U.S. Defense Secretary James Mattis ordered cost-cutting reviews of two major aircraft acquisition programs, the F-35 fighter jet and Boeing Co’s (BA.N) next-generation of Air Force One presidential plane.
President Donald Trump has derided Lockheed Martin’s (LMT.N) F-35 program as being too expensive.
The way Pentagon will go is two step: one looking at how to cut costs, and the other determining whether the F/A-18E/F, with improvements, could be an effective, cheaper alternative.
The costs for Lockheed’s F-35 program has escalated to an estimated $379 billion, which accounts for 20 percent of the company’s total revenue of $46.1 billion last year. This makes it the most expensive single military program of the US Armed Forces.
The review of the Air Force One replacement, which Trump has also called too expensive, would look at the plane’s requirements and systems and identify courses of action to reduce acquisition and sustainment costs. The target is for the replacement cost not to exceed $4 billion.