The Pentagon has struck a deal with Lockheed Martin for the purchase of 90 F-35 stealth fighter jets at a cost that adds up to nearly $9 billion, finishing up negotiations highlighted by President Donald Trump’s threats to walk away.
It’s the latest order in what’s expected to amount to nearly $400 billion in sales for Lockheed Martin, involving thousands of the jets.
This round, known as Lot 10, marks the first time that the per-jet purchase price for an F-35A has been below $100 mlilion. Lockheed Martin said Lot 10 reflects a $728 million reduction in the total price, compared with the previous lot.
The cost reduction is basically in line with what Lockheed Martin and Pentagon officials were expecting, even before Trump started complaining about the program last December.
But Lockheed Martin acknowledged in a statement that “President Trump’s personal involvement in the F-35 program accelerated the negotiations and sharpened our focus on driving down the price.”
“This is a good deal for the American taxpayer, our country, our company and our suppliers,” Lockheed Martin said.
— Lockheed Martin (@LockheedMartin) February 3, 2017
The Pentagon echoed Lockheed Martin’s assessment.
“The LRIP-10 contract is a good and fair deal for the taxpayers, the U.S. government, allies and industry,” Lt. Gen. Chris Bogdan, F-35 program executive officer, said in a statement. “We continue to work with industry to drive costs out of the program.”
The deal covers 44 of the conventional F-35A variant for the U.S. Air Force, nine F-35B jump jets for the Marines, and two F-35C carrier jets for the Navy. The other 35 jets will be sold to U.S. allies, including Britain, Norway, Australia, Turkey, Japan, Israel and South Korea.
Lockheed Martin listed the approximate prices as $94.6 million for the F-35As, $122.8 million for the F-35Bs, and $121.8 million for the F-35Cs. Tallying up the totals for all the jets, including the sales to allies, results in a figure of $8.9 billion. Deliveries are to begin in early 2018.
Just last week, the Pentagon ordered budgetary reviews to follow up on Trump’s concerns about the F-35 as well as plans to replace the presidential Air Force One jets with new Boeing 747 jets.
The outcome of the F-35 negotiations hints at how the Air Force One negotiations with Boeing are likely to turn out, with both sides reporting that they’re saving money for the taxpayers.
Lockheed Martin’s share price was up slightly after the deal was announced.