Market Rocked After Trump Criticizes F-35 Program in Tweet

Four F-35 Lightning IIs prepare for takeoff at Hill Air Force Base, Utah, May 4, 2016. Hill's active-duty and Reserve F-35 pilots recently began flying routine four-ship configurations, just as they would in combat. This marked a key milestone in getting the Air Force's newest fighter jet to reach initial operational capability later this year, at which time it will be combat ready. (U.S. Air Force photo/Paul Holcomb)Four F-35 Lightning IIs prepare for takeoff at Hill Air Force Base, Utah, May 4, 2016. Hill's active-duty and Reserve F-35 pilots recently began flying routine four-ship configurations, just as they would in combat. This marked a key milestone in getting the Air Force's newest fighter jet to reach initial operational capability later this year, at which time it will be combat ready. (U.S. Air Force photo/Paul Holcomb)

Donald Trump is bent on reforming government spending, one tweet at a time.

This morning just before 9 a.m., the president-elect lashed out at the F-35 Joint Strike Fighter program on Twitter, promising to change the game after he enters office.

“The F-35 program and cost is out of control,” he tweeted. “Billions of dollars can and will be saved on military (and other) purchases after January 20th.”

Though Trump did not clearly state what he planned to do after he becomes president, the tweet sent ripples across the defense community and had an immediate impact on the stock market value of Lockheed Martin Corp., the manufacturer of the F-35.

Within hours of the tweet, the company’s stock had dropped more than 4 percent, multiple outlets reported, for a loss in value of more than $4 billion so far.

While the F-35 program has long been held up as an example of acquisition malpractice, with years of delays and budget overruns, defense officials and Lockheed executives have struck an optimistic note this year as three U.S. F-35 variants hit final milestones ahead of their first deployments.

Trump’s comments come the same day the Israeli government, the first country to sign on to purchase the F-35 through the U.S. foreign military sales process, welcomes the arrival of the its first F-35 “Adir” fighters.

In remarks at a ceremony in Israel to mark the event, Jeff Babione, F-35 program manager for Lockheed Martin, emphasized the company’s efforts to reduce aircraft unit costs.

“Since the beginning, we’ve invested hundreds of millions of dollars to reduce the price of the airplane more than 70 percent. We project the price of the aircraft will be $85 million in the 2019 -2020 timeframe,” he said, according to remarks provided to Military.com. “When we get to that price, the F-35 will be less expensive than any fourth-generation fighter in the world. And it will be the premiere fifth-generation fighter. That’s an incredible value for anyone operating the airplane.”

Babione told reporters in March that F-35A unit cost may drop from roughly $100 million per plane today to $85 million by 2019, dependent in part on an international block buy that would drive costs down due to economies of scale.

Trump’s tweet on the F-35 comes six days after he targeted defense giant Boeing in a tweet about costs for Air Force One, the president’s private plane.

“Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!” he wrote.

Lockheed Martin officials have said they plan to respond to Trump’s tweet about the F-35 later today.

 

About the Author

Hope Hodge Seck
Hope Hodge Seck is a reporter at Military.com. She can be reached at hope.seck@military.com. Follow her on Twitter at @HopeSeck.