Trump pits Boeing against Lokheed in move to cut defence costs
23 Dec 2016
President-elect Donald J Trump, who is unwittingly or otherwise getting more and more involved in the country's military spending, on Thursday suggested that Boeing give a price estimate for a new fighter jet comparable to Lokheed Martin's F-35, thereby pitting the two defence giants against each other.
Trump, while seeking a price estimates from Boeing for a fighter jet similar to Lokheed Martin's F-35, was in fact, trying to push down the cost of new fighter jets, according to military analysts.
Trump's post on Twitter on Thursday afternoon said that based on the ''tremendous cost and cost overruns'' on Lockheed's new F-35 strike fighter jet, he had asked Boeing to give him the price for a ''comparable'' version of its older F-18 Super Hornet.
The US Air Force order for the new F-35 fighter jets is a highly valuable contract for Lockheed Martin and Trump's criticism of the new jet fighter order as too expensive, pulled down Lockheed's share price by nearly 2 per cent in after-hours trading.
Trump's criticism also seemed to suggest that the F-35s and the F-18s are comparable, indicating in part that he is not yet fully grasped of the technical characteristics of the jets.
''The Super Hornet has been the US Navy's most successful carrier-based aircraft, but it doesn't reflect the latest technological refinements that the F-35 has,'' reports quoted defence consultant Loren B Thompson as saying.
Lockheed has built 200 F-35s, which have stealth protection that makes them less visible to enemy radar than earlier generations of planes. The F-35s can also fuse intelligence from many sensors and transmit it to other planes. The F-18s, however, can carry more weapons. Based on current prices, the F-18 costs roughly 30 per cent less than the F-35.
As the cost of the F-35 programme soared since its start in 2001, some Navy officials are worried that they could not afford as many F-35s as they would need. Analysts said the Air Force and the Marines still wanted the F-35, but the Navy had been headed toward a mix in which each carrier might have two squadrons of F-35s and two squadrons of F-18s.
It may be noted that Trump had, in early December, come out against the high cost of the new Air Force, which he said, are ''out of control'' and told reporters, ''Boeing is doing a little bit of a number.'' And, now, he is criticising Lokheed for the high cost of the F-35 contract.
Earlier this week, Trump had convened a meeting of top military officials and the CEOs of Boeing and Lockheed at his Mar-a-Lago estate to discuss how to bring costs down. Trump told reporters afterward, "We're just beginning, it's a dance.''
Trump, himself a businessman, knows well that the federal contracting is a technical, complex part of the government that is run by tens of thousands of career civil servants. No one has cared to look deeper into the rule-bound job, governed by the Federal Acquisition Regulations.
Trump, in fact, is trying to blow through the complex web of bureaucracy and federal rules to make government procurement easier and, in the process, reward his friends and eliminate enemies.
Most federal contracts also include a ''get-out-of-jail'' free clause that allows the government to break a contract for a wide variety of reasons. While that power is not unlimited, companies may find it difficult to prove that the government illegally violated the contract.
