After Trump attack, Lockheed Martin slashes F-35 cost

Updated 8:46 PM EST, Sat February 4, 2017
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(CNN) —  

Defense giant Lockheed Martin has agreed to sell 90 new F-35 fighter jets to the US Defense Department for $8.5 billion – a deal that amounts to more than $700 million in savings over the last batch of aircraft delivered.

Lockheed Martin credited President Donald Trump for helping to “accelerate negotiations” and “drive down the price” of what is already the most expensive weapons program in history.

The cost of the F-35 Joint Strike Fighter program found itself in Trump’s crosshairs on several occasions in recent weeks and Trump called for a review of whether a modified version of the older F/A-18 aircraft could replace the Navy’s costly F-35 variant.

Lockheed Martin CEO Marillyn Hewson gave then-President-elect Trump her “personal commitment” to cut the cost of the stealthy F-35 fighter jet after Trump posted a tweet criticizing the program and newly confirmed Defense Secretary James Mattis ordered the Pentagon to conduct a review of the $400 billion program last week.

Once official, the deal in principle would mark the first time that costs for any of the three versions of the fifth generation fighter jet will have dipped below $100 million per plane.

For this new batch of F-35s, the Air Force’s A version will cost $94.6 million, the B version flown by the Marines will cost $122.8 million, and the Navy’s C version will cost $121.8 million.

“The agreement represents $728 million in savings and a nearly 8 percent reduction in price over our last contract for the air vehicle delivered by Lockheed Martin and our industry partners,” Lockheed Martin said in a statement to CNN. “This is a good deal for the American taxpayer, our country, our company and our suppliers.”

Lt. Gen. Chris Bogdan, F-35 program executive officer, also commended the deal as fair “for the taxpayers, the US government, allies, and industry.”

But while the new agreement adds up to roughly $7 million in savings per jet over the last order, the extent to which Trump’s criticism impacted negotiations remains unclear.

The Pentagon has worked with Lockheed Martin to bring the costs down since the program was restructured in 2011. And indications are that the program was already on target for cost reductions through 2019.

“(W)e are substantially bringing the cost of each aircraft down and at the same time the F-35 program will continue to add thousands of additional jobs to the US economy as we increase production year over year,” said Jeff Babione, Lockheed Martin F-35 vice president and general manager, in a statement.

The newest F-35 contract includes 55 jets for the US military and 35 jets for international partners and foreign military sales customers.

The $400 billion price tag for the 2,443 planes in the US part of the program is double the original budget.

CNN’s Gabe Ramirez contributed to this report.