Donald Trump scolded military jet manufacturer Lockheed Martin on for “out of control” costs on Monday, sending the defence contractor’s stock plummeting.
“Billions of dollars can and will be saved on military (and other) purchases after January 20th,” when he will officially take office, the president-elect wrote on Twitter. The subsequent share price drop cut $4bn from the company’s value and is the latest of a series of attacks on businesses made by Trump.
The Lockheed-Martin F-35 fighter jet is the most expensive military hardware program in history and is scheduled to quadruple production during Trump’s administration. Each jet currently costs $100m. Trump’s tweet sent the price falling from $252 to $246 – a loss of about $28.6m per character tweeted.
It is unclear why Trump targeted Lockheed Martin or how or if he intends to save money on the program.
Jeff Babione, the F-35’s general manager, said Lockheed-Martin “understand the importance of affordability and that’s what the F-35 has been about” in an emailed statement. “Whoever has it will have the most advanced air force in the world, and that’s why we’re building the F-35,” Babione wrote. “That’s why it’s important that the US and our partners, like the Israeli air force, have this aircraft. It’s a great value and we look forward to any questions the president-elect may have.”
Lockheed has defended the joint strike fighter program as job-creating. The firm uses facilities in 45 of 50 US states and says the F-35 program is “responsible for more than 146,000 direct and indirect US jobs”, according to the company’s website.
The salvo against Lockheed is only Trump’s latest: on Tuesday the president-elect attacked Lockheed competitor Boeing, again for “out of control” prices for Air Force One, the president’s private jet. Those comments sent the contractor’s share price into a similar tailspin. “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!” Trump wrote on Twitter.
Lockheed-Martin doesn’t manufacture the F-35 alone. The stakeholders form a complex geopolitical web – one reason it has been allowed to grow so costly. UK defense hardware firm BAE Systems makes the airplane’s aft section; Californian company Northrop Grumman makes the plane’s center fuselages, as does Ankara’s Turkish Aerospace Industries.
The F-35 will be for use by US and allied military forces, Turkey and the UK among them. Trump was broadly critical of American military support for its allies during his campaign, criticizing it as too expensive.
Trump has previously commented on the F-35, but never to criticize. In 2014 he quoted a follower’s criticism of the Affordable Care Act website, saying the US “could have bought 50 F35 fighters or 5 Aircraft Carriers but we got a worthless website”. In 2012, Trump linked to a story about the suspected theft of F-35 plans by Chinese spies on a blog called Asia Security Watch, run by a think tank called the New Pacific Institute.