Boeing is experiencing buyer’s remorse over a $3.9 billion deal it struck with then-President Donald Trump in 2018 for new Air Force One planes.
The airline company lost $1.1 billion on the project and “probably” should not have taken the deal, CEO Dave Calhoun told investors on Wednesday, referring to an agreement Trump has frequently hailed as an example of his “genius” negotiating skills.
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“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 during an earnings call on Wednesday, according to Axios. “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.”
During the first quarter of 2022, Boeing suffered a net loss of $1.2 billion, $660 million of which came from the Air Force One contract, according to Calhoun, who pointed to cost overruns associated with the project. He also expressed frustration with fixed-price contracts that pin the risk of overruns on Boeing instead of its clients during the call.
In 2017, Boeing was close to inking a $4.2 billion deal with the government for the new Air Force One planes, Trump claimed at the time. But when he caught wind of the talks, Trump said he intervened.
“The price was too high and the plane was just about ordered and I heard about it and I said ‘cancel the order,'” Trump told National Geographic. “I bought the two planes and actually got a little more plane for the dollar, not less plane, it’s not like gee whiz, we left things off, we got more plane for the money, so I was happy about that.”
Trump has repeatedly boasted during his rallies that he saved over $1 billion and procured an improved coloring design. He kept a model of the new plane in the Oval Office and bragged about the deal to foreign leaders. When the agreement was reached, Boeing made sure to credit him for negotiating a “good deal on behalf of the American people.”
Boeing is proud to build the next generation of Air Force One, providing American Presidents with a flying White House at outstanding value to taxpayers. President Trump negotiated a good deal on behalf of the American people. pic.twitter.com/m0HtGfXVlv
— The Boeing Company (@Boeing) February 27, 2018
In December 2019, the company fired CEO Dennis Muilenburg, who was the head of the company when it struck the deal with the Trump administration. Muilenburg was fired after the company faced public scrutiny for its handling of two crashes of the Boeing 737 Max that killed over 300 people.
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The aerospace behemoth is expected to complete the first new Air Force One plane in 2024 and the second in 2025. Some analysts have suggested that Boeing is attempting to scapegoat the government to avoid blame for internal setbacks on the project. The aircraft is only designated Air Force One when the president is on board.
“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,” Richard Aboulafia, managing director at AeroDynamic Advisory, told Politico. “It seems like something you say to make just another program screw up look like it’s less of the company’s fault.”
