Lockheed Plans $5 Billion in F-35 Savings After Trump Focus (excerpt)
(Source: Bloomberg News; published March 21, 2017)
by Julie Johnsson and Anthony Capaccio
Lockheed Martin Corp. is working with suppliers to squeeze $5 billion from the F-35 fighter jet’s costs as the company negotiates the Pentagon’s biggest order yet of a weapon that has been criticized by President Donald Trump.

“President Trump and his administration have made clear they are focused on being smart buyers,” Lockheed Chief Executive Officer Marillyn Hewson told reporters at a briefing Tuesday in Arlington, Virginia. The president “put a sharper focus on price.”

Business has been anything but usual for Lockheed, the world’s largest defense contractor, since Trump assumed office. The new president has followed through on his vows to seek higher military spending but also has used his Twitter bully pulpit to gain leverage in contract talks for the F-35, the priciest U.S. weapons system.

Trump criticized the jet’s costs as “out of control” late last year and suggested an upgrade of Boeing’s Super Hornet as a possible replacement for at least some of the Navy models of the F-35 Joint Strike Fighter -- prompting a review by U.S. Defense Secretary James Mattis. But later the president claimed credit for the $728 million in savings on a $8.2 billion contract for the latest batch of F-35 jets. In his first address to Congress, Trump praised the stealth fighter as a “fantastic” aircraft.

Looming Large

While the president isn’t involved in talks under way for the 11th and largest production lot of the plane, his presence looms large, Lockheed Chief Financial Officer Bruce Tanner said in an interview.

“I’d like to think that just creates momentum to get Lot 11 done quicker than we have in the past,” he said. “I don’t know that it changes the process, per se.”

The Office of Management and Budget in the blueprint of Trump’s fiscal 2018 budget listed the purchase of additional F-35 Joint Strike Fighters that would enable the Air Force to “counter the growing number of complex threats” the U.S. faces. (end of excerpt)

Click here for the full story, on the Bloomberg website.


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