BUSINESS Donald Trump Presses Fight Over F-35 Jet Costs

Rising expense of fighter plane is in spotlight, but reining in military programs is a tall order

The Pentagon’s costliest programs to buy more than 2,400 planes to replace aging combat jets have long been viewed by experts and lawmakers as the most egregious example of cost overruns.

The cost of buying the F-35s from Lockheed Martin Corp. has doubled from initial estimates to nearly $400 billion, and the planes are still years late. Operating costs bring the bill to above $1 trillion.
.. While the average cost of each F-35 has fallen about 60% since 2012 to around $110 million, roughly 80% of planned cost savings are tied to higher production.
.. John McCain (R., Ariz.), for instance, has been pushing the Air Force to disclose the total contract award value for the B-21 Raider, a long-range stealth bomber under development by Northrop Grumman Corp.
.. The Defense Department’s annual procurement and research budget has averaged more than $160 billion during the past three years and its request could top $200 billion by the end of the decade
.. Only one big program—a revamp of the GPS led by missile specialist Raytheon Co.—was running more than 25% over budget this year

Trump Says U.S. Should ‘Cancel Order’ for New Air Force One, Citing Costs

President-elect Donald Trump on Tuesday suggested the U.S. government should cancel a planned order with Boeing Co. for planes to serve as the new Air Force One

.. In a Twitter post Tuesday, Mr. Trump said the cost for a new “Air Force One” plane for future presidents was “more than $4 billion. Cancel order!”

 .. Boeing is the second-largest Pentagon contractor after Lockheed Martin Corp.—which is building the fleet of new helicopters that will serve as Marine One—and makes fighter jets, surveillance planes, bombs and other systems that generated sales of almost $19 billion from the Pentagon last year, a fifth of its total revenues.
.. The development deals include proposed modifications to the aircraft, from sophisticated communications equipment to other upgrades such as antimissile devices, according to experts.

.. The Air Force earmarked $1.65 billion between 2015 and 2019 to develop two replacement jets, and said it may acquire up to three.

.. The Air Force has previously specified it needed a four-engine plane to serve as Air Force One. Airbus Group SE is the only other maker of such jets
.. Boeing’s 747-8 carries a list price of $378 million

Defense lobbyists deluged in wake of Trump victory

K Street scrambles to prepare for an administration it spent little time planning for.

Defense lobbyists are getting a flood of calls from longtime clients and new prospects eager to take advantage of a potential military buildup under President-elect Donald Trump — but also fearful he will spark a trade war and jeopardize their lucrative arms deals.

.. He said there is a sense that Trump’s history in business could help defense companies and their supporters on Capitol Hill to negotiate with his administration in a way that has been more difficult in the Obama years.

.. Defense industry executives fear that by making it more difficult for the U.S. military to acquire goods it needs from overseas manufacturers, foreign governments will retaliate by shutting out U.S. contractors.

.. “Do whatever you want to the rest, but we’ve got a $60 billion defense surplus here and exports are important.”

.. “I believe it’s the only trade surplus left that the U.S. still enjoys. In this, a lot of good paying U.S. jobs are created.”

.. Oshkosh is among a number of leading Pentagon contractors who are heavily reliant on international sales, reporting last week a 22.2 percent jump in quarterly earnings largely due to “higher international sales in the defense segment.”

In another sign of the growing importance of foreign arms sales, Lockheed Martin, the world’s largest defense company, reported last month that international sales are on track to account for 25 percent of annual revenue later this year and 30 percent in the next few years.