Boeing CEO Reportedly Listened In On Trump's F-35 Calls With Lockheed
ROBERT SIEGEL, HOST:
The F-35 is the most expensive weapon ever. It's a fighter jet made by Lockheed Martin. President Trump has made it his personal mission to reduce its cost. Well, Bloomberg News reports today on one tactic the president has used. It's the element of surprise. Last month, Trump made a phone call to the program's manager, and listening in from Trump's side was the CEO of Boeing, Lockheed Martin's chief rival for military contracts.
Bloomberg Pentagon reporter Tony Capaccio joins us now having come from a hearing about the F-35 on Capitol Hill. Welcome to the program.
TONY CAPACCIO: Thank you.
SIEGEL: And tell us what you've learned about that phone call from Donald Trump.
CAPACCIO: Well, for one thing, the program manager, Air Force Lieutenant General Chris Bogdan - he confirmed to members that he did in fact receive two calls...
SIEGEL: At the hearing today.
CAPACCIO: ...At the hearing today. And then afterwards, he talked to reporters. And what I picked up on was that he didn't feel that the Boeing CEO's listening in on the conversation - which was on speakerphone, by the way - was not inappropriate because nothing was discussed that was a decision point or that hadn't already been publicly available.
SIEGEL: So General Bogdan says he didn't find that inappropriate. What about Lockheed Martin?
CAPACCIO: We gave them the opportunity a couple times, and they declined to comment.
SIEGEL: You've been following the F-35 from its conception. I mean was it unusual for the CEO of the rival contractor to be on the room with the president - or the president-elect, in this case - talking to the person running the project?
CAPACCIO: I thought it was unusual, but given Trump's operating style, he seems fairly impulsive. This was an example of an impulsive call.
SIEGEL: You're saying the standard for unusual has moved in Washington.
CAPACCIO: It has. Now, I've been covering defense for about 30 years, and presidents do not call program managers.
CAPACCIO: Defense secretaries do. Service secretaries do, but presidents don't.
SIEGEL: Trump has taken credit for reducing the cost of the contract for the F-35 by $600 million. And in a press release earlier this month, Lockheed Martin said that Trump's personal involvement in the program - this is a quote - "sharpened their focus on driving down the price." Is Trump's direct involvement making a big difference here, or was the price going to come down with or without him?
CAPACCIO: The price was going to come down with or without him. That contract - it was moving kind of like food through a snake. It was lurching over a year, and they were in the end game. Lockheed was agreeing to a lower price.
I can see where Mr. Trump's involvement pushed it along because it became a national issue, whereas before, it was quietly negotiated behind closed doors. And the final Pentagon savings was $728 million, not 600. So I think he jumped on a train already moving, and he's taking credit for probably pulling it into the station.
SIEGEL: Donald Trump was elected on the promise to drain the swamp. He ran as a disruptor. When he looks at defense contracting for big projects - I was going to say like the F-35, although I guess there is nothing quite like the F-35 - does he have a swamp in his sights when he talks - when he looks at these things?
CAPACCIO: The overall trend of weapons program overruns has decreased over the last four or five years. But this isn't - you know, eternal vigilance is a good thing because companies and the Pentagon - sometimes they get a little too incestuous with each other, and they don't - the Pentagon doesn't oversee enough. They don't slap the companies around enough, penalize them enough.
So a fresh set of eyes coming in is always a good thing. But you have to remember, as the president-elect and president, that these acquisition programs and the - who gets picked are governed by rules and regulations that can be challenged in court if the loser thinks...
CAPACCIO: ...They were treated unfairly.
SIEGEL: That's Tony Capaccio, a Pentagon reporter for Bloomberg News. Thanks for talking with us.
CAPACCIO: Thank you.
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