Donald Trump fired a shot at Boeing today. Citing cost overruns, he wants to cancel the air force order of “Airforce One”, the specialized plane that jets the president.
Here’s the Tweet.
Boeing is the latest company to come under Trump’s scrutiny as noted by the Wall Street Journal in Trump Says U.S. Should ‘Cancel Order’ for New Air Force One, Citing Costs.
“The contractors are really bemused,” said Loren Thompson at the Lexington Institute, a think tank part-funded by Boeing and other defense companies.
Boeing is the second-largest Pentagon contractor after Lockheed Martin Corp.—which is building the fleet of new helicopters that will serve as Marine One—and makes fighter jets, surveillance planes, bombs and other systems that generated sales of almost $19 billion from the Pentagon last year, a fifth of its total revenues.
Chicago-based Boeing hasn’t secured deals to build the planes that would replace the current aircraft used as Air Force One, which have been in flight since the administration of George H.W. Bush.
The two heavily modified 747-200 planes used by the president are due to reach the end of their planned 30-year life in 2017. This can be extended a few more years, and the Air Force has said in budget documents it wanted to have the first new jet in place by 2023 or 2024.
The $4 billion price tag Mr. Trump referenced for the cost of the new aircraft couldn’t be immediately confirmed.
The Air Force earmarked $1.65 billion between 2015 and 2019 to develop two replacement jets, and said it may acquire up to three. However, it hasn’t detailed the expected cost or delivery dates for building the planes as talks continue with Boeing, the White House and the Secret Service.
“I think it’s ridiculous,” Mr. Trump said of the planned Air Force One deal in brief remarks in the lobby of Trump Tower in New York City. “I think Boeing is doing a little bit of a number. We want Boeing to make a lot of money but not that much money.”
“The statistics that have been cited [by Mr. Trump], shall we say, don’t appear to reflect the nature of the financial arrangement between Boeing and the Department of Defense,” said Obama White House spokesman Josh Earnest.
Mr. Trump has used Twitter extensively throughout his presidential campaign and following the election. Tuesday’s tweet is his latest rebuke to a major U.S. company. Mr. Trump has also used Twitter to hit Ford Motor Co. and United Technologies Corp.’s Carrier unit for plans to move production overseas.
If nothing else, Trump Tweets are sure to provide writers and comedians with plenty of material for the next four years.
Mike “Mish” Shedlock
People do not understand trump. He is not a democrat or republican. He is a common sense businessman who loves America. He could care less if a person or idea is from either party. If it meets the criteria of common sense and efficiency, he will support it.
Agreed. If he is a wild man, good. Let him be a no-nonsense suspicious wild man who supports the taxpayers, families, and business people of the USA. Rat bastards will be afraid to cross him or be discovered by his administration. He can really show us his community leadership by JAILING (not just fining for 1/10th of the ill gotten gains) people who break the law, and shining a light on unethical behaviors that hurt people.
People need to start going to jail, and soon, if Trump wants to have wide based support. If the members of the House or Senate fail to support a leader who is trying to do the right thing, then it is our job to vote them out of office.
OUR JOB. That means that it is not OK to say, “Washington is a mess, but MY representatives are OK.” Vote them all out if necessary, and remind them who they are supposed to be working for. And by the way, it really should be illegal for Congress to trade on Wall Street using inside information. Hold them to the same laws that we ‘enjoy’.
This’ll be cool. Trump wants value. Boeing, and others, want business as usual. Boeing will probably counter by offering the ‘deluxe version’ with no wing for a couple of hundred dollars less. If Trump does not counter with the equivalent offering to place of a cucumber up Boeing’s a**, I will be disappointed.
Perhaps Trump will accept a lower priced bid from Airbus………
Why do we need 3 AF1 planes that expire at the same time???? For 4 billion? It’s not a spaceship for Christ’s Sake! That’s 4/5ths of the new Bay Bridge in SF!!! For a fracking airplane
Considering that the USS Ronald Reagan Nimitz-class nuclear super-carrier commissioned in 2003 cost a total of about $6.8 billion in 2016 dollars, if the $4 billion figure is correct, that’s a hell of a lot to ask for three mostly just internally customized 747-8 aircraft.
However, there is a lot of communications equipment on-board and added things like a MANPAD countermeasures system (I’ve read about that or speculation about that somewhere on-line) mounted externally and, perhaps, a missile radar homing jammer (just my own speculation). I’d bet there is an electronics countermeasures suite on-board just as in many military aircraft. I mean, why wouldn’t there be?
Airworthiness certification testing of modified aircraft ain’t cheap. Just the 747-8 in airline configuration cost $357 million each, so that’s $1.07 billion just for the unmodified aircraft.
That aircraft has every ECM system the DoD has fielded. Not only is that equipment not cheap, it has to be built into the airframe as the aircraft is put together. Lots of engineering costs to make that happen. 747 was never designed for it.
That being said, I’m happy to see Trump pushing back against Boeing. Cost overruns have been accepted without question since the Reagan administration and it’s about time someone pushed back. The fact that Boeing was allowed to “acquire” McDonnell Douglas was a mistake. That made it so that there is only one company that has the capacity to build a large passenger aircraft, so there is no competition.
He should threaten to give the contact to Airbus.
What would really be nice would be if he canceled F35.
I don’t buy that argument. An AWAC costs an already inflated $ 270 million. Why would two Air force ones cost $ 800 million a piece? The answer is that it has nothing to do with hardware and everything to do with the construction and procurement process. I work with a guy who built the silos where our nuclear waste from our ballistic missiles goes. I’ve never worked in government construction before so I asked him why are government projects so much more expensive than private sector. His answer:
“The reason is that the screw drivers are $ 400 and it isn’t that they paid $ 400, the screw driver cost $ 34, but they need to “hide” the labor costs because if people saw how high labor costs were they would ask why. If they found out why they would have an aneurism. We would have welders sitting, for days sometimes, in front of some structural members they welded because the regs require that said piece had to be under observation 100% of the time until an inspector passed it. The rub being is that sometimes it would take 3 days for an inspector to show up. So we’d pay that welder for 3 days to do nothing but sit in a chair in front of a weld waiting for an inspector”
Oops, I forgot the nuclear electromagnetic pulse (EMP) hardening mentioned in the Wikipedia page about Air Force 1. I can see how that could really drive up the cost.
I’m a Star Trek fan. I remember reading or hearing that one of the Enterprises cost 2 billion space credits. I don’t think Boeing built it as I suspect it would have only gone backwards and at 100mph at full power if they did it for that price
Seriously, Boeing’s counter will be the equivalent of “do you want the vinyl seats or the good ones on it?”
This is going to be one for the history books. He’s just getting started.
Woo Woo.
Winston all military electronic gear is EMP proofed, even the infantry squad radios. Nothing new there.
The new Ford class Aircraft Carriers cost 18 billion to build. This does not count the air wing or the ships built to protect it.
If you want to understand his whole candidacy, and hopefully, his presidency, just read art of the deal. The playbook is laid before you. The last chapter even hints at the presidency in my opinion, written like 25 years ago.
Makes sense. “That a crazy price! Cancel it!” “Well, would you go for this price?”
The current jets, put into service in @ 1989, will be serviceable well beyond 2030 Airlines run the same jets much longer and MANY more hours/landings.
UPS just bought 14 new 747s, retail price of the deal is $5.6 Billion. For comparison. Granted the AF1 jets will be more complex and expensive, but not 4 Billion complex. Hex just, the president of the US is not with 4 billion. (Current or future)
I like the businessman approval he’s. Taking.
Imagine that – expecting value for money. What a novel concept in DC.
If anyone can deliver it, Trump can. One of the advantages of having a business, not academic or community organizer background.
Too bad he wasn’t around when the F 35 project was up for funding… and the ships that the navy didn’t want.
“The statistics that have been cited [by Mr. Trump], shall we say, don’t appear to reflect the nature of the financial arrangement between Boeing and the Department of Defense,” said Obama White House spokesman Josh Earnest.
Hey, Earnest … let me clue you in on how things work:
“The F-35 project has been one of the most expensive military projects in history, and will cost upwards of $1.45 trillion by the time it’s over. No, that was not a typo. The project price is trillion with a T. What’s more, it’s not even ready for service yet, and it’s already cost $400 billion, according to the Government Accountability Office, which is twice what it was supposed to have cost by now.”
http://time.com/money/4310099/f-35-budget-pay-free-college-student-loans/
And because its airframe has to be wide and heavy enough to handle vertical take-offs, its slow and ungainly. It cannot win a dog fight with any modern jets. And to make it super stealthy, weapons systems are stored inside the aircraft. Of course there’s not enough room so the thing can only carry a couple of rockets.
So, yes, it is a $1.4 trillion boondoggle that will lose us wars with Russia or China. But Lockheed shareholders are doing very well. And, in the end, isn’t that what really counts?
Don’t forget that pieces of the F35 are being built in about 200 congressional districts in 46 states. It’s the only jobs program the federal has.
http://www.businessinsider.com/this-map-explains-the-f-35-fiasco-2014-8
Jon the Navy and Air Force waste trillions while the Army and Marines get the scraps. The MIC procurement systems needs to be reformed. Value is not something the MIC worries about. While in the Army we tried to cancel a contract for a Tacfire 1 system as we were fielding Tacfire two systems and a senator showed up in our offices and read us the riot act and needless to say we still accepted the Tacfire one systems or faced closure of the new systems. That is how it works.
Orin Hatch wanted to close the Little Rock Air Force base pack the base up and send it to his home state because one air base received the new C130’s. LR Airbase is where all pilots go to learn how to fly the things. Our congressional creatures play this crap all the time. Thank goodness he did not get his way this time. I could go on and on about the procurement system but nothing will change.
I do hope Trump stops some of these runaway programs. Hell the new 4 billion destroyer cost more then the old class of carriers. This piece of crap destroyers stay broken down. The ford class carrier is still not combat ready even after the trials. Value my ass they are ripping the taxpayers off. There is a reason our ground forces do not have what they need. The naval and air force screw the Army and Marines. Tough to field new ground pounder gear when you do not have the money to procure new gear. Literally all of my wheeled vehicles with the exception of the hummers were older then their drivers.
Modern US air superiority fighters aren’t supposed to dogfight. The comparative advantage that American jets have over other nations is in the sensor technology and ordinance. Our jets can detect and identify an enemy, and destroy it, before an enemy can do the same for us.
You take an American jet into a dogfight and you give up 90% of our historical competitive advantage. Any pilot who does so should have his wings ripped off.
The Obama nature of business with Boeing and the DOD:
Boeing: it costs $4 billion.
DOD (Obama): No, it costs what you invoice us. And thank you very much by the way. Make sure the big guy’s seat has a nice cup holder. Can’t wait to smell the new airplane.
So, after 30 years of “life” Air Force One – actually two planes – “needs” to be replaced.
My brother flew a 30 year old KC-135 in the 1990’s. Guess what? IT is still flying. Those airframes are closing in on 60 years old and are still more than adequate for our service men.
Of course, B-52’s are even older.
If nothing else, Trump Tweets are sure to provide writers and comedians with plenty of material for the next four years.
DJT has almost 17 million followers (and climbing) … admit his tweets were kinda addictive coming down the stretch to the election.
Trump’s Twitter account will be shut down after he becomes POTUS, so he is just enjoying his last twitting days before an 8-year pause. No more fast food for comedians.
“Cancel the order” is exactly the opening offer that would be expected of a master negotiator. The cost of AF One will be coming down. The businesses that have been selling to government for so many years expecting the buyer to waste other people’s money will have to learn to deal with a new regime.
BTW when asked why he “tweets” so much, The Donald said it is because he cannot trust the media to be fair to him and get the facts straight.
Ultimately, Boeing will drop it to about 2/3 of original cost but try to make it up on overruns when it’s out of memory and Trump is busy elsewhere.
Or congress will quietly slip them the money in one of those omnibus spending nightmares they like to pass.
Its a breath of fresh air if a leader considers spending as if it’s hard earned money to get the best possible return on rather than just a bottomless pit from the sucker pleb tax payers or credit markets.
Hopefully it is a shot across the bow to all price-gouging military contractors and suppliers.
Obama did the same to Lockheed and the Presidential Helicopter Program when he first came on board. Not only did it not get half the press this “shot across the bow” is getting (except in Owego, NY where they were being built), it did nothing to stop Lockheed’s on-going price gouging with the F-35.
Trump’s tweet was most likely payback after Boeing CEO made pointed comments about him regarding free trade. Sounding very similar to his rants about Saturday Night Live.
President-elect Trump knows how to run a business and I look forward to having this guy as our President of the United States of America!
Trump loves to capture the attention of the American people by doing and saying unconventional things. Finally we have an entertaining President! No more business as usual. And Trump is very impulsive. On the spur of the moment he gets a wild hair up his ass and does off the wall stuff. Eventually he’ll start publicly insulting foreign leaders and dignitaries. I can’t wait for him to badmouth Kim Jong Un. Somebody needs to put that fat little weasel in his place.
Get ‘n Airbus LOL
$4b is more than the market cap of some S&P 500 corporations. We could use it to buy Virgin America and still left with $1b to spare.
This is the result of all the mergers in the airline industry – no competition. You would think with all the other sweet heart deals Boeing has with the government it would be less over the top with AF 1. Who needs three of these planes? Trump will be going back and forth between DC and NYC. He just needs USMC 1.
He could ask Putin how much a modified Ilyushin Il-96 would cost?
Cancelling the Air Force One contract would make global travel more difficult for future presidents.Trump is shaping a policy of reduction of American interference in other countries’ affairs.