Boeing’s CEO regrets the deal his company signed with former President Donald Trump to produce new Air Force One aircraft. David Calhoun said “it was a public negotiation” in which they took “some risks” by agreeing to a fixed-price contract that made Boeing liable if it cost more than expected to convert two Boeing 747 jumbo jets into presidential aircraft.
Calhoun commented on the airplanes when asked about the matter by an analyst during a call to discuss Boeing’s first-quarter results. The company lost $1.2 billion and had to write down $660 million for Air Force One. “We are where we are and we’re going to deliver great airplanes,” said Calhoun.
It was a very unique negotiation, a very unique set of risks that Boeing probably shouldn’t have taken.
David Calhoun, Boeing’s CEO
Calhoun was on the board of directors but not the CEO when Boeing agreed to the $3.9 billion deal with the White House in 2018, and when it accepted a fixed-cost contract to build a new military trainer aircraft, which Boeing just wrote off at $367 million.” They were amortized the day we took them, knowing that we would invest a good amount of our own money,” said Calhoun.
Back in 2018, Boeing tweeted that it was “proud to build the next generation of Air Force One, providing U.S. presidents with a flying White House at an exceptional value to taxpayers.” The Trump White House announced that the deal would save taxpayers more than $1.4 billion.
The jets are being outfitted with advanced communications equipment, workspaces, sleeping areas and other features to make it a flying office for the president. Work is underway in San Antonio, Texas. Boeing sued a subcontractor it blamed for delays last year. On Wednesday, Boeing officials explained that the pandemic and supply chain problems have also slowed work.
It’s unclear what the planes will look like. Trump took a keen interest in the planes and even touted his own paint job, which is still displayed on Boeing’s website. Many purists have called for keeping the current livery, which dates to the era of former President John F. Kennedy. Air Force officials said last fall that no decision had been made.
Boeing promised to deliver the planes by December 2024 under a contract negotiated by then-CEO Dennis Muilenburg, who was fired in late 2019 in the aftermath of two deadly crashes of Boeing 737 Max aircraft. Calhoun confirmed that he no longer wants fixed-price contracts.
