Lockheed Martin’s deal to sell a new round of F-35s at a reduced cost to the Pentagon had little to do with President Donald Trump despite the commander in chief’s boasts to the contrary.
The company, one of the largest employers in Fort Worth, Texas, had planned for months to sell the fighter jets for under $100 million apiece, and both supporters and detractors of the most expensive weapons program in the nation’s history say President Trump has done little to mitigate costs beyond public statements and social media posts.
The president, who loves to riff about cajoling Fortune 500 CEO’s into doing his bidding, has now positioned himself as the savior of the F-35 fighter jet program run by Lockheed, a past Twitter target.
“I have already saved more than $700 million when I got involved in the negotiation on the F-35. You know about that,” he said Monday at MacDill Air Force Base in Tampa, Fla. “And I want to thank Lockheed Martin. And I want to thank Boeing. And I want to thank all of the companies that have really opened up. Opened up and cut their prices.”
But in reality the F-35 is years removed from a half decade of the well-publicized cost overruns in the mid 2000s.
“Some people call it alternative facts, I call it just flat-out exaggeration,” said Rep. Marc Veasey, a Texas Democrat who supports the F-35 program.
“These cuts were already set to be put in place before Donald Trump even became president, and people have been talking about the costs of the F-35 for quite some time,” Veasey said. “The only thing Donald Trump did was spread fear and uncertainty through Fort Worth and cost the company billions of dollars when he made the stock prices go down.”
Just days before the November 2016 election, the Pentagon issued a $6.1 billion “unilateral” contract for 57 of the F-35 aircraft, an agreement that locked in Lockheed’s profit margin for a portion of the massive program.
Lockheed disagreed with that decision because the government was able to set Lockheed’s margins without the company’s consent. That November contract decreased the cost per plane by 3.7 percent to just over $107 million per plane.
“The atrocity is not that he’s (Trump) taking credit for numbers already on paper, it’s that he’s taking credit for people who did really hard work that he would like to fire,” said Richard Aboulafia, a military aircraft analyst with Teal Group, a Northern Virginia based aeronautics analysis firm.
A White House spokeswoman did not respond to a request for comment.
The recent $600 million cuts to the latest F-35 contract inked by Lockheed are a product of increased orders for the planes, meaning that more demand drives down the unit cost per aircraft, and the cuts have been anticipated for years as Lockheed ramps up production.
The planes aren’t just being delivered to the United States. Israel received its first shipment of F-35s in December 2016, and 11 countries are involved in building and testing the aircraft.
Lt. Gen. Chris Bogdan, who heads the F-35 Joint Program Office at the Pentagon, said in December to Breaking Defense before the cuts were announced and Trump took office that he expected the newest order for planes “to come down in price significantly … probably somewhere on the order of 6 to 7 percent.”
The announced $600 million cuts fall in the 6- to 7-percent ballpark Bogdan predicted in December.
Lockheed is playing ball with Trump’s recent declarations, saying in a statement last week that “President Trump’s personal involvement in the F-35 program accelerated the negotiations and sharpened our focus on driving down the price. The agreement was reached in a matter of weeks and represents significant savings over previous contracts. This is a good deal for the American taxpayer, our country, our company and our suppliers.”
HOW THE PENTAGON BUYS F-35S
The Pentagon buys F-35s in batches and negotiates with Lockheed on a total price for each batch. As Lockheed ramps up production, the cost per plane goes down.
In November, Lockheed was forced to agree to a $6.1 billion contract for ninth batch of 57 F-35 fighter jets in a unilateral contract agreement, putting the price per plane at just over $107 million.
In January, Lockheed agreed to a deal for the 10th batch of F-35s for a cost of less than $100 million per plane.
There are three variants of the F-35 for each branch of the armed forces. The conventional version of the F-35 the Army uses is cheaper than the F-35s ordered by the Marines and Navy, which have additional capabilities for vertical landings and landing on aircraft carriers.
Max Baker contributed to this report.