Its partners in the marketing have been the Pentagon and defence chiefs in Australia and elsewhere.
But there is no better marketer than President-elect Donald Trump, so he understands the Lockheed game. Last night on Wall Street Lockheed shares plunged, to be down 5.4 per cent in a week as once again Trump effectively called for the truth on the Joint Strike Fighter rather than the public relations smokescreens.
Trump is discovering that nowhere in the so-called US government “swamp” is the water deeper and more contaminated than in Pentagon equipment purchasing and, in particular, the Joint Strike Fighter.
Shares in JSF developer Lockheed Martin had risen close to 30 per cent from their low point in January as the market believed the Lockheed public relations and predictions of huge JSF profits.
But, thanks to Donald Trump, truth is finally starting to emerge.
Australia’s defence chiefs have never faced the problems of the JSF. No one will ever forget when the Australian defence officials “forgot” to include the cost of the plane’s engine when estimating the cost to gullible Australian politicians.
As I will explain below, because our defence officials have been so long in the swamp with the Pentagon it’s hard for them to wash off the mud and establish an updated policy for Australia.
Fortunately for the nation the SA-based Air Power Australia group has been working with some of Trump’s people as have the Canadians who, under new Prime Minister Justin Trudeau, simply walked out of the JSF swamp.
The break out of JSF truth actually started more than a year ago when, in an October 2015 radio interview, Trump criticised the JSF’s cost and then added that he had heard “that it’s not very good” and that “existing planes are better.” (Trump could have added that the Russians and Chinese are developing better aircraft than the JSF and the F22, which currently gives US air superiority, is ageing.)
The next step in JSF “truth telling” came when Trump nominated the highly-respected retired General James Mattis as defence secretary.
The Mattis appointment gave Michael Gilmore, the defence department’s director of operational test and evaluation, (i.e. the chief JSF tester) the courage to tell Senate Armed Services Committee Chairman John McCain the truth.
Gilmore warned McCain that Pentagon officials have been preparing misleading assessments of progress on the JSF — the most expensive US weapons program.
“If not changed, the existing responses would at best be considered misleading and at worst, prevarications.” (Prevarication usually means “lie”, but it can also mean skirting around the truth, being vague about the truth, or even delaying giving someone an answer, especially to avoid telling them the whole truth.)
Bloomberg’s report on Gilmore’s toxic and truthful revelations came under the heading “Misleading F-35 (JSF) Answers Drafted by Pentagon, Testing Chief Says”.
Trump has taken up the JSF issue on Twitter and. the incoming US commander-in-chief blasted the JSF as an example of wasteful Washington cronyism.
Trump: “Look at the F-35 (JSF) program with the money, the hundreds of billions of dollars.”
“It’s out of control. And the people that are making these deals for the government, they should never be allowed to go to work for these companies. You know, they make a deal like that and two or three years later, you see them working for these companies that made the deal.”
President-elect Trump has clearly picked up on the fact that government officials who have supported the JSF often are appointed to jobs in Lockheed Martin, including posts on the board. To have made a comment like that would indicate that in a few months Trump will name and shame those that Lockheed “thanked” for past assistance.
Trump and his people have clearly picked up on the Pentagon cultural problem and the origins of the failed program.
The JSF disaster gives Trump’s people the opportunity to reform the Pentagon’s equipment operation.
Australia’s defence equipment culture is also clearly in need of reform. Cameron’s Stewart’s incredible revelations in The Australian involving the submarine contract, where the defence chiefs knew about the leaked material well before the contract was let, shows just how out of touch they have become.
Footnote: I must confess I have been alerting the nation to the JSF problems for about a decade. I get no satisfaction from the current situation but I am comforted that it is possible to solve the JSF problem to enable the US to maintain air superiority.
Here are a few of the commentaries I have written over the last year:
Markets blindsided by global power shift
Australia’s defence options open up
Markets can’t afford to ignore the resurgence of major power politics
Investors turn to Asia
Our big banks might have retreated from Asia, but it’s an exciting region for long-term growth.
Franking grab will hit ASX
Labor’s franking credits policy is the first step in giving some pensioners a sharp clip under the ear, but investors will suffer too.
The Lockheed Martin public relations machine is equal to the best in the world. It has brilliantly marketed a product, the Joint Strike Fighter (also called the F-35), that is not only way over budget but does not match the aircraft being developed by Russia and China.