Trump Threatens Cancellation of Boeing’s Air Force One Contract
$4 billion is one hefty price tag
Tuesday, President-elect Trump tweeted costs for plans to build a new Air Force One were “out of control” and that the order should be cancelled.
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
Later, Trump elaborated:
“The plane is totally out of control. It’s going to be over $4 billion for Air Force One program and I think it’s ridiculous,” Trump elaborated in brief comments to reporters at Trump Tower. “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.”
To his credit though, many government contracts are chock-full of waste and often pay substantially more than private-sector rates. The concern for keeping costs down is a welcomed change.
The president-elect’s most recent financial disclosure form, filed in May and detailing his 2015 holdings, showed that the Manhattan billionaire owned between $50,001 and $100,000 worth of stock in Boeing, a purchase he announced on Twitter in 2013. Jason Miller, a spokesman for Trump, said Tuesday morning that had Trump sold all of his stocks last June.
Miller added that the exact details of Trump’s desire to cancel the Boeing order would be dealt with after he is inaugurated next month. But Trump’s comments, Miller said, “really speaks to the president-elect’s focus on keeping costs down across the board.”
Boeing later responded saying their current contract to specifically determine Air Force One capabilities had a $170 million price tag, but didn’t elaborate:
Boeing says it only has a $170MIL contract with the US Air Force— nothing about a $4BIL deal that Trump tweeted. pic.twitter.com/gsgaEnme07
— Kyle Griffin (@kylegriffin1) December 6, 2016
So who’s right? Point goes to Trump in this match. Factoring in upgrades recommended by security experts, the GAO estimates the final product will come in just under $4 billion:
“The planning work that we have done on behalf of future presidents is something that the next administration will have to decide whether or not to carry forward,” Earnest said.
The budgeted costs for the replacement program are $2.87 billion for the fiscal years 2015 through 2021, just on research and development, testing and evaluation, according to budget documents seen by Reuters.
The current Air Force plan envisions extensive modifications to a Boeing 747-8 plane, adding military avionics and advanced communications to a self-defense system.
“Of course it’s not like buying a vanilla Boeing jumbo jet,” said defense consultant Loren Thompson, who has close ties to Boeing and other companies.
A March 2016 report from the Government Accountability Office, the investigative arm of Congress, estimated the cost of the overall program at $3.21 billion, including the purchase of two aircraft.
But the GAO estimated the costs for research and development would be would be lower, at just under $2 billion. If the GAO report used the same Air Force estimate for research and development, then its estimate would be around $4 billion.
$4 billion is one seriously hefty price tag.
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Comments
Sounds like one of Obama admin’s embezzlement scams to repurpose money for other things. Govt is chock full of waste for this very purpose…to be fair to Obama, he is not the first or the last to try any of this crap.
For four billion dollars, it should be able to transform into a giant fighting robot.
Transformer One
You really need to read better.
Nothing Boeing said contradicts Trump.
The $170 million is just to DETERMINE THE CAPABILITIES of the plane. Not build it. Not even buy the tech. Just to plan out what capabilities the plane is going to have costs $170 million. They even said in the same tweet they look forward to working with them on ‘subsequent phases’ of the project.
Trump is firing a shot across the bow of the Defense Industry and their cost overrun mentality.
Also, warning off Boeing from complaining that Trump’s America First trade plans are bad for their business.
If Boeing is talking about $170M, they’re playing a game of apples & oranges. That’s only half the price of a box-stock 747. So obviously they’re pulling a number from somewhere irrelevant.
Two planes (which is what you need to keep one in the air), parts (the damn things need entirely new engines every time you turn around, it seems … new engines are about $25M each), maintenance (almost constant), and the fancy avionics and communications gear both of them need … it won’t be cheap. The military used to figure that the total personnel roster needed to keep an airplane flying (ground crew plus supply chain) was about thirty times the size of the flight crew. That’s a lot of people with salaries, insurance, and 401Ks.
Assuming all that stuff is in The Contract, then $4B isn’t such a bad price. At the same time, Trump is right; it’s ridiculous. The only way to do it on the cheap is for the President to stay home, or fly on a command & control vehicle the military is already operating. Those are goddamn expensive too, but they already have a bunch of them.
Bet it would take more than two Potus and VPotus could be flying at same time AF 1 and 2 , then the need for down time ect
And if the wives fly separately to go to the same vacation hotspots as their hubbies, double the number of aircraft again.
Why the wives would need full communication & control gear, radiation hardening, etc. is one of the many questions nobody ever seems to ask.
Why not stop the contract for Obama’s dog’s airplane.
Upgrade and retrofit the C-17 and let that serve as the President’s plane. Or better yet, choose a smaller, faster and more maneuverable plane to ferry the Prez and kick the reporters off.
Yes, please.
Please, please, please.
At a very high altitude.
It so cool we’ll have a president that cares about the taxpayers nickel. BTW I’m sure they are screaming “insider trading” ” over on the left.
Boeing’s 747 series is entering its senescence, and as production quantities go down costs will go up.
The capacity of a Boeing 777 is not that much less than a 747, yet the 777’s operating and maintenance costs will be lower because it has only two engines. Airbus hasn’t reached break-even on its A380, but, for those willing to pay for four engines it’s a larger airplane than the 747.
Boeing apparently considered creating a 747-500 series and decided demand was unlikely to cover the development cost; thus, I’d expect it won’t be all that long before production of 747s ends for good.
So, Trump’s probably right: building a custom 747 for use as Air Force One is probably not a good value.
“Airbus hasn’t reached break-even on its A380…”
It never will.
iirc the 747 still preferred due to electrical load reasons, 4 engine has more generators.
AF1 fleet has a huge electrical load compared to other aircraft.
and since no 3 engine a/c produced anymore…
4 billion. You can provide health insurance for a good number of people with 4 billion. Want to insure even more people? Stop wasting money on solar energy and wind energy subsidies. Defund a whole bunch of other liberal pet projects and pour that money into health care. And when the left starts screaming, ask them why they want to see people die for lack of health care.
Between now and his December 19 official certification as president-elect, this guy will have done more for jobs and budget sanity than eight years of Obama.
So much for all the talk that circulated during the campaign about his lack of experience and being unfit for office, eh?
I think that Trump may be the only President, and only Presidential candidate, who has actually bought a plane. So he may be the only one who actually knows what a luxury plane should cost.
More likely is, he is the only one to give a damn.
The President should have two planes.
The first one should be a Citation or a Lear.
Just to pop around in the U.S.
Cheap, and no fun. But fast and enough to get from A to B.
The other, a second use 737…
Enough for staff.
The security and all that provided by Air Force escorts.
How many Taxpayer lifetime contributions does it take???
In one of the debates during the primary, Jeb! used Boeing as an example of US manufacturing success and Trump replied that China was forcing Boeing to build a factory in China (and Jeb! cluelessly replied; “C’mon man!”).
I believe Trump’s Boeing comment was another shot at China. While we’re distracted by 4B vs 170M (real issues, too), Trump is calling Taiwan, Celebrating a Japanese investment in the US – $50B SoftBank deal announced yesterday – and throwing further shade at China via the Boeing deal. (A horrible deal where we not only offshore jobs, but give them our technology that they will then sell back to us…..)
The two VC-25s (Air Force One) that we have are the oldest 747s still flying out there. They do need replaced but not for that price. Everything in the military acquisition world is overpriced.