President Donald Trump today claimed credit for a $600 million price reduction in the cost of the F-35 jet fighter program, but it appears those cost savings were going to happen even without his jawboning.
Trump jumped into negotiations with the plane’s builder Lockheed Martin a few days before he officially took the Presidential oath of office, claiming the $379 million F-35 program, already behind schedule and suffering cost overruns, was “out of control.”
He spoke by phone with the Air Force General in charge of managing the program and met with the CEO of Lockheed Martin. In February Trump declared he was able to save the government $700 million on the cost of the jets.
Today, Trump said the saving would be $600 million, and bragged it was lower because of his hands-on involvement.
However, there is substantial evidence the cost was going to come down even without Trump’s involvement, according to a report by Popular Mechanics.
The way military development works is that the government initially orders a very small number of planes. As the kinks are worked out during the actual building process, and the number of planes being ordered goes up, it is common that the price per unit comes down. That is what is happening here.
“The F-35 is gradually becoming cheaper as Lockheed Martin discovers more efficient construction techniques and takes advantages of economies of scale, wherein the manufacturer can negotiate better deals for more materials, labor, and overhead,” reported Popular Mechanics in an analysis of the deal and savings.
“A 6 percent cost reduction would amount to $570 million shaved off that $9.5 billion total,” continued Popular Mechanics, “while a 7 percent reduction is $665 million. As such, Trump’s claimed $600 million cut is right in the ballpark of what the price reduction was going to be all along.”
A Bloomberg News report on February 15 suggested Trump was actually hurting the fighter development program by his interference.
“When a president ignores the chain of command by going directly to a program manager, it creates chaos in the system,” Loren Thompson, an analyst with the Lexington Institute in Arlington, Virginia, told Bloomberg News. “Behavior that looks decisive in the business world can unhinge a military organization that depends on order and discipline.”
So once again Trump is using the bully pulpit of the Presidency to made dubious claims that his own prowess as a businessman was saving the government money while interfering in ways that are inappropriate and may be disruptive.