Trump tweets on Boeing, Lockheed raise concerns

President-elect Donald Trump’s unexpected tweets criticizing defense contractors Boeing Co. and Lockheed Martin Corp.--and the immediate drop in billions of dollars in stock valuations that followed--are raising alarms in the federal contracting community.

On Dec. 6, Trump tweeted “Cancel Order” about Boeing’s Air Force One contract. Boeing’s stock was reported to have dropped by more than $1 billion immediately afterward. The stock price has since recovered to a large degree.

On Dec. 12, Trump tweeted that costs are “out of control” regarding Lockheed’s F-35 contract, resulting in a loss of $4 billion in stock value.

The actions suggest the president-elect may continue to attack individual defense contractors for alleged high costs on Twitter, even as he talks about increasing spending on defense.

“The tweet (about Boeing) raises a risk we had feared, and that is that a populist president will publicly attempt to shame contractors,” Byron Callan, an analyst with Capital Alpha Partners, said in a note to investors, according to an article in GovExec. But, Callan added, he sees the risk as “fleeting.”

Nonetheless, the unanticipated and sharply critical messages on Twitter reportedly have had a chilling effect on defense contractors and even on a broader community of corporate executives.

Business owners are afraid of being the subject of a president-elect’s tweets, Bill George, a former chief executive of Medtronic, a medical device maker, told the New York Times.

In addition, some people say the president-elect may risk being implicated, or the appearance of being implicated, in insider trading if people believe he shared advance information of his tweets.

More information: GovExec http://goo.gl/Rqvhb4
NYTimes: http://goo.gl/B7VzQh
CNBC: http://goo.gl/OKwwxc

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Trump tweets on Boeing, Lockheed raise concerns

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