(Adds comments from Boeing, defense experts)
By Emily Stephenson and Jeffrey Dastin
HONOLULU/LOS ANGELES Dec 22 U.S.
President-elect Donald Trump heaped pressure on Lockheed Martin
Corp on Thursday, saying he viewed costs for the
aerospace company's F-35 fighter as too high and had asked
Boeing Co to offer a price for an older aircraft that
lacks the same stealth capabilities.
Trump posted his Twitter message a day after the
president-elect met with the chief executives of both aerospace
companies, using the bully pulpit to press them on projects he
says are too expensive.
In after-hours trading following Trump's tweet, Lockheed
shares fell 2 percent and Boeing's rose 0.7 percent.
"Based on the tremendous cost and cost overruns of the
Lockheed Martin F-35, I have asked Boeing to price-out a
comparable F-18 Super Hornet!" Trump said.
Lockheed declined to comment. The F-35 program is a critical
sales generator for the company, accounting for 20 percent of
last year's revenue of $46.1 billion.
The Pentagon did not immediately respond to a request for
comment. Boeing spokesman Todd Blecher said in an email that the
company was committed to providing the capability and
affordability to meet national security needs.
While the F-35 program has been dogged by problems and costs
have escalated to an estimated $379 billion, it is significantly
newer than the F-18, which does not have the same stealth
"They're two completely different aircraft from different
generations," said Phillip Carter, a senior fellow at the Center
for a New American Security, a Washington-based think tank.
"It's like comparing an old jeep to a Humvee."
Dan Grazier of the Project on Government Oversight, a
nonprofit that investigates government contractors, said the
F-35's stealth capabilities drove the cost up, but its
usefulness had not yet been demonstrated. He said canceling the
program, however, would be "disruptive."
On the campaign trail, Trump touted his negotiating skills
as a businessman, and he appears to be using similar tactics as
he prepares to take office on Jan. 20. It was not clear how his
blunt style would translate to Pentagon procurement or
On Wednesday, Trump met the CEOs of Lockheed and Boeing at
his resort in Palm Beach, Florida. Boeing CEO Dennis Muilenburg
told reporters there that he had guaranteed costs would not get
out of control for a replacement to Air Force One, the
presidential plane, another project Trump calls too expensive.
Lockheed Chief Executive Marillyn Hewson did not speak to
reporters but said in a statement that the meeting was
"productive." Trump told reporters he wanted to cut the F-35
If he scrapped the F-35, such a move by a new administration
would have some precedent. Then-President Jimmy Carter canceled
the B-1 bomber program in June 1977, although it was resurrected
by his White House successor, Ronald Reagan.
Trump's jockeying for leverage via his Twitter account is
likely to be a hurdle for all U.S. defense contractors in the
next administration, Roman Schweizer, aerospace and defense
analyst at financial services firm Cowen & Co, wrote in a note
to clients on Thursday.
"We have no idea how this plays out but believe 'Twitter
risk' for defense companies could be a significant issue over
the next four years," Schweizer wrote. "This is Lockheed
Martin's time in the barrel."
(Reporting by Emily Stephenson and Jeffrey Dastin; Additional
reporting by Mohammad Zargham and Idrees Ali in Washington and
Andrea Shalal in Berlin; Editing by Sandra Maler and Jonathan