WASHINGTON —Lockheed Martin is nearing a deal with the Defense Department on the tenth batch of F-35s, company CEO Marillyn Hewson told President-elect Donald Trump during their second meeting on Friday.

"I'm glad I had the opportunity to tell him that we are close to a deal that will bring the cost down significantly from the previous lot of aircraft to the next lot of aircraft," she told reporters after leaving the meeting at Trump Tower in New York. "I also gave him some ideas on some things we think we can do to drive down the cost on the F-35 program."

Hewson added that the company intends to increase its production facility in Fort Worth, Texas, by 1,800 jobs, although she did not elaborate on whether those positions were part of Lockheed's original plans for ramping up production or a result of a deal with the government.

The government forced Lockheed to accept a $6.1 billion contract for the ninth lot of 57 aircraft, which set unit prices for an F-35A at about $102 million, an F-35B at about $132 million, and F-35C at about $132 million per copy. F-35 program head Lt. Gen. Christopher Bogdan told reporters in December that he expected prices to come down even further, about 6 to 7 percent, in the lot 10 agreement for about 90 jets.

F-35 Joint Program Office spokesman Joe DellaVedova declined to characterize whether the the JPO was closing in on a contract agreement with Lockheed. 
"Negotiations for the next lot of aircraft for f-35 aircraft continue, and the joint program office remains focused on getting the best deal for the warfighters and customer," he said.  

Hewson met previously with Trump on Dec. 21 at his Mar-A-Lago resort in Florida, while Boeing head Dennis Muilenburg had a separate meeting with the president-elect that day. During the discussion, Hewson gave her personal commitment to Trump to "aggressively" drive down the costs of the joint strike fighter.  

"I had a very good conversation with President-elect Trump this afternoon and assured him that I’ve heard his message loud and clear about reducing the cost of the F-35," she said in a statement.

But just days later, Trump fired out a tweet that seemingly called for an upgraded F/A-18E/F Super Hornet, with a smaller F-35 buy in the realm of possibility.

"Based on the tremendous cost and cost overruns of the Lockheed Martin F-35, I have asked Boeing to price-out a comparable F-18 Super Hornet!" he tweeted on Dec. 23.

Since then, the president-elect has softened his rhetoric on Boeing’s Air Force One offering — his initial weapons program of choice for expressing displeasure with the defense industry — and repeatedly slammed the F-35 costs while expressing interest in the Super Hornet. During his first press conference of the new year, he told reporters to expect "big things" for the F-35 and F-18 programs, adding that he would "get those [F-35] costs way down."

Trump hasn’t been the only government official taking a tough approach with Lockheed in recent weeks. Frequent F-35 critic Sen. John McCain, the Arizona Republican who chairs the Senate Armed Services Committee, sent a letter to Hewson on Jan. 10 chiding the CEO for recent schedule slippage and cost overruns.

"If the Lockheed Martin Corporation has new initiatives that are ‘ready to deliver’ to reduce F-35 program costs, I expect you to detail your plans for accomplishing this objective to the committee as soon as possible," McCain wrote.

Outgoing Pentagon weapons tester Michael Gilmore fired his own parting salvo earlier this week, his final report on the F-35 program. The scathing 62-page document contends that the JPO’s belief that it can end developmental flight test as early as February 2018 with only a $532 million cost overrun is overly optimistic. Instead, Gilmore’s office predicts testing will extend to July 2018, and cites the Pentagon’s Cost Assesment and Program Evaluation (CAPE) office’s estimate of $1.125 billion needed to complete the development phase.

About Valerie Insinna

Valerie Insinna is Defense News' air warfare reporter. She previously worked the Navy/congressional beats for Defense Daily, which followed almost three years as a staff writer for National Defense Magazine. Prior to that, she worked as an editorial assistant for the Tokyo Shimbun’s Washington bureau.

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