Trump on Boe­ing Air Force One con­tract: ‘Can­cel or­der!’

Kuwait Times - - FRONT PAGE -

US Pres­i­dent-elect Don­ald Trump urged the gov­ern­ment yes­ter­day to can­cel an or­der with Boe­ing Co to de­velop a re­vamped Air Force One - one of the most prom­i­nent sym­bols of the US pres­i­dency - say­ing costs were out of con­trol. His bomb­shell was the lat­est ex­am­ple of how Trump is us­ing his podium, of­ten via brief Twit­ter mes­sages, to rat­tle com­pa­nies and for­eign coun­tries as he seeks to shake up busi­ness as usual in Wash­ing­ton. Trump, who takes of­fice on Jan 20, took aim at what he called cost over­runs even though the plane is only in devel­op­ment stages.

“Boe­ing is build­ing a brand new 747 Air Force One for fu­ture pres­i­dents, but costs are out of con­trol, more than $4 bil­lion. Can­cel or­der!”Trump said on Twit­ter. It was not im­me­di­ately clear what prompted the tim­ing of his com­plaint. Trump, who stressed dur­ing his elec­tion cam­paign that he would use his skills as a busi­ness­man to make good deals that ben­e­fit Amer­i­can tax­pay­ers, then made a sur­prise ap­pear­ance in the lobby of Trump Tower in New York, where he am­pli­fied his com­ments.

“The plane is to­tally out of con­trol. I think it’s ridicu­lous. I think Boe­ing is do­ing a lit­tle bit of a num­ber. We want Boe­ing to make a lot of money but not that much money,” he told re­porters. Boe­ing has not yet be­gun build­ing the two re­place­ments for the cur­rent Air Force One planes, which are sched­uled to be in ser­vice by the 2024 fis­cal year, and it was not clear what Trump’s source of in­for­ma­tion was for the cost.

The bud­geted costs for the Air Force One re­place­ment pro­gram are $2.87 bil­lion for the fis­cal years 2015 through 2021, ac­cord­ing to bud­get doc­u­ments. A March 2016 re­port from the Gov­ern­ment Ac­count­abil­ity Of­fice, a watch­dog agency, es­ti­mated the to­tal cost of the two 747’s, which have to be ex­ten­sively mod­i­fied so they can func­tion as an air­borne White House, was es­ti­mated at $3.2 bil­lion. Boe­ing has not yet been awarded the money to build the pro­posed re­place­ments, and is cur­rently work­ing on en­gi­neer­ing and de­sign­ing the air­craft.

“We are cur­rently un­der con­tract for $170 mil­lion to help de­ter­mine the ca­pa­bil­i­ties of these com­plex mil­i­tary air­craft that serve the unique re­quire­ments of the Pres­i­dent of the United States,” the com­pany said in a state­ment. “We look for­ward to work­ing with the US Air Force on sub­se­quent phases of the pro­gram al­low­ing us to de­liver the best planes for the pres­i­dent at the best value for the Amer­i­can tax­payer.”

Some of the sta­tis­tics cited by Trump about the plane did not ap­pear to re­flect ar­range­ments between Boe­ing and the Depart­ment of De­fense, White House spokesman Josh Earnest said. Speak­ing to re­porters, he added that Amer­i­cans would ex­pect that fu­ture pres­i­dents should ben­e­fit from up­grades to Air Force One. Boe­ing shares dipped af­ter Trump’s tweet and were down around 0.4 per­cent in the early af­ter­noon. Shares of sev­eral other ma­jor de­fense con­trac­tors were also lower. Trump, who sold his Boe­ing shares in June ac­cord­ing to a spokesman, named for­mer long-time Boe­ing CEO Jim McNer­ney to a high-pro­file busi­ness ad­vi­sory coun­cil last week. McNer­ney could not be im­me­di­ately reached for com­ment yes­ter­day.

A New York real es­tate de­vel­oper, Trump took aim at big cor­po­ra­tions dur­ing his cam­paign, say­ing that they of­ten harm or­di­nary Amer­i­cans by send­ing jobs abroad. Since win­ning the Nov 8 elec­tion he has taken credit for push­ing United Tech­nolo­gies Corp and Ford Mo­tor Co to back­track on out­sourc­ing plans. Last week, af­ter dis­cus­sions with Trump, United Tech­nolo­gies Chief Ex­ec­u­tive Greg Hayes Car­rier, agreed to keep 800 of 2,100 jobs at In­di­ana op­er­a­tions of the com­pany’s Car­rier unit, in­stead of mov­ing all the jobs to Mexico as orig­i­nally planned. The com­pany agreed to keep an­other 300 jobs at a head­quar­ters oper­a­tion in the state.

Ford, mean­while, in Novem­ber al­lowed Trump to claim credit for a de­ci­sion not to move pro­duc­tion of a Lin­coln sport util­ity ve­hi­cle to Mexico that the au­tomaker had al­ready made. Both Ford and United Tech­nolo­gies said they sup­port Trump’s ef­forts to cut cor­po­rate tax rates and over­haul reg­u­la­tions, which could save the com­pa­nies bil­lions in the long run. But in the short term, his com­ments on Boe­ing put de­fense con­trac­tors on no­tice.

“The chill­ing ef­fect on in­dus­try is huge, if you are a con­trac­tor,” said Franklin Turner, a part­ner spe­cial­iz­ing in gov­ern­ment con­tracts at law firm McCarter & English. “To think that in 140 char­ac­ters (the length of a Twit­ter mes­sage) the pres­i­dent can can­cel a pro­gram is ridicu­lous. There would be a de­tailed re­view by le­gal pro­fes­sion­als on the mer­its of the ter­mi­na­tion.” A Trump spokesman said that his com­ments about the plane re­flected the pres­i­dent-elect’s de­sire to keep down costs across the board, and so save tax­pay­ers’ money.

The US Air Force, which op­er­ates the pres­i­den­tial planes, first an­nounced in Jan 2015 that Boe­ing’s 747-8 would be used to re­place the two cur­rent planes that trans­port the US pres­i­dent. Boe­ing of­fi­cials were caught off guard by Trump’s com­ments since the com­pany is sim­ply meet­ing re­quire­ments mapped out by the Air Force in con­sul­ta­tion with the White House, said de­fense con­sul­tant Loren Thompson, who has close ties to Boe­ing and other com­pa­nies.

The cost of the planes is high be­cause of the unique se­cu­rity re­quire­ments and com­mu­ni­ca­tions equip­ment, Thompson said. “Air Force One has unique mis­sion re­quire­ments, in­clud­ing pos­si­bly hav­ing to op­er­ate in a nu­clear war,” Thompson said. “Of course it’s not like buy­ing a vanilla Boe­ing jumbo jet.” US pres­i­dents have used Boe­ing planes since 1943, ac­cord­ing to the com­pany’s web­site. — Reuters

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