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Boeing lost billion dollars on Trump Air Force One plane deal


Boeing disclosed Wednesday that it has lost a whopping $1.1 billion in costs related to its deal with the Trump administration to modify two 747 jumbo jets to serve as Air Force One — and CEO Dave Calhoun admitted the aviation giant “probably” should not have cut the deal in the first place.

Boeing issued a regulatory filing warning that further losses could occur on Air Force One contracts in the future.

Air Force One is an official name for planes carrying the President of the United States.

Calhoun, who spoke with analysts, said that Air Force One represented a unique moment in time, a unique negotiation and an unusual set of risk factors Boeing should not have taken.

Donald Trump, the United States President, arrives in Georgia after a day-long trip aboard Air Force One, Joint Base Andrews (Maryland), U.S. July 15, 2020.

Reuters| Reuters

Calhoun stated, “But, we are where they are and we’re going delivering great planes,” shortly afterwards Boeing reported a loss for the first quarter of 2022.

“And we will recognize the associated costs.”

Boeing announced Wednesday that it had incurred a net loss in the first quarter of $1.2 billion. This was in addition to $660 million for delayed payments related to Air Force One.

According to Air Force One’s spokesperson, more than $1.1 Billion in losses were incurred due to Air Force One’s charges for its first quarter.

Boeing stated in a Securities Filing that “Risk still exists that we might be required to report additional losses in the future periods.”

In February 2018, President Donald Trump and Dennis Muilenburg, then-CEO of Boeing, signed the deal to purchase Air Force One aircraft.

Boeing must pay the extra costs for any modifications to the aircraft, and not the federal government Boeing 747 jets.

Boeing receives approximately $4 billion under the fixed-price contract.

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Trump boasted in 2018 that Boeing had given him a great deal. We were able take that.”

Boeing had positive comments about the agreement four years prior.

It tweeted that “Boeing was proud to build Air Force One’s next generation, providing American presidents with an airborne White House at exceptional value to taxpayers,” in February 2018. Trump has negotiated a great deal on behalf the American people.

Trump also told CBS NewsAir Force One’s baby blue scheme would be replaced by “red, blue and white”, which I believe is more appropriate.

Trump declared at that time, “Air Force One will be extraordinary.” It will be “top of the line”, the highest in the world.

Trump was complaining on Twitter about the out-of control costs associated with Boeing’s original deal to build an Air Force One a month before he became president.

“Cancel order!” Trump posted the following tweet.

Later, he boasted about how his negotiations with Muilenburg had saved taxpayers $1.5 billion.

Boeing fired MuilenburgAs CEO, December 2019, for his handling of two fatal crashes of the company’s 737 Max jets. This resulted in 346 deaths.

He was denied a severance package,Boeing announced that Boeing paid him $60 million in stock and pension benefits, a month after his dismissal.