For the second time this month, President-elect Donald Trump has badly damaged the value of military contractor Lockheed Martin’s stock with a Tweet complaining about the excessive costs of the F-35 program, sending the stock down another $1.2 billion today.
Trump, who yesterday talked to top Pentagon generals about getting costs down, and bragged of having secured a pledge by Boeing to lower the final costs of Air Force One, is now courting Boeing for a competing bid on the F-35 program, asking how much it’d cost them to make the F-18 more or less comparable.
The F-35 program began in 2006 as an extension of the X-35 program from Lockheed, and over the last decade the costs have repeatedly spiked well above initial expectations. Boeing’s own proposal, the X-32, was rejected back in 2001, But Trump is now wondering if the existing F-18 could be modified into the role.
It’s unclear if such a conversion is a practical alternative, but reflects both Trump’s desire to try to play hardball with negotiations, and likely his interest in rewarding Boeing for promising to get costs down on the much smaller Air Force One program.
Since Congress is the one ultimately paying for these programs, and a lot of different Congressional districts have interests in the F-35, it would be very hard for Trump to sell a shift out of the program, but his ability to clobber Lockheed stock with a single tweet is likely to keep him at least active in the discussion.