December 12, 2016 / 2:03 PM / in 7 months

CORRECTED-UPDATE 2-Trump targets Lockheed Martin's F-35 fighter jet costs

3 Min Read

(Corrects to say Pratt & Whitney is a subsidiary of United Technologies, not a privately held company)

WASHINGTON, Dec 12 (Reuters) - U.S. President-elect Donald Trump took aim at another major defense contractor on Monday, saying the cost of Lockheed Martin's F-35 fighter jet program was too high.

The aerospace giant's shares dropped about 4 percent in early trading after Trump's tweet, while shares of several other defense contractors also weakened.

"The F-35 program and cost is out of control," Trump said on Twitter. "Billions of dollars can and will be saved on military (and other) purchases after January 20th."

Jeff Babione, Lockheed Martin's F-35 program leader, responded by saying the company understands concerns about affordability and has invested millions of dollars to reduce the jet's price.

A week before Trump won the Nov. 8 presidential election, the U.S. Defense Department and Lockheed Martin concluded negotiations on their ninth contract for 90 F-35 fighter jets after 14 months of negotiations on the deal, the Pentagon said.

Lockheed won the contract, valued at up to $7.18 billion, in late November and has received an interim payment.

Trump campaigned on a promise to cut waste in federal government.

Last week, he also used Twitter to target Boeing Co for its "out of control" costs on a new fleet of Air Force One planes, urging the federal government to "Cancel order!"

Lockheed and its key partners, Northrop Grumman Corp , Pratt & Whitney and BAE Systems, are developing and building three variants of the F-35s for the U.S. military and 10 allies including Britain, Australia, Norway, Denmark, the Netherlands, Italy, Turkey, Israel, Japan and South Korea.

After Trump's Monday morning tweet, shares of Northrop Grumman Corp were 2.3 percent lower and shares of Pratt & Whitney's parent company, United Technologies Corp, were off less than 1 percent in premarket trade. Shares of BAE Systems were nearly one percent lower in London.

Earlier this month, the Pentagon's chief arms buyer said he was hopeful that Lockheed F-35 block buy will proceed. (Reporting by Doina Chiacu and Susan Heavey; Editing by Alden Bentley and Bill Trott)

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