Trump targets Lockheed Martin's F-35 fighter jet costs

WASHINGTON, Dec 12 (Reuters) - Donald Trump on Monday criticized Lockheed Martin's F-35 fighter jet program as too expensive, the latest attack by the U.S. President-elect on large defense contractors.

The aerospace giant's shares dropped 4 percent after Trump's tweet, while shares of several other defense contractors also weakened.

"The F-35 program and cost is out of control," Trump said on Twitter. "Billions of dollars can and will be saved on military (and other) purchases after January 20th."

Last week, he also used Twitter to target Boeing Co for its "out of control" costs on a new fleet of Air Force One planes, urging the federal government to "Cancel order!"

Lockheed Martin's F-35 program leader, Jeff Babione, responded by saying the company understands concerns about affordability and has invested millions of dollars to reduce the jet's price.

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A Lockheed Martin Corp. F-35A jet flies during a training mission in Hill Air Force Base, Utah, U.S., on Friday, Oct. 21, 2016. Lockheed Martin Corp.'s accelerating revenue growth outlook is boosted by its recent portfolio moves, which are enabling the world's largest defense contractor to better capitalize on higher foreign demand. Rising F-35 production is a key driver, as deliveries are to double by 2019 vs. current levels.

(George Frey/Bloomberg via Getty Images)

A fighter pilot secures the cockpit while crew members prepare the Lockheed Martin Corp. F-35A jet for a training flight in Hill Air Force Base, Utah, U.S., on Friday, Oct. 21, 2016. Lockheed Martin Corp.'s accelerating revenue growth outlook is boosted by its recent portfolio moves, which are enabling the world's largest defense contractor to better capitalize on higher foreign demand. Rising F-35 production is a key driver, as deliveries are to double by 2019 vs. current levels.

(George Frey/Bloomberg via Getty Images)

A Lockheed Martin Corp. F-35 performs during its flying display on the second day of the Farnborough International Airshow 2016 in Farnborough, U.K., on Tuesday, July 12, 2016. The air show, a biannual showcase for the aviation industry, runs until July 17.

(Simon Dawson/Bloomberg via Getty Images)

A Lockheed Martin Corp. F-35A jet flies during a training mission in Hill Air Force Base, Utah, U.S., on Friday, Oct. 21, 2016. Lockheed Martin Corp.'s accelerating revenue growth outlook is boosted by its recent portfolio moves, which are enabling the world's largest defense contractor to better capitalize on higher foreign demand. Rising F-35 production is a key driver, as deliveries are to double by 2019 vs. current levels. Photographer: George Frey/Bloomberg via Getty Images
A Dutch Lockheed Martin F-35 Lightning II fighter jet takes off at Edwards Air Force Base, California, on November 24, 2015. The Lockheed Martin F-35 Lightning II is a family of single-seat, single-engine, all-weather stealth multirole fighters undergoing final development and testing for the United States and partner nations. The fifth generation combat aircraft is designed to perform ground attack and air defense missions.The program is the most expensive military weapons system in history, and it has been the object of much criticism from those inside and outside governmentin the US and in allied countries. / AFP / DAVID MCNEW (Photo credit should read DAVID MCNEW/AFP/Getty Images)
Visitors look at a model of the Lockheed Martin F-35 Lightning II during a media preview day of the Seoul International Aerospace and Defense Exhibition at a military air base in Seongnam, south of Seoul, on October 19, 2015. The exhibition will run from October 20 to 25 with 386 companies from 32 countries involved. AFP PHOTO / JUNG YEON-JE (Photo credit should read JUNG YEON-JE/AFP/Getty Images)
Norwegian Chief of Defence, Admiral Haakon Bruun-Hassen speaks at the Norway F-35 rollout celebration at Lockheed Martin in Fort Worth, TX, on Tuesday, Sep. 22, 2015. Ceremonies were held at the Lockheed Martin F-35 production facility celebrating the rollout of the first F-35A Lightning II for the Norwegian Armed Forces. AFP PHOTO/LAURA BUCKMAN (Photo credit should read LAURA BUCKMAN/AFP/Getty Images)
A new Lockheed Martin F-35A Lightning ll multirole fighter jet parked in a hangar as it is presented to media at the Lockheed Martin factory in Fort Worth. (Photo by Orjan F. Ellingvag/Corbis via Getty Images)
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Babione said Lockheed's goal was to reduce the price of the F-35 by 70 percent from its original estimates. "We project it to be about 85 million dollars in the 2019 or 2020 time frame," he told reporters in Israel.

A week before Trump won the Nov. 8 presidential election, the U.S. Defense Department and Lockheed Martin concluded negotiations on their ninth contract for 90 F-35 fighter jets after 14 months of negotiations, the Pentagon said.

Lockheed won the contract, valued at up to $7.18 billion, in late November and has received an interim payment.

Trump campaigned on a promise to cut waste in federal government.

Lockheed and its key partners, Northrop Grumman Corp , Pratt & Whitney and BAE Systems, are developing and building three variants of the F-35s for the U.S. military and 10 allies including Britain, Australia, Norway, Denmark, the Netherlands, Italy, Turkey, Israel, Japan and South Korea.

After Trump's Monday morning tweet, shares of Northrop Grumman were down 4.5 while shares of BAE Systems were 2.4 percent lower in London.

Shares of General Dynamics, Raytheon, and United Technologies were all lower Monday, as were shares of Boeing.

United Technologies Corp , which had a run-in with the President-elect over a plan to ship 2,100 jobs to Mexico from Indiana operations of its Carrier air conditioning unit. The company last week agreed with Trump to keep about 800 of the threatened manufacturing jobs in Indiana, and retain another 300 headquarters jobs, in return for state tax incentives.

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Air Force One details and interior
U.S. President Barack Obama and his family arrive aboard Air Force One in transit to their annual summer vacation at Martha's Vineyard, via Cape Cod Coast Guard Air Station, Buzzards Bay, Massachusetts, U.S. August 6, 2016. Pictured are first lady Michelle Obama (bottom left) and daughters Sasha (top left) and Malia (top right). REUTERS/Jonathan Ernst
The first presidential jet "Air Force One", Airpark, The Museum of Flight, Seattle, Washington, USA
U.S. President Barack Obama and his senior advisor Valerie Jarrett (L) watch first half action of the U.S. and Germany World Cup soccer match while aboard Air Force One on their way to Minnesota, June 26, 2014. REUTERS/Larry Downing (UNITED STATES - Tags: POLITICS SPORT)
GREEN BAY, WISCONSIN: NOVEMBER 1 -- Aboard Air Force One President Barack Obama makes phone calls to Gov. Chris Christie and other officials after a campaign stop in Green Bay, Wisconsin, on Thursday, November 1, 2012. (Photo by Nikki Kahn/The Washington Post via Getty Images)
US President Barack Obama (L) waves as he and First Lady Michelle Obama board Air Force One prior to departing from Air Force Station Palam in New Delhi on January 27, 2015. President Barack Obama said the United States could be India's 'best partner' January 27 as he wrapped up a three-day visit to New Delhi by highlighting the shared values of the world's biggest democracies. AFP PHOTO / PRAKASH SINGH (Photo credit should read PRAKASH SINGH/AFP/Getty Images)
Air Force One Presidential air transport a specially converted Boeing 747 called a VC-25A.
President Barack Obama jokes with Ben Rhodes, Deputy National Security Advisor for Strategic Communication, aboard Air Force One
President Barack Obama wears a AF1 jacket on his first flight aboard Air Force One from Andrews Air Force Base
The US embassy defence attache salutes as the Air Force One aircraft prepares to taxi with US President Barack Obama and his wife Michelle Obama on board at Palam Air Force station in the Indian capital New Delhi on January 27, 2015. President Barack Obama said the United States could be India's 'best partner' January 27 as he wrapped up a three-day visit to New Delhi by highlighting the shared values of the world's biggest democracies. AFP PHOTO / PRAKASH SINGH (Photo credit should read PRAKASH SINGH/AFP/Getty Images)
Air Force One landing
Air Force One Presidential air transport flies over Mt Rushmore
US President Barack Obama boards Air Force One prior to departing Boise Airport in Boise, Idaho, January 21, 2015. Obama is traveling on a 2-day, 2-state trip to Idaho and Kansas following his State of the Union address. AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
US President Barack Obama walks to greet wellwishers before boarding Air Force One for departure from Forbes Field Airport in Topeka, Kansas, January 22, 2015. Obama returns to Washington after traveling on a two-day, two state trip to Idaho and Kansas following his State of the Union address. AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
US President Barack Obama walks down the steps of Air Force One after arriving at Andrews Air Force Base in Maryland, January 22, 2015. Obama returns from a 2-day, 2-state trip to Idaho and Kansas following his State of the Union address. AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
US President Barack Obama (L) and First Lady Michelle Obama board Air Force One prior to departing from Air Force Station Palam in New Delhi on January 27, 2015. President Barack Obama said the United States could be India's 'best partner' January 27 as he wrapped up a three-day visit to New Delhi by highlighting the shared values of the world's biggest democracies. AFP PHOTO / PRAKASH SINGH (Photo credit should read PRAKASH SINGH/AFP/Getty Images)
Air Force One with United States President Barack Obama aboard departs Joint Base Andrews Maryland, U.S., December 6, 2016. REUTERS/Gary Cameron
The interior of very first jet Air Force One, a Boeing 707, is seen at the The Museum of Flight in Seattle, Washington, September 6, 2012. (Photo by John Gress/Corbis via Getty Images)
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The attacks on Boeing and Lockheed Martin raise concerns that the incoming Trump administration will threaten defense contractors' profit margins.

"His emerging habit of using Twitter as a bully pulpit could become a threat to controversial high profile programs," Cowen analysts wrote last week after Trump criticized the cost of Boeing's Air Force One replacement program. "Even if Trump only launches a bombastic Twitter shout-out, this more aggressive approach to contractor relations could impact the stocks."

Earlier this month, the Pentagon's chief arms buyer said he was hopeful that Lockheed F-35 block buy will proceed.

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