Trump is Now America’s Arms Deal Negotiator
Channel: Trump Breaking News Network
Date: 2017-01-02

Trump Breaking News Network - Trump is Now America’s Arms Deal Negotiator.

His meetings and bombshell tweets with the heads of America’s two largest weapon makers show Trump will play a role in hammering out contracts.

UPDATE: This article was amended from its original version following President-elect Donald Trump’s tweet calling for new pricing for the F/A-18 Super Hornet to compete with the F-35 fighter jet.  

Negotiations for the Pentagon’s next batch of 100 F-35 Joint Strike Fighters don’t technically resume until next month, but they’re clearly under way.

If the last few weeks serve as a precedent, a new, powerful player — the president of the United States — will replace Pentagon generals as the chief negotiator for multibillion arms deals.

Trump fired off a bombshell tweet Thursday evening saying that “based on the tremendous cost and cost overruns of the Lockheed Martin F-35” he as asked their competitor, Boeing, to “price-out a comparable” F/A-18 Super Hornet. If his prior tweets about the F-35 and high cost of Air Force One sent ripples waves throughout the defense industry, this one is a full-blown tsunami.

“We’ve never seen anything like this and have to admit there is a strong probability that the president-elect will be a very hands on government buyer,” Roman Schweizer, an analyst with Cowen, said in note to investors Wednesday evening after Trump met with some Pentagon brass and the CEOs of Lockheed Martin and Boeing at his Mar-a-Lago compound in Palm Beach, Florida.

Typically, in the case in the F-35, the general in charge of the project, Lt. Gen. Chris Bogdan, would negotiate with Jeff Babione, Lockheed Martin’s executive vice president and general manager of the program.

The tweet also shows how Trump was negotiating with Marillyn Hewson, Lockheed chairman, president and CEO, to talk about the F-35 and its high cost, which the president-elect called “out of control” last week.

“It’s a dance, you know, it’s a little bit of a dance,” Trump said. “But we’re going to get the costs down and we’re going to get it done beautifully.”

The Mar-a-Lago F-35 summit comes at a time of tense relations between the Pentagon and Lockheed. Last month, Pentagon negotiations gave Lockheed a $6.1 billion take-it-or-leave-it deal for 57 F-35s. Lockheed make no secret that it was unhappy with the deal and has until February to accept or reject it.

The music for that dance referenced by Trump will speed up soon when the Pentagon and Lockheed sit down in the middle of January to hammer out a deal for the next 100 F-35s. Earlier this week, Bogdan said the negotiations shouldn’t finish by Jan. 20 when Trump takes the oath of office, meaning he will be leading the dance.

“This raises the question of what kind of dance will play-out — something equivalent to a limbo, where Trump pushes for lower and lower prices resulting in [Lockheed] and its partners and subcontractors bending over backwards or something more akin to a waltz where the DoD and industry work together get at root causes of program costs,” Byron Callan, an analyst with Capital Alpha Partners wrote in a note to investors Thursday.

Hewson called the meeting with Trump “productive” and said she “appreciated the opportunity to discuss the importance of the F-35 program and the progress we’ve made in bringing the costs down.”



Source: 

http://www.defenseone.com/business/2016/12/trump-now-americas-arms-deal-negotiator/134146/?oref=d-topstory

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