Trump Takes on the Defense Industry

Trump Takes on the Defense Industry | Lockheed stock plummets as Trump criticizes runaway F-35 costs

Styling himself as a shrewd negotiator who can get the best deals, President-elect Donald Trump hasn’t been shy in criticizing the massive cost overruns in some of the Pentagon’s juiciest contracts, setting the stage for potential acrimony with the influential military industry.

Trump raised eyebrows in criticizing the ever-growing cost of a new Air Force One from Boeing, but that $4 billion estimated contract is small potatoes compared to Lockheed Martin’s massive F-35 program, which is the most expensive program in Pentagon history, already swelling to $400 billion.

In fact, the $400 billion is a very conservative estimate at this point, representing development and preliminary purchases, with official estimates that the upkeep of the planes over the lifetime of the program will put it into the $1.4 trillion range.

The costs of the F-35 have been out of control for years, a fact that has been well publicized, but the fact that Trump even mentioned it was enough to cost Lockheed Martin’s stock $4 billion. None of the previous Pentagon reports, GAO reports, or Congressional hearings on the overruns had anywhere near this impact.

Trump’s position may not matter, however, as the costs of the program are ultimately up to Congressional appropriations, and like most big money programs the contract has been spread out over enough Congressional districts that funding is virtually assured.

Trump may well use his position as president as a bully pulpit to try to pressure Congress about putting some restrictions on the cost overruns, but that doesn’t mean it will necessarily happen, and companies like Lockheed will use their significant lobbying powers to try to protect such deals as best they can.

That he’s publicly talking about these things, and is getting media coverage in doing so, may be the real story here, as from the perspective of contractors it risks making their already well-established squandering of hundreds of billions of dollars more common knowledge.

That could well set the stage for some very public fighting between the new White House and the military contractors, many of whom are already griping over Trump’s proposed ban on Pentagon buyers taking jobs with arms sellers, which has historically been an easy way for the big contractors to keep close ties with the Pentagon leadership, and a cushy exit strategy for top Pentagon officers.

It’s unclear if this tough position with contractors is also going to mean a struggle with the Pentagon itself, but while Trump has promised the military more money and appointed multiple former generals to his cabinet, weapons programs in which hundreds of billions disappear into the aether annually are such an established part of the status quo at this point, it seems almost certain he will be ruffling some feathers.

Last 5 posts by Jason Ditz

Author: Jason Ditz

Jason Ditz is news editor of Antiwar.com.

  • RickR35

    Wow, does Trump read our comments here?

    In any case, this is good stuff. It’s time for a leader to put an end to the steady stream of tax payer blank checks to these most-favored industries that contribute little value to life in America.

  • Bianca

    He must. He is getting around to all the money pits. He is taking on the interests of those that are the most invested in regime changes and enemy manufacturing. Keeping in mind the following fact: US energy majors have been undermined globally by the very military contractors and their financiers for a long time. Starting with Bill Clinton to be precise. No wars have been fought for oil but against our energy companies. The motivation we may not know — but it must have much to do with political power. Somebody went through a lots of trouble to undermine our energy interests in Iraq, Iran,Libya, Syria, Yemen — and Russia. Bush younger was sucked into neocon trap
    to enter into occupation business — with the promise to be wellcomed with roses. The whole experiment ended with withdrawal — but not before crafty Petreaus founded and armrd Sunni Awakening to presumay fight Al-Qaeda, but predictably Saudi Barbaria took over the “mansgement” of these armed groups, and turned them into Shia killing Wahhabi cults, the “true believers”, or Salafis. And hundreds of groups descended on Syria, with the latest, ISIS stealing the thunder from others. Suddenly, all the acts of execution of barbarity against civilians were forgotten and forgiven — and all terorists except ISIS becoming overnight “oposition” or “rebels” or “revutionarjes”. If Sytia fell — just like in Libya there would have been no exploration of gas off its coast. With continuing Israeli-palestinian conflict — same would apply to their off shore finds. With Saudi Barbaria keeping oil low and with it depressing the cost of gas — the pressure. on energy companies increased. Fracking added a lots of debt to their balance sheets. There is no question that Trump wants to get energy companies out to do business, and reduce the power of military contractors. One way to do it is by withdrawing many bases where US serves as a babysitter to some unpalatable rulers. These are tripwires destined to keep US fkrces permanently deployed and permanently supplied by contractors. As Trump moves from control based system to trade based — it will take multiple reiteration of reviewing contracts — and their modification or canclations. As it is clearly obvious that emphasis will be on renewing mega deals eith Russia on energy. As well as other opportunities. No room for GMO , though in Russia.

    • Rocky

      Exxon gets about a $Billion a year from their ‘concession’ in one of Iraq’s largest oil fields. BP and Shell are also big players on this list. So no, they didn’t get their wet dream of monopolizing all the fields. I see Petronas as having a decent share, and their are Russian and Chinese companies on the list. But don’t make the mistake of thinking they didn’t get anything out of this. From the list on Wikipedia, I add up the US +NATO based oil companies as getting about $3 Billion a year in revenue from Iraqi oil fields. And that’s not chicken feed.

      https://en.wikipedia.org/wiki/Petroleum_industry_in_Iraq

      And remember, Obama started bombing ISIS on the same day that Exxon and Chevron reported that they were having to abandon oil facilities in Iraq. Which both points to their presence there, as well as noting that when they issued a press release in the morning that they were having to shut down and evacuate, Obama was announcing the beginning of bombing of ISIS by early afternoon. There aren’t many people in the world who can call the White House and get that sort of quick and violent response, but obviously Exxon and Chevron are on the list.

  • curmudgeonvt

    Trump is going to find out that being Chairman and CEO of the USA Corporation is not like any other. He has little power to control the money – the 535 morons (and the MIC and foreign campaign donors) at the other end of Pennsylvania Ave can tell him to pound sand if he gets uppity and threatens the flow of cash.

    And if he already knows that, then all this saber-rattling and podium pounding is not for Congress or the defense industry, but for the plain folk – the 99% – who voted him in and actually believe that he is going to change things. Personally, I’ll withhold any hope that change will actually happen until I see the change happen.

  • nhmakingwaves

    The scary part is that none of us know what Trump really stands for, what he’ll follow-through on, and what kind of pressure he will respond to. So far since the election it’s a mixed bag. He is definitely 100% loyal to the oily-garchy. Perhaps he will favor the oil industry over the military monopolies, to ensure pumping fossil fuels will continue like there’s no tomorrow. Or should I say to ensure there is no next generation of humanity with a planet worth living on.

    • Mark Thomason

      We know about as much as we do about any President-elect. More in some ways, since few have taken on the military industry publicly even before they are sworn in. Few are so openly opposed by the War Party.

      So we don’t know as much as we will. We will not like all that we find out, since we never do with any President.

      However, on this we see what we are getting, and we should accept “yes” when we get it.

      • nhmakingwaves

        I see your point. While specific platforms / campaign promises have been getting more rare and less committed to as a general trend, Trump’s weaselly way of speaking is particularly hard to interpret or hold him to.

        I for one am ready to applaud when / if Trump does positive things, and sadly I recognize many progressives may not be willing to notice. But there are some red lines – if he starts WWIII, his racist / abusive comments won’t matter. If he takes on the military-industrial complex but makes the planet uninhabitable, no applause for sensible budgeting will matter.

  • John Wells

    …….and, the F-35 is a turkey

  • TellTheTruth-2

    The headline, Lockheed Stock Plummets as Trump Criticizes Runaway F-35 Costs, should read, Lockheed’s Overvalued Stocks Had a Price Correction After Trump Criticized the Runaway F-35 Costs. The game, if you can’t get a no-bid contract, is to submit a low bid and then justify cost overruns and, if there is a change to the contract, add huge profits (no bid) to the change. Trump knows their game and he’s calling them out. Good for him!

    • Soprano

      Years of dealing with mobsters in the northeastern construction industry has at least trained Trump very well to deal with these sorts of scams. 🙂

      • Mork

        Too bad that as the President he has no power over military spending or contracts whatsoever. Oops! Maybe he should have run for the Senate in NY as a Dem?

        • The president has been required by law since the 1920s to make a federal budget request each year. He’s free to set whatever spending limits/level he wants in that request, he has the power to veto budgets passed by Congress that deviate from that request, and apart from very specific earmarks, as president he is the chief of the executive branch which means that the Department of Defense answers to him. If he decides he wants to can the F-35, there’s a much better than even chance that the F-35 will end up canned.

        • Mark Thomason

          The President does not have sole power. He certainly has some power. “[T]he President he has no power over military spending” is just not true.

  • Pooney

    My background is more on the anti-war left, and this is exactly what the anti-war left used to want. For political leaders at the very least excercise proper oversight on how money for defense has been spent. Plus of course an overall scaling back of US empire building and the associate cuts to defense spending that such a path would allow.

    So, now the anti-war left is getting at least half of what they once said they wanted. A leader who at least questions the huge bills the defense industry tries to stick the tax-payer for. And what does ‘the left’ do in response? They march in the streets in protest against this leader, and try everything they can to overturn this leader’s election and instead put in a known-to-be corrupt leader who’s never met a defense budget increase she didn’t like. They try to subvert ‘electors’ to make this happen, and the supposedly anti-war Green Party leads a massive recount effort … apparently all to protect bloated defense budgets.

    We live in a surrealistic world, where what once was black is now white and vice-versa. Back even 6 years ago, I’d never have imagined that the leader who at least balks a bit on giving war contractors a blank check would have come from the Republican side. Nor that the anti-war left would be so strongly opposed to this.

    • Eileen Kuch

      Strange world, isn’t it, Pooney? Indeed, it is. It’s been flipped upside down by the Loony Left, who had abandoned Bernie Sanders after his loss in the primaries and supported his evil, crooked rival, Hillary Clinton.
      Now, the Loony Left you and I speak of aren’t the ordinary Millennials who were disappointed and angry with their idol’s loss. These Millennials, on the most part, stayed home during the general election campaign; the rest voted for Donald Trump.
      As you said and I agree with, Pooney, we do live in a surrealistic world, where what once was black is now white and vice-versa. Even 6 years back, I, too, wouldn’t have imagined that the leader who at least balks a bit on giving war contractors a blank check would’ve come from the GOP side .. Nor that the anti-war left would be so strongly opposed to this. This is definitely the surrealistic world wherein we live.

      • Mork

        “Looney Left,” “evil Hillary,” go back to reading your right wing websites. Name calling and stupid nicknames add nothing to serious conversation and frequently lead people to discount what you’re saying, as you’ve been spoonfed by your alternative media just as surely as the ones who suck down MSNBC and CNN.

    • Mork

      Most of the left, seemingly, doesn’t seem to prioritize the anti-war effort as highly as they do other things. Trump is a mixed bag on the anti-war front anyway, as he took all positions on the campaign trail, says he’ll stop funding radicals in Syria, but then appoints multiple cabinet members who have a bone to pick with Iran. Says he’ll pump up the military budget, which as anyone who’s been frequenting this site, is the size of the next 9 military budgets combined, so that seems more than a little unnecessary.

      The bulk of the Left has a serious problem with someone taking the office who is morally bereft and socially inept as Trump – the same party which tried to impeach a sitting President not 20 years ago for lying about receiving oral sex now has a President who has bragged about how he mistreats women on video, who has had 3 wives, has shafted dozens of contractors and workers over the years and gets away with it because he has a huge legal team which no one can afford to fight, has used the bankruptcy laws to walk away from disasters and leave others holding the bag while he keeps his riches, and also has no filter between what he thinks and what he says. And this is the man who is going to be representing this country for the next 4 years – a narcissistic, classless, bullying, sexist billionaire who tweets every time someone mildly offends him. I’m no fan of Hillary, I think they’re both awful for different reasons, and I am very unhappy that her connections allowed her to steamroll herself into the Democratic nomination, but that’s pretty much why they don’t want him as our President. It has nothing whatsoever to do with the wars.

    • Strider73

      . . . and instead put in a known-to-be corrupt leader who’s never met a defense budget increase she didn’t like.

      And who we now know badgered Slick Willie into launching the Wag-the-Dog War in the Balkans. Sounds like perhaps she was the real president back then, just as Cheney was afterwards (and Lieberman would have been in a so-called Gore administration).

  • Mork

    It gets more recognition when a big media star says it. If Kanye or Lebron James had complained about it, the same thing might have happened. But, as other commentators here have already mentioned, he has very little actual power to do anything. All he can do is browbeat Congress, but they’ll most likely ignore him as the defense contractors continue shoveling them and their districts money, with promises of lucrative board and think tank positions after they leave office. Impossibly, what needs to be done is to get the money and quid-pro-quos out of politics, establish term limits, and make it an actual representative body rather than the current bunch of self-serving wastes of oxygen.

  • Mark Thomason

    One reason for the cost overruns is the spreading around of work to districts for political reasons, to gather up support in Congress. Those are not just overruns, they are political pork. Congress may say it hates overruns, but it loves pork.

    This has been a political tool of the military ever since the original 18th Century Navy contracts for wooden frigates were spread one-by-one around the states, with a Navy Yard for each. Of course that was the most expensive way to buy a few frigates, but it was pork. It was long-term investment in support for the Navy, for each of those new Navy Yards.

    We did need more than one Navy Yard, for strategic reasons. We did not need one for every ship. Likewise, we need subcontractors in such a huge project, but we don’t need one in every Congressional district that has one now, including Israel.