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(Adds comment from Sen. Blumenthal, tightens, updates shareprices)
By Alwyn Scott
SEATTLE, Dec 12 (Reuters) - Donald Trump on Monday widenedhis attack on defense contractors, slamming Lockheed MartinCorp's F-35 fighter jet program as too expensive asaides to the president-elect said he intends to keep pushing tocut the costs of military hardware.
Trump's latest Twitter broadside sent defense sharestumbling and fanned concerns that the incoming administrationwill reduce defense contractors' profit margins and cut broaderfederal spending, threatening U.S. factory jobs even as Trumppromises to boost manufacturing employment.
"The F-35 program and cost is out of control," Trump said onTwitter, echoing campaign promises to cut waste in federalspending. "Billions of dollars can and will be saved on military(and other) purchases after January 20th."
Last week, Trump targeted Boeing Co with tweets for"out of control" costs on new Air Force One planes, urging thefederal government to "Cancel order!"
The new administration's focus is likely to be"wide-reaching and impact all of government as we look to comeup with better deals," Trump transition spokesman Jason Millersaid.
"We're going to look for opportunities to go back throughand make sure that we're not getting taken advantage of."
Trump's F-35 tweet drew support from U.S. Senate ArmedServices Committee Chairman John McCain, who has voiced supportfor the fighter jet in the past. While a president cannot cancela program after funds have been allocated, it can purchase less.
"He can reduce the buy over time, next year, as we look atit again," McCain told Reuters.
But Trump's off-the-cuff remarks bristled others inCongress. Senator Richard Blumenthal, a Democrat fromConnecticut, home to F-35 engine maker Pratt & Whitney, said theprogram supports 2,000 Pratt jobs and thousands more atsuppliers.
"The suggestion that costs are out of control is just plainwrong," he said. Trump should "learn more about the facts"before discussing "arbitrary cuts in the program," he added."He's the president-elect. What he says matters."
Lockheed shares fell 2.5 percent after being down 5.4percent earlier. Shares of General Dynamics, NorthropGrumman, BAE and Raytheon also fell, while United Technologiesand Boeing shares were slightly higher.
'ACQUISITION MALPRACTICE'
The F-35 has been dogged by problems, with the Pentagon'schief arms buyer once describing as "acquisition malpractice"the decision to produce jets before completing development.
That led to retrofits and helped escalate costs to anestimated $400 billion, prompting the F-35 to be described asthe most expensive weapon system in history.
The Pentagon's chief weapons tester has continued tocriticize it, but the jets are now in use by the U.S. MarineCorps and Air Force, and by six countries: Australia, Britain,Norway, Italy, the Netherlands and Israel. Japan took deliveryof its first jet last week, according to a program spokesman.
Lockheed's F-35 program leader, Jeff Babione, said Mondaythe company had invested millions to reduce the jet's price by60 percent from original estimates. "We project itto be about $85 million in the 2019 or 2020 timeframe," he toldreporters in Israel.
The Pentagon is now paying about $102 million each for theconventional takeoff A-model, according to sources familiar withthe program. The savings reflect larger quantities and theironing out of technical issues.
As a practical matter, it was unlikely the U.S. would unwindsuch a large program involving contractors in nearly every U.S.state and eight partner nations, Baird Equity Research analystPeter Arment wrote in a note Monday.
"But what is likely ... is the message to the industry ofpotentially more risk-sharing on costs," he said. "This ispotentially a new paradigm for the industry."
(Reporting by Alwyn Scott, Andrea Shalal, Patricia Zengerle,Matt Spetalnick, Jonathan Landay, Phil Stewart, Doina Chiacu andSusan Heavey; Editing by Bill Trott and Nick Zieminski)