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Market value of US military contractor drops by €1.8bn after Trump tweet

The President-elect said he will cut “billions” in costs for military purchases.

trump Source: Andrew Harnik AP/Press Association Images

SHARES OF US military contractor Lockheed Martin fell today, wiping out nearly $2 billion (about €1.8 billion) of the company’s market value, as President-elect Donald Trump tweeted that making F-35 fighter planes is too costly.

Trump said he will cut “billions” in costs for military purchases. Shares of other defence contractors, including Raytheon and Northrop Grumman, also tumbled today.

Trump didn’t mention any specific company in his tweet, but Maryland-based Lockheed makes the F-35 one-seat fighter aircraft and is a major US defence contractor.

Tweet by @Donald J. Trump Source: Donald J. Trump/Twitter

The F-35 programme made up 20% of Lockheed’s total 2015 revenue of $46.1 billion (about €43 billion). And US government orders made up 78% of its revenue last year. The F-35 programme directly or indirectly supports more than 146,000 US jobs, according to the company’s website .

In a statement, Lockheed said that it has worked to lower the price of the F-35 by more than 60% and said it expects the aircraft to cost $85 million (about €80 million) in 2019 and 2020.

“We welcome the opportunity to address any questions the president-elect has about the programme,” Jeff Babione, general manager of the F-35 programme said, adding: “It’s an amazing programme.”

Last week, Boeing’s stock dropped when Trump tweeted that the cost of a new 747 plane was “out of control”.

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