How Trump Learned to Stop Tweeting and Love the F-35

No, he didn't actually save $600 million. But it's good to have a president thinking out of the box on military contracts.

A very cool $102 million.

Photographer: Jack Guez/AFP/Getty Images

How did we get from here:

To here? 

“The F-35 fighter jet — a great plane by the way, I have to tell you, and Lockheed is doing a very good job as of now,” Trump said Monday at a meeting with small business leaders at the White House. “There were great delays, about seven years of delays, tremendous cost overruns. 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.”

President Donald Trump has a solid, if factually challenged, answer. "We cut approximately $600 million off the F-35, and that only amounts to 90 planes, out of close to 3,000 planes," he told the press on Jan. 30. He was referring to the new contract for the next "tranche" purchase of the fifth-generation fighter, of which 76 are intended for the U.S. Air Force and foreign clients, while 14 are designed for carrier deck or vertical takeoff and landing for the Navy and Marines.

But as many Pentagon reporters have pointed out, this cost savings was long expected: The Air Force general in charge of the contract predicted last year that the price of the plane would drop by 6 percent to 7 percent in this round of purchases, known as Low Rate Initial Production Lot 10. Since the tranche will total nearly $10 billion, that's just about what Trump was bragging he had bargained out of Lockheed Martin. (In what seems a bit of overzealous obsequiousness, the company credited "Trump's personal involvement" for sharpening a newfound "focus on driving down the price.")

Trump's bogus claim aside, we can at least hope he learned a little bit about the complexities of Pentagon acquisitions and the plans for the fighter fleet. First, his tweet that building more F/A-18's was a possible alternative to the F-35 was truly ignorant. The Super Hornet is a fine and fast plane, but one conceived in the 1970s. Because it lacks stealth technology, it is simply not capable of the wide range of missions in contested air space for which the F-35 has been designed.

Yes, the F-35 has a troubled past, coming in years behind schedule and way over budget. But all that is, unfortunately, pretty much expected in military contracts. The bottom line was in essence doomed from the start: Unusually, the plan was to put the aircraft into production long before all the research and development was completed, and then retrofit existing planes with new technology. This strategy, called "concurrency," was supposed to save time and money, but ended up gobbling both, and the government was stuck with most of the bill for Lockheed's cost overruns.

Critics point to the new plane's limited speed, turning ability and range as drawbacks, but it is a multi-mission wonder whose cutting-edge software allows it to work collaboratively with the pilot to make up for any performance shortcomings. (There were also rumors Team Trump would look at the F-22 Raptor, a stealthy fighter, as a potential F-35 alternative, but given that the plane has been out of production for years, simply re-starting the lines would have been cost-prohibitive. Its average cost per flight hour is $68,000, more than double the rate of the F-35.)   

All this said, there is a silver lining to Trump's ill-informed tweeting: It does put the military and prime contractors on notice that the new president isn't taking anything for granted in terms of what has been a far-too-cozy producer-customer relationship for decades. This out-of-the-box mindset will be valuable as the Pentagon takes bids on its next two major aeronautical contracts: the B-21 Raider long-range strategic bomber and the T-X training plane, which are expected to total more than $65 billion. At the very least, the new administration should be able to put the onus on Lockheed and the rest of the "defense-industrial base" to take responsibility for cost increases during the production phases, and perhaps during earlier research and development as well.

It is also getting to be decision time in several projects outside the air-superiority realm: the ballistic-missile submarine that will replace the Ohio class, whether the Navy needs to drop the troubled Littoral Combat Ship and develop a new frigate, the necessity of building eight more lumbering Ford-Class supercarriers, the wisdom of developing a new nuclear-tipped cruise missile and intercontinental ballistic missile to replace the aging Minuteman III, and a host of other potential contracts.

And we're never going to get to serious cost savings looking at acquisitions alone: Nearly 70 percent of the Defense Department budget goes to personnel, operations and maintenance. With Trump insisting he wants to cancel planned troop cutbacks, this means looking hard at cutting back or charging more for the military's Cadillac-level health care plan, TriCare, and closing domestic bases. 

The F-35 looks increasingly like a sad tale that's going to have a happy ending. Yet even before it goes into service, the military is starting to think about the sixth generation of fighters: remotely piloted, artificially intelligent, hypersonic, radar-invisible planes with laser-beam weapons. Wrangling cost savings on the future of war looks like a job for the world's greatest negotiator.   

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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