Posted on 12/25/2016 9:12:59 AM PST by Mariner
U.S. President-elect Donald Trump heaped pressure on Lockheed Martin Corp on Thursday, saying he viewed costs for the aerospace company's F-35 fighter as too high and had asked Boeing Co to offer a price for an older aircraft that lacks the same stealth capabilities.
Trump posted his Twitter message a day after the president-elect met with the chief executives of both aerospace companies, using the bully pulpit to press them on projects he says are too expensive.
In after-hours trading following Trump's tweet, Lockheed shares fell 2 percent and Boeing's rose 0.7 percent.
"Based on the tremendous cost and cost overruns of the Lockheed Martin F-35, I have asked Boeing to price-out a comparable F-18 Super Hornet!" Trump said.
Lockheed declined to comment. The F-35 program is a critical sales generator for the company, accounting for 20 percent of last year's revenue of $46.1 billion.
(Excerpt) Read more at reuters.com ...
Asking Boeing for a bid is a wise move and we can expect Lockheed to come back with a proposal to significantly reduce costs while preserving the vast majority of critical capabilities.
These types of negotiations have historically been done by Pentagon procurement "professionals" who know next to nothing about what they are buying, how much it costs and what alternatives may be available.
Or, whether that one "must have" feature listed by the Air Force...and which drives up costs 21%...is really and truly a must have. They also have enormous incentive to not even ask the question, or to accept any answer given...as Lockheed has a standing employment offer to them as a "Special Consultant"...and to their wife and kids as well.
“Or, whether that one “must have” feature listed by the Air Force...and which drives up costs 21%”
If that must have is what the rumors say it is, it is worth every penny.
Drones will be so much cheaper. Seems crazy to spend $85 million a copy for the last generation of gun fighters with what is on the horizon.
“If that must have is what the rumors say it is, it is worth every penny.”
I don’t know what the rumors say, but the hard questions must be asked, and detailed answers supported by data must be delivered.
Then the procurement process can proceed based on a rational cost-benefit decision.
“Drones will be so much cheaper. “
Drones are a major component of the F-35 combat system. You just haven’t seen much on this element yet.
The F-35 will have the ability to command several of these:
https://en.wikipedia.org/wiki/Northrop_Grumman_X-47B
Fully integrated with all systems in real time. When the pilot sees a target in his helmet visor, he will not know if it was sensed by his drone or the aircraft’s own systems...and when he hits the button to take it down, he will not know which platform launched the missile.
This just points out how unqualified Trump is.
He’s going to run government like a business, doesn’t he know that government’s only purpose is to be a cash cow for the elites.
There is no doubt that the military procurement system is very broken. It is my sincere hope that the Trump team can overhaul it from top to bottom. Of course that is a monumental task - the biggest ever undertaken by man.
Magic features! That’s the ticket!
and the F-15 in some recent tests. There are people that think the tests were rigged in the F-35’s favor.
“Any sufficiently advanced technology is indistinguishable from magic.” Arthur C. Clark.
Ike must be smiling from wherever he is.
Using Boeing to pressure Lockheed, but also at the same time he's dangling this F-18 deal to pressure Boeing on AF-1, kind of a three-corner parlay.
Dunno how many planes each plant will build or what the mix will be, but I bet Trump wins again (along with taxpayers).
As a former LMT employee, I know that companies will and do use special features to carve out a market nitch. (In this case stealth.) It is worth a lot to have the enemy radar fail to lock on to you while you lock on to them. Get the picture?
However, this plane also defeated the Boeing entrant to the competition with its maneuverability and the fact that it can land vertically and take off on a short runway — the reason it cannot take off vertically has to do with the fuel on board at take off.
What the customer typically does when the cost rises due to unforeseen problems during production is order fewer planes. This is exactly what has happened to the F 35 but at the same time other governments are filling in with orders. LMT is in a stronger position than Boeing but if the government wants an adequate plane without stealth and vertical landing, then Boeing can fill the bill with a lower cost. Boeing will however also be susceptible to cost increases if problems are encountered in production.
As a Trump supporter, I have no problem with his negotiation to reduce cost, but this negotiation has a history and it “Not nice” to come and change the rules at this late date. Of course he can (and this has happened before) walk away and start a new negotiation and perhaps the government will not stipulate that the product must be stealthy or have particularly difficult landing and take off requirements. It is all part of contract law. Go for it.BTW, we all should understand that these contracts also contain termination penalties. I should also admit that I have seen LMT make serious contract blunders in the past. I hope they see a way to help Trump make this one a Win Win.
“Drones will be so much cheaper. Seems crazy to spend $85 million a copy for the last generation of gun fighters with what is on the horizon.”
Valid point; however, this reminds me of the early 1960’s when John Diefenbaker, the P.M. of Canada, scrapped the Avro Arrow fighter jet which was the best fighter jet in the air at the time. His reasoning was that with ICBM’s on the scene jets would be useless against them and hence are no longer needed. We now know jets are as prominent as ever.
“Drones are a major component of the F-35 combat system. You just haven’t seen much on this element yet.
The F-35 will have the ability to command several of these”
If I’m understanding he concept right, wow!
The is no way the taxpayer should pay for production problems or delays.
This is, of course, good theater but the real negotiation isn’t with Lockheed or Boeing. It’s with our military which is writing the specs.
It’s better PR for Trump than coming down on the armed forces but it won’t be effective until the military changes it’s procurement processes.
Commonality was a big selling point with 3 different versions, there is little commonality at this point.
The Marines did a real good job of this with the H-1Y/Z at around 85%.
The F- 35 has significantly under delivered and is way overpriced.
How much is an F-15 Silent Eagle costing nowadays?
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