Citing the involvement of President Donald Trump, Lockheed Martin announced Friday the new batch of F-35 fighters ordered by the government will be supplied at the lowest price in the history of the program.
The deal Lockheed and the Defense Department agreed upon brought the price per jet to below $95 million for the first time, compared to $102 million in the previous batch, a savings of $728 million for the entire order.
Another win! $700 mil saved on F35 deal
Pentagon strikes new F-35 deal with Lockheed after Trump involvement | https://t.co/omX80sXHQe
— ScrumpTheDeplorable (@ScrumpTheTexan) February 4, 2017
Lockheed Martin said in a statement that “President Trump’s personal involvement in the F-35 program accelerated the negotiations and sharpened our focus on driving down the price.”
The savings announced by Lockheed exceeds what Trump said only days ago would be saved in the newest round of F-35 purchases.
“We cut approximately $600 million off the F-35 fighter, and that only amounts to 90 planes out of close to 3,000 planes,” Trump said on Monday.
“There were great delays, about seven years of delays, tremendous cost overruns,” Trump said. “We’ve ended all of that and we’ve got that program really, really now in good shape, so I’m very proud of that.”
That was a far cry from Trump’s angry December tweet about the program.
The F-35 program and cost is out of control. Billions of dollars can and will be saved on military (and other) purchases after January 20th.
— Donald J. Trump (@realDonaldTrump) December 12, 2016
Since that time, Trump has met several times with Lockheed chief executive Marillyn Hewson.
“The agreement represents $728 million in savings and a nearly 8 percent reduction in price over our last contract for the air vehicle delivered by Lockheed Martin and our industry partners,” Lockheed Martin said in a statement. “This is a good deal for the American taxpayer, our country, our company and our suppliers.”
Lt. Gen. Chris Bogdan, F-35 program executive officer, also described the deal as fair “for the taxpayers, the U.S. government, allies, and industry.”
“(W)e are substantially bringing the cost of each aircraft down, and at the same time the F-35 program will continue to add thousands of additional jobs to the U.S. economy as we increase production year over year,” said Jeff Babione, Lockheed Martin F-35 vice president and general manager, in a statement.
The deal does not mean the end of Lockheed’s work to limit costs, said one analyst.
“I’d say it’s pretty aggressive price reductions,” said Morningstar analyst Chris Higgins. “The key is Lockheed needs to reduce the costs at a faster rate than they are cutting the price.”
“They were expecting margin expansion on it,” said Higgins. “This could potentially put that in jeopardy.”
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