Trump is winning almost every battle he’s fought and he just added another notch to his gun. He had hit Boeing over the cost of the new Air Force One and they capitulated. Then he decided the cost of the F-35 being built by Lockheed martin. Trump asked Boeing to price out planes for the government and lo and behold, Lockheed Martin announced that they can significantly lower the price on the F-35 and on top of that will add 1,800 new employees.
BREAKING: Lockheed Martin CEO says company will add 1800 jobs at its Ft. Worth operation pic.twitter.com/EHExBdGoGR
— CNBC Now (@CNBCnow) January 13, 2017
This kind of pressure could raise eyebrows when applied to private-sector firms, but this is unlike Carrier and GM. The federal government is the customer for both the Boeing and Lockheed deals, and so this is more of a direct negotiation context rather than outside interference by a regulator. It raises the question about just how well the government performs in negotiating deals with its contractors. Donald Trump hasn’t even taken the oath of office yet and he’s restructured two multi-billion dollar deals and got a commitment for almost two thousand more jobs out it. That doesn’t exactly speak well for previous administrations on contracting, and not just the most recent.
Of course, this process will only work to a limited extent. The DoD needs significant reform in its contracting processes, part of which has been worsened by consolidation in the industry. For job creation, downsizing regulation and putting Congress back in control of lawmaking will provide a better incentive than Oval Office wheeling and dealing, but the point has been made by the latter.