Trump Is Taking Down The Military–Industrial Complex One Tweet At A Time
On Dec. 12, President-elect Donald Trump attacked the F-35 Joint Strike Fighter on Twitter, saying the cost of the next-generation...
On Dec. 12, President-elect Donald Trump attacked the F-35 Joint Strike Fighter on Twitter, saying the cost of the next-generation stealth plane is “out of control.”
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.
— Donald J. Trump (@realDonaldTrump) December 12, 2016
A presidential tweet can have some serious corporate repercussions: In subsequent trading, shares in Lockheed Martin, the company that produces the aircraft, dipped more than 4%, and its market value plunged by $4 billion, according to CNBC. To put that in perspective, it’s 1/100th the estimated cost of the weapons program itself, which some believe could reach $400 billion.
Lockheed isn’t the only one. Last week, Trump called out Boeing as well.
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!
— Donald J. Trump (@realDonaldTrump) December 6, 2016
Boeing secured a contract in January 2016 to start work on the 747 jets meant to replace the 25-year-old Air Force One planes, which will be phased in early next decade. And although its stock price dipped by 1% after the tweet, it has since recovered.
But companies across the country are feeling the sting of Trump’s Twitter attacks. Northrop Grumman is only a component producer on the F-35, and its stocks hit a one-month low as a result of the tweet. While these companies have more than enough financial capital to withstand such attacks, other smaller contractors may not be so resilient.
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Hopefully these companies fare better than the F-35 in a thunderstorm. Around the same time the president-elect was firing off his tweet, a pair of the stealth aircraft that were scheduled for delivery to Israel — the first installment of 50 planes that have been promised — were grounded for several hours in Italy due to bad weather.