President Donald Trump just shamed former President Barack Obama and saved American taxpayers $500 million with a major “MAGA deal.”
After tough negotiating and relentless pressure, Trump was able to drive down the price of the F-35 fighter jet by 25 percent, which is substantially lower than where it was under Obama.
The cost of each F-35A fell from $102 million in the last Obama negotiation to under $90 million in the second Trump negotiation.
This overall deal saves American taxpayers roughly $500 million and ensures that the United States military is getting more fighter jets at a lower price.
Here’s more from Forbes on the massive deal:
In the first production lot that his team negotiated, Lot 10, the price-tag for the Air Force version fell nearly 8% to $94 million. The cost of other variants for the Navy and Marine Corps fell too, cumulatively saving taxpayers $500 million on just that one production lot.
Lockheed Martin hadn’t been planning to cut the price that far that fast, but after Trump’s criticism of the program it decided to sharpen its pencils and find savings fast.
I know all this because Lockheed is a contributor to my think tank and a consulting client, so I saw the company’s angst up close as it endured unprecedented pressure from the nation’s chief executive.
Trump’s team came back the following year and won further price reductions of 6% on the Air Force version and hefty cuts in the cost of each sea-service version.
So the cost of each F-35A (the Air Force version) fell from $102 million in the last Obama negotiation to under $90 million in the second Trump negotiation.
So now we have a new “handshake agreement” disclosed last week that will carry the price-tag for the F-35A below $80 million when Lot 13 is reached. That’s less than the price of a new F-16, the legacy fighter that the F-35A was designed to replace, and the F-35A is a whole lot more capable.
In less than three years, the Trump administration has negotiated down the price of each F-35A by an impressive 25%, with Lockheed Martin now formally committed to staying at that low level as long as the government sticks with its commitment on production rates.
Even if you don’t factor in inflation, reducing the cost of each fighter from over $100 million to less that $80 million halfway through his first term is a major accomplishment for Trump.
If you analyze the average cost of Lockheed Martin’s contribution to each production lot, what you discover is that between the last Obama negotiation and the most recent Trump negotiation, the unit cost of the Air Force version is down 27%, the cost of the Marine version is down 27%, and the cost of the Navy version will fall over 30%.
This is another major example of how Trump is a far better negotiator than Obama.
By cutting the prices by 25 percent, Trump savde American taxpayers $500 million and ensured the U.S. military is more than prepared to defend the nation.