President-elect Donald Trump launched his latest Twitter attack on the U.S. aerospace industry today, charging that the cost of the Pentagon's F-35 fighter is "out of control" and implying it will be an early target of his military reform efforts. He certainly is right that it is an expensive program, but that's because it was conceived to replace the Cold War fighters of three U.S. military services and eight allies. The trillion-dollar price-tag often associated with the program includes production and sustainment of 2,443 planes for the U.S. military over a 50-year period, and includes inflation estimates that are almost certainly wrong.
Trump's impulsive tweeting about subjects he does not understand threatens to erode his credibility before he is even inaugurated. Last week he said the program to replace Air Force One with a more modern, survivable plane was too pricey, when in fact nobody knows what the program will cost because the Air Force hasn't finalized its requirements for the program. The president-elect really needs to get a briefing on all the threats to his staff and family that dictate developing a more resilient executive jet.
In the case of F-35, though, Trump is cutting to the heart of future U.S. military capabilities. The joint force is counting on fielding a versatile fighter that can't be seen by enemy radar. If F-35 is delayed any more than it already has been by the Obama Administration, that could have grave consequences for our warfighters. It could also threaten the jobs of tens of thousands of workers employed by prime contractor Lockheed Martin and a vast network of subcontractors. Lockheed contributes to my think tank and is a consulting client, so I have followed the program closely. Here are five reasons Trump's tweet is likely to backfire.
F-35 isn't over-priced.The 757 jetliner that president-elect Trump owns listed for $65 million in 2002, which would be about $88 million today. The F-35 joint program office estimates the most common version of F-35 will cost $85 million in 2020, or less than Trump's own jetliner cost. That's a fraction of what a typical widebody jetliner like the Boeing 777 sells for, and nobody expects the 777 to evade hostile fire. Prices for the F-35 have been coming down with each successive production lot. However, if the program is delayed and the production rate does not ramp up, each plane will end up costing millions of dollars more than necessary.
F-35 isn't out of control.Every facet of the product life-cycle for military systems like the F-35 is shaped by thousands of pages of regulations that stifle innovation and drive up costs. By some estimates, compliance with laws and regulations adds 30% to the cost of U.S. weapons. So rather than being out of control, the F-35 is actually hyper-regulated. It tells you something about what it's like to work with the Pentagon that F-35 prime contractor Lockheed Martin has never gotten above a 9% profit margin on one of the most challenging technology projects in modern history.
There is no Plan B.Ironically, the F-35 program was conceived by the Clinton Administration to save money. It figured that buying three variants of one plane to meet joint-force needs would be less costly than developing three entirely different planes. It was probably right, but because it wrapped all of the military's tactical-aircraft requirements into a single development program, there is no backup if F-35 falters. Fortunately, the program is progressing steadily, satisfying all of its "key performance parameters," but if the effort slows then America's military might soon lose the ability to dominate skies in Europe and Asia. The latest Russian radars can easily track legacy fighters, so the U.S. needs more stealthy fighters fast.
Thousands of jobs are on the line.Roughly one in ten U.S. manufacturing jobs are related to aerospace and defense production. In fact, aerospace is one of the few technology sectors where the U.S. still enjoys a sizable trade surplus. That surplus will grow in the years ahead, because F-35 is poised to dominate global fighter markets for decades to come. In addition to meeting the needs of NATO allies, F-35 will also be sold to Israel, Japan and South Korea (not to mention others who haven't signed up yet). However, this bonanza of U.S. manufacturing jobs will disappear if Washington rethinks the project after spending 15 years getting to the point where it is ready for serial production.
America's allies are counting on F-35.One of the ways in which allies help defray the cost of national security is by purchasing U.S. weapons. InsideDefense.com reported on December 5 that 40% of the total buy in production lots nine and ten of the F-35 program will be for foreign customers. This doesn't just contribute to jobs and the trade balance, it also assures that U.S. warfighters and their foreign counterparts can mesh capabilities in wartime by operating similar tactical aircraft. F-35 is a huge success story for alliance cooperation, so the president-elect's tweet is going to renew worries in foreign capitals that something has gone wrong in Washington.
Trump can tweet whatever he wants. He's about to be president. But it would be better for both him and the nation if he got his facts straight before attacking a program that three presidents have worked hard to bring to fruition.
