On Tuesday, Lockheed Martin CEO Marillyn Hewson told reporters at the company’s annual media day that President Donald Trump’s involvement in the latest F-35 negotiations “absolutely” did make a difference in coming to an agreement on the contract at a lower price.
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“If you think about his focus and his long-term trend of increasing more spending in national security and on defense spending, the F-35 is the largest program that the Department of Defense has in its budget,” Hewson said. “So for him to focus on the F-35 and to focus on how he can get the best price for the taxpayer going forward, I think, was perfectly appropriate.”
She then said Trump accelerated the 10th Low Rate Initial Production (LRIP-10) contract which consisted of 90 F-35 jets, and helped get the price at $728 million less than the previous LRIP-9.
“He helped accelerate that along, and I think he put a sharper focus on price and how we drive the price down,” she added. “He absolutely did contribute to us getting to closure on that.”
Hewson added that she acknowledges that prices will continue to fall naturally in the future as well.
“I will admit that as we are wrapping up the program we will continue to see cost reductions just through volume,” Hewson said. She also noted that the program has a goal to make each F-35A $85 or lower by 2019.
Hewson also acknowledged “the President Trump effect,” which refers to Trump inspiring other NATO members to increase their own defense spending to ensure their own security.
“NATO members are considering the shifts of U.S. priorities, and many see a great need to shoulder more of their own defense burdens,” she said. “This is significant. In fact, if NATO members fulfill their own stated pledges to spend 2 percent of their GDP on defense, it could result in a $100 billion increase in spending across the alliance.”
President Trump and the Trump administration have been critical of NATO members who they do not believe are contributing enough money. In February, Secretary of Defense Jim Mattis told NATO allies that if they did not contribute a fair amount that the U.S. would “moderate its commitment.”
“No longer can the American taxpayer carry a disproportionate share of the defense of Western values,” Mattis told allies at his first NATO defense ministers’ meeting. “Americans cannot care more for your children’s future security than you do. Disregard for military readiness demonstrates a lack of respect for ourselves, for the Alliance, and for the freedoms we inherited, which are now clearly threatened.”