A model of the new Air Force One design sits on a table as President Donald Trump, right, meets with Colombian President Ivan Duque, second from right, in the Oval Office of the White House, Monday, March 2, 2020, in Washington. (AP Photo/Andrew Harnik)
A model of the new Air Force One design sits on a table as President Donald Trump, right, meets with Colombian President Ivan Duque, second from right, in the Oval Office of the White House, Monday, March 2, 2020, in Washington. (AP Photo/Andrew Harnik)
Boeing CEO Dave Calhoun told investors on Wednesday said that company executives should not have agreed to then-President Donald Trump’s terms for the Air Force One contract four years ago, citing $660 million in cost overruns in the first quarter of 2022.
Without naming the former president, Calhoun characterized the $3.9 billion contract signed in 2018 to develop two replacement aircraft for the White House as a “very unique negotiation” that Boeing probably should not have taken.
“But we are where we are, and we’re going to deliver great airplanes and we’re going to recognize the costs associated with it,” Calhoun said.
Trump got personally involved in the negotiations for the replacement aircraft. In February 2017, Trump said the Air Force was “close to signing a $4.2 billion deal” and that “we got that price down by over $1 billion.”
“President Trump negotiated a good deal on behalf of the American people,” Boeing said in a tweet after the contract was finalized.
Instead of negotiating a contract that protected the company from changes in supply costs and other factors, Boeing and Trump settled on a fixed-price contract that forces the company to carry the risk and not charge the government.
A Boeing spokesperson said Calhoun's remarks on Wednesday were referring specifically to problems with fixed-price contracts. The spokesperson declined to answer when asked whether Calhoun was directly blaming Trump, saying the CEO's comments speak for themselves.
The deal was negotiated under then-CEO Dennis Muilenburg. Calhoun took over as Boeing CEO in January 2020 and Muilenburg retired.
Muilenburg could not be reached for comment.
Calhoun laid out several issues during the call with investors, saying the $660 million charge was related to schedule delays and higher supplier costs that the company must absorb.
But Richard Aboulafia, managing director at AeroDynamic Advisory, said Calhoun shouldn't be blaming Trump.
"There is absolutely no evidence or indication that Trump's Air Force One maneuver is the cause of program problems. The budget was the same before and after," he said. "It seems like something you say to make just another program screw up look like it's less of the company's fault."
Boeing is scheduled to deliver the first Air Force One aircraft in 2024 and the second plane in 2025.
Keep it Clean. Please avoid obscene, vulgar, lewd,
racist or sexually-oriented language. PLEASE TURN OFF YOUR CAPS LOCK. Don't Threaten. Threats of harming another
person will not be tolerated. Be Truthful. Don't knowingly lie about anyone
or anything. Be Nice. No racism, sexism or any sort of -ism
that is degrading to another person. Be Proactive. Use the 'Report' link on
each comment to let us know of abusive posts. Share with Us. We'd love to hear eyewitness
accounts, the history behind an article.
(0) comments
Welcome to the discussion.
Log In
Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.