Donald Trump Targets F-35 Program in Latest Dig at Defense Spending

By

Damian Paletta and

Doug Cameron

Updated Dec. 12, 2016 12:50 p.m. ET

Donald Trump took aim at the Pentagon’s costliest program on Monday, saying on Twitter the “program and cost” of the F-35 Joint Strike Fighter “is out of control.”

This is the second defense program in recent days the president-elect  has unloaded on for cost issues. Last week, Mr. Trump claimed the government’s second-largest defense contractor, Boeing Co., had run up costs in the development of new Air Force One aircraft. The developer of the F-35 program is the government’s largest defense contractor, Lockheed Martin Corp.

“Billions of dollars can and will be saved on military (and other) purchases after January 20th,” Mr. Trump wrote on Twitter, referring to the day he is sworn in as president.

The comment was similar to criticism Mr. Trump made on Sunday, when he said on Fox News that the F-35 program was “out of control.”

“We welcome the opportunity to address any questions the president-elect has about the program,” said Jeff Babione, Lockheed’s general manager for the F-35 program. “We understand the importance of affordability and that’s what the F-35 has been about.”

Mr. Trump didn’t mention Lockheed or any other company by name on Monday. He hasn’t said how he would push down costs.

Just about every defense contractor except Boeing has exposure to the F-35 program. Northrop Grumman Corp., a major F-35 supplier, led an early slide in defense stocks after the president-elect’s latest attack on industry costs. Lockheed Martin and F-35 suppliers United Technologies Corp. and BAE Systems PLC also were lower.

The industry trade group, Aerospace Industries Association, said its staff met with Mr. Trump’s defense transition team on Monday and expressed confidence in the industry’s ability to tackle concerns raised by the incoming administration.

Mr. Trump met with the trade group and some defense chief executives in June, but didn’t raise concerns about cost growth in military programs, according to an AIA spokesman. That 40-minute meeting focused on the impact of budget cuts and efforts by some in the industry to reduce regulatory controls, the spokesman said.

Dave Melcher, the former Exelis Inc. chief executive, is a close friend of Gen. James Mattis, the presumptive nominee for defense secretary.

Mr. Trump frequently criticized the F-35 program on the campaign trail.

The Pentagon plans to buy more than 2,400 planes to replace many of its combat jets, but they are entering service years late and costs doubled to almost $400 billion because of design and production problems.

The F-35 Joint Strike Fighter is also known as the Lightning II, and the Government Accountability Office has said it is the Pentagon’s “most costly acquisition program.”

The F-35 survived two presidents and fierce criticism from lawmakers as well as many in the Pentagon, partly because military chiefs who touted its advanced features said costs were being brought under control.

Lockheed Martin beat out Boeing to win the deal to build the F-35 in 2001, and the program has been beset with delays and cost increases. The Pentagon wanted three versions of the plane, forcing design compromises, and built aircraft that had to be expensively revamped after problems were discovered.

The Air Force version was designed to use runways while the Marine Corps version can take off and land vertically like a helicopter. A third version to be used by the Navy was designed to launch with a catapult off an aircraft carrier and land with a hook.

In 2009, the Obama administration called for the F-35 to replace the F-22, championing it as less expensive. But design problems and other issues began to drive up the costs. The pilot’s helmet alone could cost around $400,000, according to reports.

Since 2012 the overall costs of the program have stabilized and production costs have dropped with each new order.

Since winning the election, Mr. Trump has shown a willingness to single out specific companies for praise or criticism, something his advisers have said will continue once he becomes president. After he attacked Boeing last week, Mr. Trump spoke several hours later with Boeing Chief Executive Dennis Muilenburg, and Mr. Trump said he would personally negotiate the costs of the Air Force One contract or he would refuse to agree to purchase new planes.

Mr. Trump’s tweet is also a new shot across the bow of United Technologies Corp., whose jet engine unit, Pratt & Whitney, is the sole supplier of engines for the F-35â€"and an important contributor to the fighter’s overall cost.

United Technologies also owns air conditioner and furnace maker Carrier Corp., which Mr. Trump sharply criticized during the campaign for a plan to send jobs to Mexico. After the election, the company struck a $7 million deal with the state of Indiana, brokered in part by a phone call from Mr. Trump to United Technologies Chief Executive Gregory Hayes, to keep about 800 jobs in Indiana, while still sending roughly 1,300 to Mexico.

United Technologies declined to comment.

â€"Ted Mann contributed to this article.

Write to Damian Paletta at damian.paletta@wsj.com and Doug Cameron at doug.cameron@wsj.com

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