Trump says allies calling about new US fighter jets

The Star

US President Donald Trump said American allies had been calling about the new generation fighter jets the US will be getting in the next few years.  Shares of Boeing rose 5% after the company beat out Lockheed Martin for the deal to make the jets.  WATCH MORE: https://thestartv.com/c/news SUBSCRIBE: https://cutt.ly/TheStar LIKE: https://fb.com/TheStarOnline

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00:00We're confident that it massively overpowers the capabilities of any other nation.

00:05U.S. President Donald Trump said American allies had been calling about the new generation

00:10fighter jets the U.S. will be getting in the next few years.

00:13Trump hinted that foreign sales of the jets could be an option during an announcement

00:17of the Next Generation Air Dominance Program contract being awarded to Boeing on Friday.

00:24Our allies are calling constantly, they want to buy them also and certain allies will be

00:31selling them, perhaps toned down versions.

00:33We like to tone them down about 10 percent, which probably makes sense because someday

00:39maybe they're not our allies, right?

00:41The sixth generation fighter jets, dubbed the F-47, will be the most sophisticated jets

00:48ever built for the U.S.

00:50The Next Generation Air Dominance Program will replace Lockheed Martin's F-22 Raptor

00:55jets with the new aircraft built to enter combat alongside drones.

00:59The contract win marks a reversal of fortune for Boeing that has struggled on both the

01:03commercial and defense sides of its business.

01:07The engineering and manufacturing development contract, which is said to be worth more than

01:1120 billion U.S. dollars, will be a major boost for its fighter jet production business in

01:17St. Louis, Missouri.

01:19Analysts said such contracts come around only once every 50 years, which will be profitable

01:25to Boeing, even though there might be some short-term disruptions.

01:29The Boeing company has struggled with its commercial aviation business, its space business

01:35and its major defense franchises.

01:36So this is an opportunity to really reboot or revitalize those defense contracts, particularly

01:44a number of which have been losing money for several years.

01:49The one thing I would say, though, this is a development contract.

01:52It will be challenging.

01:53I think many assume it is a cost-plus contract, so there should be some protection on the

01:58downside for the company.

02:00But it likely also includes some fixed-price contracts for low-rate initial production,

02:05which is an area that Boeing, as well as others in the industry, have struggled with.

02:09So it certainly brings a great opportunity, but there are also some perils with it.

02:14In a statement, Lockheed Martin said while disappointed with the outcome, the company

02:19is confident that it had delivered a competitive solution, and it will await further discussions

02:24with the U.S. Air Force.

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