The “Art of the Deal” Meets “The Art of War”: How Defense CEOs are Handling Trump

Though few CEOs would go as far as to categorize the president-elect as an enemy, this advice increasingly appears to be their tactic of choice when skirmishes erupt with Donald Trump. And the defense industry is no exception.

On Wednesday, Boeing CEO Dennis Muilenburg and Lockheed Martin CEO Marilyn Hewson flew to meet Trump and Pentagon officials at his Mar-a-Lago resort in Palm Beach, Florida, where he is spending Christmas.

It came after both companies were targeted in Trump Twitter tirades. Boeing was scolded for apparently charging too much to build new Air Force One planes for the U.S. government, earning the Trump rebuke “Cancel Order!”. Lockheed, meanwhile, was slammed for the cost of its contract to develop next generation F-35 fighter jets, estimated at around $400 billion.

“We’re going to get it done for less than that, and we’re committed to working together to make sure that happens.

Rather than go on the offensive, both CEOs offered some form of concession.

Muilenburg pledged to keep the cost of building the two presidential aircraft under $4 billion. “We’re going to get it done for less than that, and we’re committed to working together to make sure that happens,” he told reporters after the meeting.

Trump has said the planes would cost more $4 billion to build, a figure that has never been stated by Boeing, at least not publicly. As recently reported by Wired, $4 billion may not be such a crazy estimate considering the extraordinary capabilities going into the aircraft. These include secure communications systems that can withstand nuclear war and engines that can be refueled mid-air.

Muilenberg, however, has a lot to lose by appearing combative. Trump has pledged to increase defense spending more broadly, a move that could benefit defense companies like his immensely.

Lockheed’s Hewson, meanwhile, issued a statement that didn’t give much away.

“I appreciate the opportunity to discuss the importance of the F-35 program and the progress we’ve made in bringing the costs down,” she said. “The F-35 is a critical program to our national security and I conveyed our continued commitment to delivering an affordable aircraft to our U.S. military and to our allies.”

Perhaps she’d taken a leaf out of Trump’s book, The Art of the Deal.

“The worst thing you can possibly do in a deal is seem desperate to make it,” Trump wrote. “That makes the other guy smell blood, and then you’re dead.”

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Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.

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