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Trump


This past Friday Lockheed Martin Corp. (NYSE:LMTC) CEO Marilyn Hewson said she gave president-elect Donald Trump a “personal commitment” to reduce the price of the F-35 Joint Strike Fighter. Hewson’s comments were apparently in reaction to pressure from Trump for Lockheed Martin to lower the “tremendous cost” of the jet fighter in a tweet Trump sent Thursday.

Said Hewson, "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."

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Tweets Vs Share Prices

Trump’s tweet read, "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!" The tweet resulted in Lockheed Martin shares falling about 2%. The Boeing Co. (NYSE:BAC) shares rose by 0.5%, according to CNBC.

In response to the interchange Trump said, “It’s a dance. It’s a little bit of a dance, but we’re gonna get the cost down, and we’re gonna get it down beautifully. I think we’re looking to cut a tremendous amount of money.”

Air Force One

In early December Trump tweeted that the cost of the Air Force One replacement program was rumored at $4 billion, Boeing shares fell, then recovered. In the tweet Trump complained about the cost and threatened to cancel the government’s contract with Boeing.

If nothing else, the president-elect’s Twitter Inc. (NYSE:TWTRC) attack against Boeing brought to light the fact that projects like this are much more expensive than most people believe. This is because Air Force One is almost literally a “Flying White House” with high-tech features designed to the keep the president and his staff safe and allow him to command the national’s military from 20,000 feet in the air.

Tweet Or Truth

The Air Force estimates the 5-year total cost for the new Air Force One at $2.8 billion – not the $4 billion Trump suggested. That still makes it a very expensive aircraft. Operating expenses alone total $206,337 per hour when the plane is in the air.

The president’s plane does not fly alone. A fleet of cargo planes usually travel in front of Air Force One to provide services not available in all areas where the president travels. In addition to the president, members of the press, senior advisors, Secret Service agents and others must be accommodated aboard the aircraft.

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More Twitter Attacks On The Way

The president-elect’s Twitter storm against two defense contractors has caused other companies to take notice. In the process, many have realized they are woefully unprepared for negotiations via social media.

When the president sends out a tweet, millions of people see it and retweet it. So far Trump has used Twitter to express dismay about the cost of government contracts. What happens when he unleashes against a company set to move jobs or factories overseas? What if he uses his 140 characters to disparage a CEO who says something he doesn’t like?

It is likely corporations will begin to hire social media experts whose sole job will be to respond to attacks from the White House and others on Twitter, Facebook Inc. (NASDAQ:FBB) and elsewhere.



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