Industryweek 13967 Lockheed F35 L 595

BAE Says Trump Seeking at Least 10% Cut in F-35 Fighter Cost

Jan. 18, 2017
Roger Carr, chairman of BAE Systems Plc, which is a key participant in the program:  “We respect that and we’ll work towards a contribution towards that.”

U.S. President-elect Donald Trump has asked Lockheed Martin Corp. (IW 500/25) to reduce costs on the $379 billion F-35 fighter-jet program by at least 10%, according to Roger Carr, chairman of BAE Systems Plc, which is a key participant in the program.

“We’ve been told through Lockheed that the president has an ambition to reduce the cost of that aircraft by a material amount of money, many percent, into double digits over a period,” Carr said in a Bloomberg Television interview Tuesday from the World Economic Forum in Davos, Switzerland. “We respect that and we’ll work towards a contribution towards that.”

Trump has targeted defense contractors including Lockheed and Boeing Co. for what he says are excessive expenses on government projects. Marillyn Hewson, Lockheed’s chief executive officer, has met twice with Trump after he attacked the company on the F-35 jet, the largest U.S. weapons program. The program for more than 3,000 fighters started development in 2001 and the 200th aircraft was delivered Jan. 11.

BAE, Europe’s biggest defense company, is teamed with Lockheed and Northrop Grumman on delivering the F-35 program and also has a 15% work-share on each plane, excluding the propulsion system. It makes the fuselage, tail and wing parts and oversees production of the fuel, ejection and life-support systems and elements of weapons integration.

Hewson told Trump last week that Lockheed is close to a deal with the Pentagon to lower costs “significantly’’ on the next and largest production lot yet of F-35s.

By Benjamin Katz and Erik Schatzker

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