Trump asks Boeing to price out a comparable jet to compete with F-35 -- and Lockheed Martin's stock is tanking

F35bLockheed MartinAn F-35B from Marine Fighter Attack Training Squadron 501 (VMFAT-501), flies near its base a MCAS Beaufort, South Carolina.

WASHINGTON, DC — In response to a series of cost overruns and other development issues for the F-35 fighter jet, US President-elect Donald Trump said on Thursday he has asked Boeing to “price-out a comparable F-18 Super Hornet.”

Trump’s request — announced via tweet — came a day after meeting separately with the CEOs from Lockheed Martin and Boeing to discuss bringing the “costs down” on the F-35 fifth-generation stealth jet and the next fleet of presidential aircraft.

On December 12, Trump said the cost for Lockheed Martin’s fifth-generation stealth F-35 Lightning II jet was also “out of control.” The message sent Lockheed Martin’s stock down from $251 at the opening bell to $245.50, before it rebounded to a little more than $253 a share. Shares of Lockheed Martin fell 2.0% to $247.75 after hours, while Boeing shares rose 0.7% to $158.52.

“We’re trying to get costs down … primarily the F-35, we’re trying to get the cost down. It’s a program that is very, very expensive,” Trump said on Wednesday after meeting with Lockheed Martin CEO Marillyn Hewson. Trump said the negotiations with Lockheed Martin were “just beginning” and described it as “a little bit of a dance.”

“I appreciated the opportunity to discuss the importance of the F-35 program and the progress we’ve made in bringing the costs down,” Hewson said in a statement.
“The F-35 is a critical program to our national security, and I conveyed our continued commitment to delivering an affordable aircraft to our US military and our allies.”

The F-35 Lightning II, valued at an acquisition cost of $379 billion, has become one of the most challenged programs in the history of the Department of Defence. It has experienced setbacks that include faulty ejection seats, software delays, and helmet-display issues.

Australia has committed to buying 72 of the fighters to replace its current F-18 Hornets. Trump’s tweet said that he had asked Boeing to look at a modern F-18 program.

“The problems on this program quite frankly in the past were very simple. We were overly optimistic in the technical risk in building this leading edge fighter and so we put unrealistic schedules and budgets together and then when we ran into problems we did not manage them very well,” Lt. Gen. Chris Bogdan, head of the F-35 Joint Program Office, said during a briefing with reporters on Monday.

“I think that this program is vital for air dominance for us and our allies for the next 50 years. It replaces many, many, many legacy fleets, it has tremendous international participation and involvement, and it is a necessary program for the United States to maintain its security,” Bogdan added.

A little bit of background on America’s fifth generation jet (and its cost)

F35US Air Force PhotoUS Air Force F-35 Lightning II joint strike fighter crew chief, Tech. Sgt. Brian West, watches his aircraft approach for the first time at Eglin Air Force Base, Fla., July 14, 2011.

Manufactured by Lockheed Martin in Fort Worth, Texas, the fifth-generation “jack of all trades” aircraft was developed in 2001 to replace the ageing Navy, Marine Corps, and Air Force fleet.

The fighter is equipped with radar-evading stealth, supersonic speed, and “the most powerful and comprehensive integrated sensor package of any fighter aircraft in history,” Jeff Babione, the head of Lockheed Martin’s F-35 program, said in a statement.

We saw where America’s most expensive war machine gets a classified feature, but this is all we can tell you about it »

And for an enemy to engage an F-35 would be like jumping into a boxing ring to “fight an invisible Muhammad Ali,” as Gen. Tod Wolters, the commander of US Air Forces in Europe, told Business Insider.

In short, the F-35 gives pilots the ability to see but not be seen.

F35aCourtesy of Lockheed MartinAn F-35A performs a test flight on March 28, 2013.

What’s more, unlike any other fielded fighter jet, the F-35 can share what it sees in the battle space with counterparts, which creates a “family of systems.”

“Fifth-generation technology, it’s no longer about a platform. It’s about a family of systems, and it’s about a network, and that’s what gives us an asymmetric advantage,” Gen. David Goldfein, the Air Force chief of staff, said during a Pentagon briefing.

Elaborating on the advantages, US Air Force Brig. Gen. Scott Pleus, the director of the F-35 integration office, said the aircraft was “one our adversaries should fear.”

“In terms of lethality and survivability, the aircraft is absolutely head and shoulders above our legacy fleet of fighters currently fielded,” said Pleus, an F-35A pilot and former command pilot with more than 2,300 flying hours.

Developing …

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