense system.
Lockheed’s eagerness to court the president is not out of the ordinary in the defense industry, where business is driven by federal spending. Top defense manufacturers employ scores of lobbyists to keep tabs on Congress — many of them former congressional staffers or military officials themselves. And some defense executives have entreated the president directly, seeking to draw him into disputes over multibillion-dollar contracts.
“These weapons systems are around for a long time. You’ve got to be working the Pentagon leadership, with Congress, and with the White House,” said Arnold Punaro, a retired Marine Corps general who later served as board chair of the National Defense Industrial Association, a trade association.
Still, some defense analysts say last week’s White House-hosted advertisement raises troubling questions. With more than $40 billion worth of annual federal contracts, Lockheed gets more money from taxpayers than many of the government agencies it serves. It is the world’s largest defense contractor by a wide margin and is twice the size of China’s biggest defense manufacturer, according to data compiled by Defense News. Lockheed reported $14.4 billion in sales for the most recent quarter, reflecting a 7 percent jump over the same time period last year.
Mandy Smithberger, director of the Center for Defense Information at the Project on Government Oversight, said the White House appears to be “leveraging the defense industry to try and promote its political agenda.”
Mackenzie Eaglen, a defense analyst with the conservative think tank American Enterprise Institute, said the White House-hosted advertisements could give the impression of favoritism, even though it is not out of the ordinary for presidents to have “corporate friends.”
“Because this is in some ways uncharted territory — you could see in a future bid protest the companies harkening back to the company’s words, tweets and factory visits,” Eaglen said.
If Trump’s statements are any measure, Lockheed has drawn the president’s attention better than any other defense contractor except Boeing. According to Factbase, a website that catalogues the president’s public statements, Trump has referenced Lockheed Martin in public appearances on at least 55 occasions, compared with 232 for Boeing. He has referenced Hewson on at least 10 occasions, more than any other defense industry CEO.
“In the beginning of Trump’s presidency Boeing seemed to have established a closer relationship with Trump personally than any of its competitors,” said Loren Thompson, a defense consultant who works with both companies. “But recently Lockheed has seemed to be evening up that balance, if you will. Lockheed has worked really hard to be responsive to Trump, and it is starting to pay off.”
The president’s recent interactions with Lockheed have taken on the air of campaign stopovers.
At a recent presidential visit to a Milwaukee-based Lockheed Martin subsidiary, Derco Aerospace, marketing taglines for Lockheed weapons appeared seamlessly alongside plaudits for the White House’s major initiatives.
Against a backdrop marked with the president’s proposed trade deal, Hewson and Trump traded complements from a podium bearing the presidential seal. They were flanked by the American flag, the flag of Wisconsin and a towering canvas emblazoned with “F-35 Lightning II” — better known as the F-35 Joint Strike Fighter.
Before ceding the podium to Trump, Hewson touted the company’s plans to hire thousands of people over the next year.
“The main reason for that, Mr. President, is because of the pro-growth policies that you’ve put in place on tax reform and regulatory reform that are making a difference, not only for Lockheed Martin, but for American businesses,” Hewson said, before voicing her support for the president’s proposed trade agreement.
Not long after Hewson left the stage, the president summed up their relationship in a few sentences: “Folks like Marillyn would say. ‘We’re the most optimistic we’ve ever been.’ … Would you say that’s true? You better say yes, Marillyn,” the president said, spotting Hewson in the crowd, smiling and winking. “I know Marillyn very well, and I know she feels that way.”
The Coatesville factory sits about an hour’s drive to the west of Philadelphia, an important swing district in a state that carried Trump to the White House. It produces S-92 and S-76D helicopters, which oil companies use to ferry workers to and from offshore rigs. It is also handles equipment upgrades for Lockheed’s VH-92 presidential helicopter.
In early June, Lockheed announced it would close the plant as it sought to navigate “a multiyear slump in the rotorcraft industry,” a company spokeswoman told the Philadelphia Inquirer. The closure affected about 465 jobs.
Then on June 14, the president tweeted he had spoken with Hewson about maintaining operations there: “While Pennsylvania is BOOMING, I don’t want there to be even a little glitch in Coatesville — every job counts. I want Lockheed to BOOM along with it!”
Lockheed then reversed its decision. In a statement, Hewson credited Trump with the reversal.
“At the request of president Trump, I took another look at our decision to close the Coatesville, Pa. facility and have decided to keep it open while we pursue additional work,” she said.
It is unclear how long the company intends to keep the Coatesville factory open or whether there is a long-term plan to find more work for it.
Lockheed’s recent attention from the White House is the product of years of relationship-building that started before Trump’s inauguration.
The company contributed $1 million to Trump’s inaugural celebrations, one of 63 contractors that did so, according to the Center for Responsive Politics. Lockheed recently hired David Urban, a former Trump campaign aide who has advocated missile strikes against Iran, as a lobbyist.
Hewson began meeting directly with Trump in the weeks before his 2017 inauguration, when Lockheed was embroiled in highly public negotiations over its 10th shipment of F-35 fighter jets. After Trump threatened to abandon the F-35 in favor of a different plane produced by Boeing, the Pentagon announced a contract deal that shaved $728 million off the total cost of the program.
Trump later said in an interview with Forbes that he had “developed a bidding system between Boeing and Lockheed,” adding that “the generals were unable to get anything off the price. And in fact, they wanted to raise the price and claim extras.”
Since then Lockheed Martin and the Pentagon have announced successive purchases of F-35s that have brought the price of the plane down from more than $100 million to less than $80 million. The unit price has come down in large part because the Defense Department is now buying more of them with each order, allowing Lockheed to spread its costs across more units.
Although that transition was part of the plan before Trump took office, the bulk orders appear to have become more common under Trump.
The most recent agreement — a tentative deal covering 470 new F-35s for the Air Force, Navy, Marines and allied armed forces — should bring the plane’s price below $80 million ahead of schedule, assuming it is finalized. The president took credit for cost reductions with each successive announcement, and Lockheed has pointed to his “personal involvement” in negotiations.
Tom Hamburger contributed to this report.