Geek Wire: Donald Trump: U.S. should cancel Boeing contract for new Air Force One
By Alan Boyle and Todd Bishop

President Obama has expressed a deep appreciation for Air Force One, describing the current Boeing 747-200 planes as the best perk of the job. President-elect Donald Trump, who is accustomed to flying in his own Boeing 757, isn’t as enamored with Boeing’s contract to build a new generation of Air Force One planes.

In a tweet today, Trump claimed that costs on the project are “out of control” and called for the cancellation of a deal with the Boeing Co. for two 747-8 aircraft that would serve as Air Force One.

Donald J. Trump ✔ @realDonaldTrump

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!

In follow-up comments to reporters in New York, Trump said the cost of the planes was “ridiculous.”

“I think Boeing is doing a little bit of a number,” he said. “We want Boeing to make a lot of money, but not that much money.”

Chicago-based Boeing, which has extensive commercial aircraft manufacturing operations in the Seattle region, was awarded the new Air Force One contract in January 2015. It was essentially the only company in the running, based on government requirements.

“The Boeing 747-8 is the only aircraft manufactured in the United States (that), when fully missionized, meets the necessary capabilities established to execute the presidential support mission, while reflecting the office of the president of the United States of America consistent with the national public interest,” Air Force Secretary Deborah Lee James said at the time.

She said the program would use multiple strategies so it’s “as affordable as possible while still meeting mission requirements. We will insist upon program affordability through cost conscious procurement practices.”

The current Air Force One 747-200 jets went into service in 1990 and 1991, and thus are near the end of their 30-year design operating lifetime.

Technically speaking, neither of the 747-8 replacements has been officially purchased yet, but Boeing is doing the preparatory work for the custom-modified planes, as the company noted in a statement:

“We are currently under contract for $170 million to help determine the capabilities of this complex military aircraft that serves the unique requirements of the president of the United States. We look forward to working with the U.S. 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.”

The Air Force’s current plan calls for spending $2.87 billion for the two planes through fiscal year 2021. In a report issued in March, the Government Accountability Office came up with a higher estimate for costs in the 2010-2020 time period: $3.21 billion.

Both planes will have to be modified for in-flight refueling, radiation hardening, secure communications and other capabilities that most 747s don’t need to have. The new planes are expected to be ready between 2020 and 2024, depending on how the outfitting goes.

The Air Force sent out a statement in response to questions about Air Force One:

“We are still conducting risk reduction activities with Boeing to inform the engineering and manufacturing development contract negotiations that will define the capabilities and cost. We have budgeted $2.7B in the Fiscal Year 2017 Future Years Defense Program for Research, Development, Test & Evaluaton (RDT&E) but expect this number to change as the program matures with the completion of the risk reduction activities.”

In some quarters, the Air Force One project has been seen as a lifeline for Boeing’s 747 production line in Everett. Earlier this year, the 747 production rate was reduced to one plane every two months due to flagging demand for cargo freighters.

In a joint statement, U.S. Sens. Patty Murray and Maria Cantwell as well as U.S. Rep. Rick Larsen, all Washington state Democrats, touched on the implications of the Air Force One deal for employment:

“Replacing the 26-year-old Air Force One aircraft will support good-paying jobs throughout Northwest Washington and is important to ensuring the safety and security of future presidents. The president-elect’s tweet does nothing to change those basic facts.”

There’s no question that the next Air Force One jets will be built by Boeing. The only questions have to do with the timeline and the cost. With that in mind, Trump may be aiming to practice the “art of the deal” and talk the price down once he’s in office.

Trump has been critical of Boeing on two other fronts: Its plans to open a 737 jet completion and delivery center in China, and its pending sale of more than 100 jets to Iran Air.

Last week, Boeing CEO Dennis Muilenburg said the United States needed to continue to play a leading role in global trade, despite the apprehension that he said became an “overarching” theme during the presidential campaign. Much of that apprehension is coming from Trump and his advisers.

The Chicago Tribute published a column about Muilenburg’s speech online just before Trump leveled his criticism, but it’s not clear whether the publication triggered the tweet or was just a coincidence.

Boeing’s share price declined right after Trump’s tweet. but finished the trading day slightly higher than the previous day’s close, at $152.24.

Update for 6:50 p.m. PT Dec. 6: Several news outlets are reporting that Boeing executives got in touch with Trump and his team after today’s tweet:

Christian Davenport @wapodavenport

Air Force One story updated with news that Boeing CEO spoke with Trump Tuesday about the contract, China and trade: https://wpo.st/MSrJ2

CNBC ✔ @CNBC

Boeing called Trump team after Trump's tweet, said price of Air Force One can decrease if specifications are lowered - source

Bloomberg Politics ✔ @bpolitics

Boeing offers new Air Force One proposal after Donald Trump tweets about cancelling order https://bloom.bg/2h0FwVH