Trump Threatens Boeing Air Force One Contract After CEO Criticizes Trade Policies

In what could be a preview of things to come, Donald Trump today threatened The Boeing Company with the cancellation of a $3 billion U.S. Air Force contract to replace the fleet of Air Force One aircraft.

Although aides portrayed the threat as a budget move, it might have been spurred by criticism of Trump’s planned trade policies, which involves high tariffs on imported goods.

While Trump transition officials said the tweets were simply evidence of the kind of cost-cutting movies promised by the President-elect, they were posted online just 22 minutes after the publication of a Chicago Tribune story that quoted Boeing CEO Dennis Muilenburg criticizing Trump’s anti-trade stance.

In the article Muilenburg, whose predecessor at Boeing’s Jim McNerney is an economic adviser to Trump, suggests that the President-elect “back off” from his trade position.

Trump’s Tweet was inaccurate. He claimed the contract costs had ballooned to more than $4 billion for “a brand new 747.” However, Boeing is actually building two new 747-800’s to replace the pair of 747-200’s now in use for presidential travel. The planes are set for delivery in 2024.

It not clear where Trump got the figures the “more than $4 billion” figure. Official U.S. government reports place the total cost significantly lower.

In January, the Pentagon announced that Boeing had won a contract to begin work on replacing the current Air Force One fleet. That initial contract, for preliminary research on the new planes, was priced at $25.8 million, and the Defense Department awarded a second $127.3-million contract in July for Boeing to develop “interior, power and electronic specifications” for the planes.

The Air Force, however, has allocated $2.9 billion for the endeavor through 2021, according to U.S. budget documents, while the estimated total costs, according to a March 2016 Government Accountability Office report, amount to about $3.2 billion.

The aircraft cost a great deal more than a commercial 747 because of numerous special modifications required for presidential use. The aircraft are flying command posts in times of emergency.

Boeing is the only domestic manufacturer capable of building replacement aircraft for the presidential fleet. Shipping the jobs overseas would not be a viable option for Trump, who has criticized U.S. companies for doing the same thing.

The only other company capable of constructing such a jet would be French company Airbus — an unviable option, John Haigh Sr., a former chief steward of Air Force One, told The Atlantic, due to the “highly classified decisions” involved in designing such a plane and the image crisis that could result from building the President’s plane abroad.

Trump’s public threat against Boeing over a contract is highly usual, especially for a president elect who has not yet take office. But, the New York billionaire and Vice President Elect Mike Pence have assume a high profile on economic and trade issues during the transition period.

They intervened to partially reverse a decision by Carrier Corporation to move more than 2,100 jobs from Indiana to Mexico in return for $7 million in subsidies from the state, where Pence is governor.

It is believed that Carrier’s parent company, United Technologies Corporation (UTC), agreed to the deal, at least in part, to avoid endangering the significant amount of business the company conducts with the federal government.  UTC is a major defense contractor, producing missiles and aircraft systems.

The move was applauded by Trump’s supporters for keeping jobs in the United States, while it was condemned by others. Former Alaska Gov. Sarah Palin condemned the package as crony capitalism.

How Trump’s economic and trade policies will affect the space sector remains to be seen. Large aerospace companies such as Boeing, Northrop Grumman and Lockheed Martin are major contractors for the civilian and defense space programs.

Their life could become more difficult if the Trump Administration intervenes in contract awards and the president calls the companies out publicly for business decisions they make. NASA and the U.S. Air Force could find their ability to reward contracts and follow through on programs hampered by administration interventions.

There’s also the issue of freedom of speech. Company executives should be able to express their views on proposed policies without a president elect threatening to cancel contracts. Trump also has threatened to tighten libel laws, moves widely seen as a way of muzzling media criticism of him.

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  • voronwae

    That’s two planes. That’s the first thing he got wrong.

    The second was how much the two planes cost.

  • voronwae

    Trump isn’t driving the Important Decision bus. Pence is. SLS isn’t going anywhere.

    It’s possible, though, that the space tech portion of the NASA budget might fade quickly. I expect to see more pork in the NASA budget, not less, and anything that conflicts with it will be managed out.

  • JamesG

    It was never his job to save money. He ran with the explicit promise to make the government more efficient and smaller. He was already fabulously wealthy, he did not need the money. And as I’m sure he’s aware of by now. The POTUS is not a CEO.

  • JamesG

    You first. Why can’t the VC-25s be taken in for upgrades? They have to go down for annual services, and I’m sure they’ve gotten overhauls and upgrades over their lifetimes. That is why there are two, and the POTUS (even Trump) can slum it on lesser aircraft you know.

  • JamesG

    Losing even this sweet cherry of a contract for 2 super deluxe airframes and all the goldplating that goes in them isn’t going to effect Big B’s exports at all. It would barely even make a mark on their bottom line. I’m not sure what you are getting at.

  • I agree with you completely. The SLS isn’t going anywhere.

    In more ways than one.

  • JamesG

    With the way Boeing bills these days, it would be well north of $4B for them before their presidential paint jobs were dry.

  • Consensus science seems to disagree with you.

    But no matter. Science isn’t your cup of tea.

  • And I can always spot an American authoritarian on the internet when they claim they are a ‘we’.

  • I usually prepare for a hurricane even if it end up missing me.

  • Sure, no need to board up those windows and evacuate.

  • After December 19th you will have no choice.

    Maybe you missed that.

  • JamesG

    That was almost as funny as Andrews post. But I’m here for Doug’s snarky take on aerospace not off-topic political kiddie-pool arguments

  • And you had your chance to explain away that roughly 0.7 Watts per square meter energy imbalance at the top of the atmosphere, but were either unwilling or unable to do it.

  • I don’t trust anyone who drinks decaf. On first principles.

  • Like for instance, science is a Chinese conspiracy.

  • JamesG

    The Chinese saying: “May you have an interesting life” comes to mind.

  • Why would you trust anyone from a nation that conspires to fake science?

  • What’s a lib again? A left handed human?

    Woo woo is very unbecoming.

  • Andrew_M_Swallow

    The E-4 is the “above plane” I was talking about copying.

  • Andrew Tubbiolo

    Copy what? The existing AF-1? That’s a modified (2 off) 747-200. Check with Boeing about re-opening 747-200 production. Or am I still not understanding you?

  • Andrew_M_Swallow

    No need to use second hand aircraft. The actual airframes have always been the easy bit of the Air Force 1 contract. Since it is the customisation that is the expensive part the prime contractor could be a ship builder.

  • P.K. Sink

    Yeah…this country is getting more “interesting” with each new election cycle. I can’t wait for Kim Kardashian to throw her hat into the ring one of these years.

  • P.K. Sink

    You might consider cutting back on the caffeine yourself.

  • Not until it’s reclassified as a federal schedule 1 narcotic I won’t. Don’t worry, the coffee plant is not long for the world anyways.

    I also have as backup a variety of native Bahamian bush teas at my disposal. Oh the joys of a matriarchal society.and culture.

  • Vladislaw

    Walker had something to say about it…

    ““You have NASA building heavy-lift capacity, you have the Air Force building heavy-lift capacity, and you have at least two commercial companies building heavy-lift capacity,” he said, referring to the Space Launch System, Air Force efforts to support development of launch systems, and work by Blue Origin and SpaceX on their own vehicles.

    “Somebody should be looking at that and deciding whether or not all those various technologies are needed,” he said of those efforts. “Commercial can do whatever they want in this regard, but the fact is we ought to know whether or not we’d be better off buying services from them our building our own systems. That’s a role the National Space Council could play.” ”

    I believe that pretty much says it all. I just do not see Pence as a heavy weight battling over space policy. Pull the funding for SLS and Orion, tell NASA to buy services and Pence can call it a day and go home.

  • Vladislaw

    Lets see if Trump has the same problem Obama had with putting people in place.. My bet Trump will not face any obstruction from day one that Obama did.

    https://uploads.disquscdn.com/images/d2e3901e144f9092854255fc8a45728c7ecdb6a41058c09d69c144c69083b83d.png

  • Vladislaw

    Or if congress decides, like they did with President Obama, no honeymoon. If Obama is for it we had to be against it.

    “TIME just published “The Party of No,” an article adapted from my new book, The New New Deal: The Hidden Story of Change in the Obama Era. It reveals some of my reporting on the Republican plot to obstruct President Obama before he even took office, including secret meetings led by House GOP whip Eric Cantor (in December 2008) and Senate minority leader Mitch McConnell (in early January 2009) in which they laid out their daring (though cynical and political) no-honeymoon strategy of all-out resistance to a popular President-elect during an economic emergency. “If he was for it,” former Ohio Senator George Voinovich explained, “we had to be against it.” The excerpt includes a special bonus nugget of Mitt Romney dissing the Tea Party.”

    http://swampland.time.com/2012/08/23/the-party-of-no-new-details-on-the-gop-plot-to-obstruct-obama/

    If Trump gets fillibustered 600 times I will believe it then.

  • I’m sure decades long bipartisan support for Constellation, oops, I mean SLS and Orion will be totally ok with that

  • ThomasLMatula

    Keep in mind it is not only President Obama that flies on them. The VP flies as well as other high officials. Also at least one is kept on alert. But at the same time they probably get much more preventive maintenance than your average airliner.

  • ThomasLMatula

    The Republican margin in the Senate is slim. You will see the Democrats working block anything and everything based on their belief they must “stop” President Trump no matter what. The voting recounts and attempts to sway the Electoral College is just the start.

  • ThomasLMatula

    You are seeing this as payback for Boeing. No, Boeing is small potatoes. President elect Trump has picked this fight to enforce his arguments that Washington DC is out of touch with America.

    Remember he is not tweeting for the Washington Elites or
    Policy Wonks, but the millions of Americans who voted for him. Americans who have trouble finding a few hundred dollars to keep their cars running. The idea that Washington Elites think its OK to pay a mega corporation like Boeing $4 billion for a new plane to ride around in “style” sounds as obscene to those who support him as King Louis XIV’s Sun Palace was to France’s starving peasants.

    Yes, it illustrates well how his argument about how the folks in Washington DC are out of touch with the average American.

  • Andrew Tubbiolo

    Absolutely right, but a certain someone says I argue in circles when I bring in actual issues to bear. So …. Thanks.

  • JamesG

    Oh you can be sure that the Democrats will be just as obstructionist as the Republicans were. That is their role as the opposition party, and thus as it should be.

  • P.K. Sink

    I missed that.

  • P.K. Sink

    I prefer to think of Trump as a possible train wreck.

  • That would require that his selection of his cabinet members is really just some vast complicated con job with Steve Bannon, where he will suddenly surprise everyone and say … just kidding. I would believe that except for Mike Pence.

  • He will then have the delegates blessing and nothing can stop him then from ploughing through to the 20th of January.

  • publiusr

    The new Air Force One is likely to be yet another twin-jet.

    I want it kept a 747. It is supposed to be a 747-8. We’ll see. Everyone is going for twin-jets

  • Snofru Chufu

    I am sorry for you.

  • P.K. Sink

    Why?