Updated 12/21/16 at 7:39 PM EST with comments from Trump and Hewson.
WASHINGTON – The CEOs for Lockheed Marin and Boeing met Wednesday with president-elect Donald Trump, with Boeing head Dennis Muilenburg offering Trump his personal promise that the Air Force One replacement program will not exceed $4 billion.
In addition, the president-elect said he was negotiating with Lockheed to get cost reductions "done beautifully" on the F-35 joint strike fighter.
Lockheed and Boeing are not just the first and second largest defense contractors in the world, but also share the dubious distinction of having come under fire from the president-elect's Twitter account over the cost of the F-35 and Air Force One programs, respectively.
Muilenburg and Lockheed head Marillyn Hewson had individual meetings with Trump at his Mar-a-Lago resort in Florida, with Muilenburg visiting the president-elect first. Afterwards, he told reporters that the meeting was "very productive" and said he was "really encouraged" by the "good, open discussion," according to a pool report.
While a "range of topics" were addressed, Muilenburg acknowledged that Trump's comments about the Air Force One program were a major part of the discussion.
At 8:52 a.m. EST on Dec. 6, Trump sent out a tweet stating: "Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!" Boeing's stock quickly dropped following the tweet, but recovered later that day.
Asked by a reporter if Muilenburg believes he can get under the $4 billion figure cited by Trump (one which has been debated by defense budget experts in the weeks since), the Boeing head expressed confidence.
"We’re going to get it done for less than that, and we’re committed to working together to make sure that happens. And I was able to give the President-elect my personal commitment on behalf of the Boeing Company," Muilenburg said. This is a business that’s important to us. We work on Air Force One because it’s important to our country and we’re going to make sure that he gets the best capability and that it’s done affordably.
"That’s what we’re going to work on together. We have an active 747 production line and we’re eager to get started on the program. We haven’t actually started the build of the airplane yet, but once we finalize the requirements and make sure that it’s affordable we’ll launch on building the aircraft. We’ve got a hot production line and we’re ready to go."
Six days later, Trump took to Twitter to criticize another Pentagon program – the Lockheed-led F-35 joint strike fighter, sending out a 6:26 a.m. EST, tweet that "The F-35 program and cost is out of control. Billions of dollars can and will be saved on military (and other) purchases after January 20th."
It was not the first time Trump had criticized the F-35, but the statement obviously carried more weight for investors now that he is president-elect. Lockheed’s stock dropped from $252.33 at opening and to a low of $245.70 around noon before stabilizing.
Earlier in the day, Trump met with a handful of generals, including Lt. Gen. Chris Bogdan, the F-35 program head. Bogdan remains a fierce advocate for his program and has defended it against accusations of being a problem program in the past. Those generals apparently stuck around until the end of the day, when Trump emerged from his meeting with Hewson and made a brief appearance with the uniformed officers. The pool report indicated that one of the generals was holding a trio of F-35 models. That particular general was unnamed, but was likely Bogdan.
"Trying to bring costs down—costs. Primarily the F-35, trying to get the costs down. A program that is very, very expensive," Trump said in response to questions from reporters. Asked specifically about any concessions from Lockheed, Trump said "We're just beginning, it's a dance. It's a little bit of a dance. But we're going to get the costs down and we're going to get it done beautifully."
"And these are great people," he said of the generals around him. "These are amazing people and I'm very impressed with them. And they are good negotiators."
Trump was asked if the meeting with Muilenburg was productive, and struck the same tone as the Boeing CEO.
"I think so. We had the chairman of Boeing, the CEO, and I think we're looking to cut a tremendous amount of money off the program," Trump said.
Hewson left the meeting with Trump without speaking to press, but put out a statement from Lockheed's Twitter account calling the meeting with Trump "productive" and noting the progress the company has made in dropping costs.
Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.
