“U.S. should ‘cancel order’ for new Air Force One”

USA - President-elect Donald Trump on Tuesday suggested the U.S. government should cancel a planned order with Boeing Co. for planes to serve as the new Air Force One, making the aircraft maker the latest company to come under scrutiny by the incoming commander-in-chief.

The move broadens Mr. Trump’s effort to influence industrial policy beyond rebuking companies for moving jobs overseas by tackling the single largest source of discretionary federal spending: the federal defense budget. In a Twitter post Tuesday, Mr. Trump said the cost for a new “Air Force One” plane for future presidents was “more than $4 billion. Cancel order!” Shares in defense companies have climbed sharply since the election as investors expected the military budget to rise, with Mr. Trump focusing on reforms to the Pentagon bureaucracy to help foot the bill. Wading into the complex system of buying weapons and other military systems and singling out individual programs wasn’t expected, said defense experts.

Defense stocks shrugged off early losses following Mr. Trump’s remarks and were broadly ahead by midday, in line with the broader market. Efforts to replace the fleet of aircraft and helicopters that serve the president have come under attack by previous administrations and even been canceled. The Pentagon is now looking to balance costs and capabilities by rewarding contractors with higher profits if they deliver on time and under budget. “The statistics that have been cited [by Mr. Trump], shall we say, don’t appear to reflect the nature of the financial arrangement between Boeing and the Department of Defense,” said Obama White House spokesman Josh Earnest.

Last week, Mr. Trump appointed Jim McNerney, a former Boeing chief executive, to be on a new board of executive advisers he plans to meet with to discuss economic, regulatory, and labor issues.

(wsj)