Trump Tweet Shakes Up Defense Industry

He pits Boeing against Lockheed for new jets
By Rob Quinn,  Newser Staff
Posted Dec 23, 2016 5:30 AM CST
Updated Dec 23, 2016 6:27 AM CST
A US Navy Boeing-made Super Hornet jet fighter performs during the 48th Paris Air Show.   (AP Photo/Remy de la Mauviniere)
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(Newser) – He who pays the piper calls the tune, and it looks like the military-industrial complex is going to be dancing to Donald Trump's tune for years to come. Trump shook up the defense industry once again on Thursday when he tweeted about negotiations for fighter jets, pitting Boeing and Lockheed Martin against each other, reports Reuters. "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!" tweeted Trump, who has been holding meetings with aerospace execs at his Mar-a-Lago estate. Lockheed shares, which went down 4% after an earlier Trump tweet, dived 2% in after-hours trading, while Boeing was up 0.7%. A roundup of coverage:

  • Politico takes a close look at the implications of Trump involving himself so closely in the federal procurement process and turning it into a "$440 billion weapon." Presidents including Obama have used the process to advance their agendas, but experts say it's unprecedented for one to target individual companies and contracts the way Trump is doing—and his approach is likely to create great uncertainty for defense companies.

  • Business Insider looks at the F-35's capabilities—and the $379 billion contract for Lockheed to supply 2,443 of them to the military. Pentagon officials involved with the F-35 says the fifth-generation jet is far ahead of the Boeing plane, meaning it would take years of redesigning and testing for the Super Hornet to have the same capabilities.
  • The AP reports that Boeing spokesman Todd Blecher said: "We have committed to working with the president-elect and his administration to provide the best capability, deliverability, and affordability," while Lockheed declined to comment.
  • Bloomberg reports that Trump's action "sidelined decades of policy and practice in how the government spends billions of dollars annually on military hardware." A Teal Group military aircraft analyst tells Bloomberg that Trump's tweet was "bizarre," especially since only the Navy uses the Super Hornet, while the Marines are "completely dependent" on F-35Bs and the Air Force is sticking with the F-35A. "Thus, Trump's tweet is both late to the game and completely irrelevant."
  • Retired Rear Adm. Dave Oliver tells Politico that Trump's attempt to bring the tactics of the New York real estate market to military procurement will probably just drive prices up. "He will scare the bejesus out of some fifth-level auditor who is going to say, 'Goodness gracious, maybe I ought to look at whoever he is attacking at the moment,' says Oliver, who was a top Pentagon acquisition official in the 1990s. "Whether the president has any legal standing of any kind in this doesn't matter. That’s what the bully pulpit is all about. He is going to be heard and he is going to have an impact."
(Read more Donald Trump stories.)

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