Business

Lockheed CEO tells Trump she’s committed to drive down cost of F-35

The F-35 fighter jet is being built at Lockheed Martin Aeronautics in Fort Worth.
The F-35 fighter jet is being built at Lockheed Martin Aeronautics in Fort Worth. Star-Telegram

Lockheed Martin’s top executive told President-elect Donald Trump on Friday that she is personally committed to drive down the cost of the F-35 program aggressively, a day after he threatened to seek an alternative bid for fighter jets from Boeing Co.

“I had a very good conversation with President-elect Trump this afternoon and assured him that I’ve heard his message loud and clear about reducing the cost of the F-35,” Marillyn Hewson, Lockheed’s chairman and CEO, said in a statement. “I know that President-elect Trump wants the very best capability for our military at the lowest cost for taxpayers, and we’re ready to deliver!”

Appropriately, Lockheed Martin tweeted out her statement.

Hewson’s comment came two days after she met with Trump at his Mar-a-Lago resort in Florida to discuss his concerns expressed on Twitter that the program is “out of control.” A day later, Trump tweeted that he had asked Boeing to price out an upgraded F-18 Super Hornet as an alternative to the F-35.

Industry analysts said Friday that it’s unlikely Trump could force a renewed bidding process for the fighter jet program, given that the F-35 is 15 years into its development.

Lockheed’s $379 billion F-35 Joint Strike Fighter, being built in west Fort Worth, is intended to be the mainstay of the Air Force, Navy and Marine Corps, replacing several older planes including early models of Boeing’s F-18. Lockheed is planning to build more than 3,000 of the aircraft for the U.S. and allied forces. The program’s development has been prolonged by cost overruns and technical problems, although the company and Pentagon have reported progress in recent years.

Richard Aboulafia, a military aircraft analyst with the Teal Group, said he thought Trump’s comments regarding a new bid from Boeing were “bizarre.”

“The Navy remains the only U.S. customer for the Super Hornet, while the Marines are completely dependent on F-35Bs and the Air Force is sticking with the F-35A,” he said. “Thus, Trump’s tweet is both late to the game and completely irrelevant.”

The Defense Department has scaled back purchases of the F/A-18E/F model, which lacks stealth and other high-tech capabilities of the F-35, and would require extensive design changes to be comparable to the newer plane.

The Air Force, which plans to buy 1,763 of the F-35A model jets, would not fly Boeing’s minimally stealthy “fourth-generation” Super Hornet, which is designed for aircraft carrier operations.

The Marines decided against buying the Super Hornet “and instead waited for the F-35B in part because the F/A-18E/F” is a conventional takeoff aircraft and the Corps “prefers aircraft capable of vertical operations,” said the Congressional Research Service in a July report.

Loren Thompson, a defense analyst with the Lexington Institute who has followed the program since Lockheed Martin beat Boeing in the winner-take-all contract, said, “Mr. Trump needs to understand all the costs of substituting one plane for the other.”

Super Hornets “require escort aircraft to compensate for their lack of stealth and” capability to gather, fuse and distribute data from weapons sensors, he said. Even the Navy’s initial doubts about the aircraft-carrier version of the F-35 “disappeared after a series of very successful sea trials for the new fighter,” he added.

The Navy’s current plan is to rely on the F-35 during the opening days of a conflict “because it is invisible to enemy radar, and then shift over to use of Super Hornets,” Thompson said.

Moreover, “Boeing offered a stealthier version of the F/A-18 in 2013 that did not gain traction with the Navy or other customers,” Byron Callan, a defense analyst with Capital Alpha Partners, said in a note to clients. “The F/A-18 could not be used on Navy amphibious ships whereas the F-35B can.” Since the Air Force does not operate F/A-18s “there would be costs to integrate that type into its inventory,” he wrote.

“Beyond the program itself, we believe Trump’s tweets are a message to the broader contractor community to keep costs down,” Seth Seifman, an analyst at JPMorgan Chase, said in a report that described the idea of replacing the F-35 as not realistic.

This article includes material from Bloomberg News.

  Comments