Posted on 04/27/2022 12:41:02 PM PDT by CodeToad
The company revealed that it has lost $660 million outfitting the next presidential jets—so far.
Boeing should have rejected then-President Donald Trump’s proposed terms to build two new Air Force One aircraft, the company’s CEO said Wednesday.
Dave Calhoun spoke Wednesday on the company’s quarterly earnings call, just hours after Boeing disclosed that it has lost $660 million transforming two 747 airliners into flying White Houses.
“Air Force One I'm just going to call a very unique moment, a very unique negotiation, a very unique set of risks that Boeing probably shouldn't have taken,” Calhoun said. “But we are where we are, and we're going to deliver great airplanes.”
Then-President Trump, an aviation enthusiast, took a keen interest in the new presidential jets, involving himself in everything from contract negotiations to the plane’s color scheme. As part of the deal, Boeing signed a fixed-price contract that required the company, not taxpayers, to pay for any cost overruns during the complicated conversion of the two airliners.
In February 2018, the Air Force signed a nearly $4 billion deal with Boeing to convert two 747-8 airliners into a VIP configuration with conference rooms, sleeping quarters, communications gear, and amenities that allow the president to work as if he were at the White House. Along with other costs related to building the planes—for instance, a new hangar complex at Joint Base Andrews just outside of Washington—the Air Force One program is expected to cost taxpayers $5.3 billion.
When the deal was finalized, the White House claimed Trump’s negotiations saved taxpayers $1.4 billion. Boeing’s struggles to build the new planes might in fact save taxpayers more than that when the planes are finally delivered.
(Excerpt) Read more at defenseone.com ...
*ping*
If it was such a bad deal, why did they sign it?...................
Contracts have consequences.
You want your most savvy and competent people writing and negotiating them because the company has to live with agreement. Looks like Boeing didn’t have its eye on the ball.
Boeing wanted an unlimited budget. Only fools sign such terms. Or our govt, usually, but I repeat myself.
May Donald fly in one such new aircraft soon.
So, David, could only buy four $660 million yachts this year instead of five?
Will be ready in 2026. In time for president Trump to take the inaugural flight.
They simply got outnegotiated.
Prestige of AF1.
Great post.
And whose fault is all the cost overruns? Maybe some execs are getting paid a little too much.
How the hell do you lose money on a government contract???
As part of the deal, Boeing signed a fixed-price contract that required the company, not taxpayers, to pay for any cost overruns during the complicated conversion of the two airliners.
—
These military contractor types aren’t use to *that* kind of deal. overruns are a way of life with the taxpayer usually picking up the tab.
Yup. They had one up on jacks when they realized the stands did not have the capacity to hold the weight of the plane. Mow the plane is undegoing tests for damage. #idiots
“Trump made a great deal. Boeing sucks at managing their company.”
Agreed
Fixed cost - the way to do it
Let the MANUFACTURER pay for it’s own cost overruns.
What he’s saying is Trump made a great deal for the taxpayers.
“Then-Boeing CEO Dennis Muilenburg, who was dismissed in December 2019, personally negotiated the Air Force One terms with Trump at the White House and the former president’s Mar-a-Lago club in Florida”
Sounds like Dennis got canceled for working with then POTUS Trump.
quote “The Air Force’s fiscal 2023 budget proposal said the new planes might not be ready to fly a president until at least 2026.”
naaa... they need to finished by 2025 so Trump can take deliver upon re-entering the white house :)
They simply got outnegotiated.
*************
By a master.
When you go up against the best you better have your A team working overtime.
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