In his first press conference since winning the presidential election in November, Donald Trump again took aim at Lockheed Martin’s F-35 Joint Strike Fighter.
His latest comments followed a tweet last month about the F-35’s “tremendous cost and cost overruns.” The president-elect said he had asked Boeing to “price out a comparable F-18 Super Hornet.”
“We’re going to do some big things on the F-35 program and perhaps the F-18 program,” Trump reiterated Wednesday. “And we’re going to get those costs way down, and we’re going to get the plane to be even better, and we’re going to have some competition and it’s going to be a beautiful thing. So we’ve been very very much involved.”
Trump offered few details before moving on. But the 30 seconds or so he devoted to the topic jolted stocks at Lockheed Martin and Boeing, the two companies primarily responsible for the F-35 and F-18 programs respectively, though both recovered throughout the day.
On the whole, defense investors have been bullish on the prospect of a Trump presidency. Defense stocks surged on the morning after the election and have gained in the months since, as investors apparently take cues from campaign promises to grow the size of the military. The S&P’s index of defense stocks is up more than 10 percent since the election.
The F-35 was under criticism for delays and cost overruns long before Trump took to Twitter over the issue. The cost of each plane currently stands at more $100 million per plane, though the company says it expects the per-plane price to drop as production ramps up. Last year, the Pentagon and Lockheed Martin failed to agree on the price of the plane, with the company publicly expressing disappointment after the Defense Department unilaterally awarded a $6.1 billion contract to continue the program. It is yet to be flown in combat missions.
On Monday, the Defense Department acknowledged another schedule delay affecting production of the plane, increasing the cost of the program by an estimated $500 million. Arizona Sen. John McCain, who has broken sharply with the president-elect on issues such as torture of detainees and relations with Russia, criticized the delay in a Tuesday statement and in a letter he sent to the chief executive of Lockheed Martin.
“This is yet another troubling sign for a program that has already nearly doubled in cost, taken nearly two decades to field, and has long been the poster child for acquisition malpractice,” McCain said in the statement.
The Republican has been effusive about the plane’s combat capabilities but has been less happy about the programs continuing cost over-uns. The statement went on to blame onerous procurement regulations, suggesting he wants cost reductions to come from slashing regulations rather than trimming the contract itself.
Those keeping tabs on the defense industry say the rare alignment of Trump and McCain suggests program changes are likely
“A Trump-McCain combination would be hard to counter because these are two of the most forceful personalities on the Washington landscape,” said Loren Thompson, chief operating officer of the nonprofit Lexington Institute, which receives funding from numerous defense firms including Lockheed Martin and Boeing. “If Trump and McCain get together on trying to reduce the cost there’s going to have to be some reduction of the price tag.”
In an email to the Washington Post, Lockheed Martin Spokesperson Bill Phelps highlighted existing efforts to cut the cost of the program.
“We understand President-elect Trump’s concerns about the F-35 program and we’ve given him our full commitment to drive down cost aggressively. We are focused on delivering the best capability possible at the best value for the American taxpayer,” the statement read. “We look forward to continuing to work with our government and military leaders to build on the F-35 program’s record of performance and affordability.”
Boeing spokesperson Todd Blecher emailed a statement saying the company would work with the president-elect in the future.
“We have been responsive to requests for information from the incoming Trump administration, just as we have with others in the past,” the statement said. “We remain committed to working with the new president and Congress to provide affordable, capable Boeing products and services to meet our national security needs.”