On Monday, President elect Donald Trump extended his attack on defense contractors, criticizing Lockheed Martin’s F-35 fighter jet program as “too expensive”, he said and intends to keep pushing to cut the costs of military hardware.
“The F-35 program and cost is out of control,” Trump said on Twitter, echoing campaign promises to cut waste in federal spending. “Billions of dollars can and will be saved on military (and other) purchases after January 20th.” Trump also said on a radio interview, “When they are saying that this cannot perform as well as the planes we already have, what are [we] doing, and spending so much more money?”
According to Reuters, Trump also used Twitter to target Boeing Company (The) (NYSE: BA) last week for its “out of control” costs on a new fleet of Air Force One planes, urging the federal government to “Cancel order!” U.S. Senate Armed Services Committee Chairman John McCain backed Trump’s criticism of the F-35’s costs. McCain, who has voiced support for the F-35 in the past, said a U.S. president cannot cancel a program for which funds have been allocated, but can reduce its purchase over time. The verbal attacks on Boeing and Lockheed Martin raised concerns the Trump administration will threaten defense contractors’ profit margins.
Shares of Lockheed Martin Corp. (NYSE: LMT) dropped over 3 percent and other defense contractors also followed.