Trump Threatens Boeing Air Force One Contract After CEO Criticizes Trade Policies
Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!
— Donald J. Trump (@realDonaldTrump) December 6, 2016
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.
71 responses to “Trump Threatens Boeing Air Force One Contract After CEO Criticizes Trade Policies”
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That’s only one plane. There’s a bigger fight looming over a bunch. http://www.msn.com/en-us/mo…
I am no friend of the gouging habits of old space and defense contractors, but one has to wonder how serious the President Elect is about these tactics, and how far he plans to take them. The grass will surely get trampled.
That’s two planes. That’s the first thing he got wrong.
The second was how much the two planes cost.
You forget that leadership has always been about the power of hyprocracy.
Maybe Trump will be different…
You know my gut reaction is to take you to task for saying that, but so many people agree with you, I’ll ask very nicely, what is it about what you have seen to make you think otherwise?
For me it’s obvious he takes the Clintons to task for their corruption, but has every intention of being even more corrupt than they are, and intends to institutionalize it. I don’t understand how given his past, his business practice, and who he’s choosing for his cabinet he’s going to betray all the true believers and double down on doing exactly what they voted him into office not to do. That you folks don’t see a monumental betrayal coming confounds me.
Because most conservatives and Trump supporters (not one and the same), are intelligent (yes, really) and mature enough to know you never get everything you want and the campaign promises were the hypothetical ideal. Which has made the epic head exploding of the Left so amusing to watch. They took every sound byte and statement Trump has made over the past year as if Trump is going to snap his fingers and its going to occur instantly on January 20th.
Trump is building a solidly conservative cabinet, full of the people that can make the government function, just like Obama did with a strongly liberal one. You may not like it because it doesn’t agree with your political sensibilities, but no EOTWAWKI is occurring here. I’m sure the liberal media, the rest of the leftist whine-state, and you will be constantly nipping at his heels for the next four years to keep him honest.
Grow up.
I did not ask you. I don’t take you seriously. But now that you have inserted yourself into discussion, what makes you think conservatism is somehow tied into the universe such that humanity extracts benefit from it? Excluding Eisenhower it’s conservative leaders that take the budget out of balance, and for the most part enter into military adventures with no strategic rationale and that lead nowhere. They have no understanding of force of arms or the capabilities and limitations of real weapons systems such that all they do is build more, no matter what. It’s as if you folks have a constant fear and insecurity that can only be assuaged by more. It was also conservative leadership that led to the American business sector becoming beholden to the Chinese Communist Party and somehow you call that capitalism. Furthermore I have it in your writing that somehow the state corporations of Russia constitute a capitalist economy. You realize that to most people you look like a closet fascist at least, and borderline communist?
We can always count on you to bring the comedy Andrew…
Always the vapid, dumb arse, reply based on ignorance. Conservatives are such a stereotype.
I’m trying to keep my replies on your level. You don’t deserve any more effort.
The coffee is gone…but Costco has a dark roast decaf that is absolutely outstanding. On the other hand, they’ll have to pry my beer from my cold, dead hands.
Trump is a mystery to me…I don’t have a clue on how he’s actually going to jump on any real-life issue that reaches his desk. I imagine that we’ll be talking again down the road. Later.
The Chinese saying (curse): “May you live in interesting times” comes to mind.
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.
You’ve just told Andrew to “grow up”. You’re talking about a president-elect who is the least mature and least honest candidate I’ve witnessed in my lifetime, and so far as I can tell, in the history of the United States.
You’re also talking about the candidate of a party which categorically refused to work on behalf of the country in order to avoid giving Obama any legislative successes, which lacks any sort of maturity whatsoever.
And you seem to be woefully ill-informed, which doesn’t speak well to your own level of maturity. You should do your homework before casting aspersions.
I’m a longtime member of the GOP. I used to consider myself somewhat conservative, except I’m having a hard time with the abject hypocrites and raw idiots who want to crowd into my clubhouse.
As a conservative, I check my facts carefully, and I have not found anything to suggest that the Clintons are “corrupt”, other than the continuous pounding of that drum by Gingrich’s Pharisee acolytes. Trump’s corruption, however, is in my face constantly. I voted along with many conservative Republicans for the qualified candidate, and I’m not foolish enough to expect that the Presidency will be enough to make Trump stop being himself and become a responsible human being. He’s already said that he can run his business from the White House.
Incidentally, my blood pressure’s 105/65. It doesn’t change, even if my lip is curling.
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
It sure doesn’t take you libs long to get around to the name calling. Weak…very weak.
Mr James and I went at it to some length in another discussion.
OK. I’m taking a wait-and-see attitude with Trump…just like I did with Obama. So far he hasn’t done anything to make my hair catch on fire. The stock market seems to like him…and that’s where my retirement money is. Until he actually starts putting some meat on the bone, you might want to remain a little calmer. I’m starting to worry about your blood pressure. Remember, you’re not as young as you used to be.
I grew up with him in the news almost daily back in the 80’s when I lived in the NY metropolitan area. Watching him go bankrupt and blackmailing the banks to float his lifestyle was entertaining, until I watched Atlantic City go from a run down city built in the 30’s to a series of skyscrapers surrounded by run down slums, and then watched each of the casinos go bankrupt and fail. But thanks for your reply. Took my blood pressure this AM 117/75 …. pretty awesome!
Your BP is better than mine. Bottom line for me…I’ve been following the Clintons since the early 90’s. I actually voted for Bill the first time around. But their history of lying, cheating and general sleaziness makes me feel about them like you feel about Trump. I gave Bill his chance when his turn came around. I’ll always be grateful to Obama for denying Hillary the White House. And I’m grateful to Trump for doing the same. Now I’ll give him his chance.
Truth be told I was not going to vote for any of the Republicans except the Gov of Ohio. The Clintons are corrupt. I don’t blame you there. It’s just my observation that Mr T is even more so. If you go by performance in the economic lab, the Clinton’s did have a lot of years of balanced budget when working against a Rep controlled Congress. Their years of defect look positively sane compared to the past two administrations. From what I see Mr T is going to accelerate the rate at which we accrue debt and take us into California or even Greek levels of debt. Backing up my opinion is how he runs his business. Good luck with your retirement, and BP, it’s taken me two years of exercise and diet to get it down there … Thank goodness I did not have to give up coffee. But it was close.
I agree. Folks who are looking for monsters, and UFOs, usually find them. Let’s see what he actually does.
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.c…
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.
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/2…
If Trump gets fillibustered 600 times I will believe it then.
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.
I didn’t vote for Trump. So you may be confounded on more than one level.
Good, Boeing is an extremely corrupt company, it’s long over due that someone shakes things up. Cost overruns are as common as a bird shitin on a clean car.
See Keiths note.
http://nasawatch.com/archiv…
I hear sqealing from the pig pen!
That would be awesome. Cancel that “Marine One” fiasco while he’s at it. There was absolutely no reason to replace any of these aircraft. It was pure pork.
Yes, if the USAF crews are allowed to fly bombers that are over 50 years old into combat a 30 year old jet should work for Presidential flights.
That’s false logic, Tom, beginning with the fact that an AF1 can’t be taken out of service for several months to refurbish it.
James, if you’re that sure about your opinion, please provide some facts and figures or, at least, citations.
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.
I dunno. The very day this news comes out about $125 BILLION in Pentagon waste, Trump goes on a rampage against Boeing on one program.
Trump and Congress seem intent on pouring many billions more into the military. Pick a small battle to distract everyone from the bigger issues?
https://www.washingtonpost….
It takes a while to drain a swamp. They are just now showing up with the pump and pipes…
Trump targeted Boeing because someone from Boeing publicly criticised Trump’s trade policy. It has nothing to do with the actual cost or waste, it was a direct retaliation for not supporting Trump.
Just as the trivial but showy Carrier deal was to curry favour with Trump in order to protect the parent company’s other businesses.
Trump is setting up the Presidency as an extortion racket. You think that will result in savings?
Boeing makes a lot of money playing the Globalist game. They are one of the best at it because most of their products have some of the highest barriers to entry of any industry and they are used to being able to tell politicians how high to jump.
It has nothing to do with “supporting Trump”, Big B doesn’t like a more protectionist trade policy because it hurts their bottom line, so the exec spouted off about it. And Trump put him in his place, by reminding him who has the power here.
Much like the Carrier deal, it is trivial, but it it sends a message. The rules of the game have changed. Corporations are no longer going to be free to maximize their benefit without considering social costs and public accountability. If you want to call that extortion…
Yep. “I’ll show you who’s boss! I’ll erase all of Boeing’s exports with a phone call and a few beautiful tweets! That’ll make America great again!”
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.
Funny how when President Obama criticized the cost over run of a new Marine One no one claimed he was getting back at a firm’s CEO. But that seems to be how the press plans to present President elect Trump’s every action.
http://abcnews.go.com/Polit…
Incidentally you do know that President elect Trump has personal experience buying large Boeing jets, unlike earlier presidents. As such he likely has a good idea of what one should cost, even with gold plated fixtures, and as a contractor probably has a sixth sense about someone padding expenses 🙂
http://www.forbes.com/sites…
Really if he was unhappy about what the Boeing CEO said he wouldn’t be as subtle as criticizing their proposed cost for a new Air Force One, that is Washington style. He would just tweet directly what he thinks about the CEO of Boeing.
Tom, he didn’t even know that his figure of $4B was wrong, nor did he know he was talking about 2 airplanes, not 1. He may or may not know what a plane costs to buy, but to begin negotiating for a drum one doesn’t begin by complaining about the cost of pianos.
Further, Trump seems to retaliate from the hip, using whatever comes to mind first. It’s completely plausible to think he heard “CEO of Boeing” and immediately thought of that new 747 the National Enquirer mentioned…
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.
Trump had nothing to do with the “Carrier deal”, they are keeping on those 1000 employees because of a restructured tax break, which was done by the governor of Indiana, aka: Vice President Elect Mike Pence.
Next time, load your head, before you shoot your mouth.
How do you think it gets to $125B (or $16T+)? One “Well, its not my dollar” at a time. If that is the way you think, you are part of the problem.
Trump and the GOP are intent on rebuilding the force. That requires spending money. But it is not the goal in itself.
Right. You need to see the movie “Being There”, with Peter Sellers. It’s particularly relevant.
In this case, you’re also attributing to Trump a desire to save the taxpayers’ money. He’s never been concerned about saving other people’s money in the past. Why do you think he’s going to change at age 70?
I think you’re absolutely unfamiliar with the way Trump has done business for his entire life. He’ll come out of the Presidency a good deal richer, but I have very strong doubts that he’ll be the first Republican to reduce the federal deficit.
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.
If you want to change the world first you have to change yourself. Air Force Ones are the presidential planes. Trump will have direct control of those. Trump then has the moral status to sort the Pentagon out.
That makes sense to this non-Trump fan.(Lessor of two evils is not fandom)
In order for that to be true, Trump would first need to get his facts straight. $3B, not $4B. Two planes, not one. $66B worth of exports hanging in the balance with China, to start.
With the way Boeing bills these days, it would be well north of $4B for them before their presidential paint jobs were dry.
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
We’ll see what comes of this announcement. If nothing else, it could serve as a brushback pitch to the Pentagon and defense contractors about excessive costs.
Trump is all over the map with his deals and rants. It will be interesting to see if his people can turn his gut instincts into rational policies.
Thank you for your thoughtful reply.
Fair enough.
There’s a lot to take DOD to task for. But if you told me the cost of a 747-8i with all the functionality of an E-4 thrown in costs $1.6 billion each, that’s a pretty good deal. Consider that Air Force Ones does everything thing this aircraft does.
https://www.youtube.com/wat…
To get a new contract IMHO Boeing needs to take the design of the above plane and the specifications of the current Air Force Ones plus the proposed enhancements for the new planes. Merge them to produce a ~10 page proposal before Christmas. Maximum price $3 billion.
The president needs a posh office, more journalists and to carry Secret Service & Marine guards.
The current AF-1 does the overwhelming majority of what the E-4 does and more. It’s hard to make a credible proposal for such a complex set of systems and fit that within a 10 page proposal and have it fit within a fixed budget. I don’t see a credible way you can reproduce what you see there. Complete communications options for ordering the use of military forces world wide during a nuclear conflict. Really, Mr T is choosing this fight out of shear ignorance. 1.6 billion is not a bad price when you consider most of the communications systems will have to complete their development cycles in the aircraft.
Also consider this …
https://www.youtube.com/wat…
The hardware required to receive that boom, take on fuel, pump it into the tank system, and survive those electrical discharges is complex and requires a lot of engineering time, that again, will finish it’s development cycle in the aircraft.
Why have an aircraft like this? It fits in with dealing with the consequence of owning and maintaining a nuclear striking force.
https://www.youtube.com/wat…
While some will say we’re not in the 1970’s anymore, the problems of nuclear decapitation strikes still have to be dealt with.
But you see folks assume Mr T has looked at all this, considered it, and has come to the conclusion that it’s too expensive because he thinks he has some idea of what all this capability should cost. In reality he’s an ignorant lout and simply looks at the $3.6 billion price tag for two aircraft, confuses it with the price for one, and compares that to the price of a new 747-8i and assumes that like his 757, it’s simply a re-arrangement of new seats for the interior ala Boeing Business Jets with little deviation from a standard certificated aircraft.
Copying an existing device is relatively easy, just get the manufacturer to copy it.
Existing military equipment can be specified in a single line.
< name of device > < part and document number >
The cost reducing trick is to avoid developing new things. Fit existing one, preferably in the same place.
1) It’s not a copy.
2) A lot of these systems are existing units, however shoe-horning them into a new aircraft and getting those new systems nuclear rated is quite another thing.
3) The best way to avoid developing new systems would be to simply dump the whole concept of an AF-1 and just have the president use an E-4. Good luck with that.
The E-4 is the “above plane” I was talking about copying.
Both AF-1 and E-4’s are early model 747’s. Those lines are long closed and re-creating them for a low number production run would be far more expensive than just changing the last of the 747-8i which is the current plan. And was also what was done with AF-1
I suppose something along your lines could be done if the frames don’t have too many hours and cycles on them. If those numbers were not excessive, you could do a “D” check and reset the frames back to a usable state. But who’s doing D checks on early model 747’s these days? Boeing, the USAF … Iran?
Edit: CNN states that Obama has put on 2,300 odd hours in 8 years. Projecting back 30 years that’s only 8600 odd hours. It’s not unheard of for 747-200 frames to serve for 80,000 hours total flight time. Some 747-400’s have racked up upwards of 120,000 hours. So from a hours POV they’re not ‘old’ aircraft. Parts are probably getting hard to find. Perhaps lifetime buys, or raiding Victorville and Pinal Air park might keep the old frames flying for another decade or two.
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.
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.
Absolutely right, but a certain someone says I argue in circles when I bring in actual issues to bear. So …. Thanks.
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.
You might consider cutting back on the caffeine yourself.
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.
I missed that.
I prefer to think of Trump as a possible train wreck.
Why?