https://www.cnbc.com/2022/04/27/boeing-l...-deal.html

CNBC: Boeing lost $1.1 billion on Trump Air Force One contract; CEO regrets deal

Boeing disclosed Wednesday that it has lost a whopping $1.1 billion in costs related to its deal with the Trump administration to modify two 747 jumbo jets to serve as Air Force One — and CEO Dave Calhoun admitted the aviation giant “probably” should not have cut the deal in the first place.

Even more losses on the Air Force One contract could be coming in future quarters, Boeing warned in a regulatory filing.

Air Force One is the official designation for any plane carrying the president of the United States.

“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 on a call with analysts.

“But we are where we are, and we’re going to deliver great airplanes,” Calhoun said, shortly after Boeing reported a loss for the first quarter of 2022.

“And we’re going to recognize the costs associated with it.”

Boeing on Wednesday disclosed a net loss of $1.2 billion in the first quarter, with a charge of $660 million associated with delays and higher costs for the Air Force One program.

The company said that the first-quarter charge on the Air Force One program brings the total loss tied to the program to more than $1.1 billion.

“Risk remains that we may be required to record additional losses in future periods,” Boeing said in a securities filing.

Boeing’s deal for the Air Force One jets was cut by then-CEO Dennis Muilenburg and then-President Donald Trump in February 2018.

It requires Boeing, not the federal government, to eat the costs of any overruns in the cost of modifying the two Boeing 747 jets.

Under that fixed-price contract, Boeing is being paid about $4 billion for the work.

Trump in 2018 bragged that “Boeing gave us a good deal. And we were able to take that.”

Four years ago, Boeing spoke favorably about the deal.

“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,” it tweeted in February 2018. “President Trump negotiated a good deal on behalf of the American people.”

Trump also told CBS News that the planes would get rid of Air Force One’s traditional baby blue color scheme in favor of “red, white and blue, which I think is appropriate.”

“Air Force One is going to be incredible,” Trump said at the time. “It’s going to be top of the line, the top of the world.”

A month after being elected president in November 2016, Trump had griped on Twitter about the “out of control” costs of Boeing’s then-deal to build a new Air Force One.

“Cancel order!” Trump tweeted at the time.

He later boasted that his negotiations with Muilenburg saved $1.5 billion for taxpayers.

Boeing fired Muilenburg as CEO in December 2019 for how he handled two crashes of the company’s 737 Max jets that killed 346 people.

He was denied a severance package, but received $60 million in pension benefits and company stock, Boeing said a month after he was ousted.

So President Trump is still saving taxpayers money... WINNING!!!

(04-27-2022 01:43 PM)UTSAMarineVet09 Wrote:  So President Trump is still saving taxpayers money... WINNING!!!

My first thought was that was one heck of a deal Trump negotiated for tax payers. I always found his comments on those negotiations at rallies to be very amusing.

(04-27-2022 01:46 PM)Attackcoog Wrote:  

(04-27-2022 01:43 PM)UTSAMarineVet09 Wrote:  So President Trump is still saving taxpayers money... WINNING!!!

My first thought was that was one heck of a deal Trump negotiated for tax payers. I always found his comments on those negotiations at rallies to be very amusing.

A man of his word!

What an f-ing joke. The government will bail them out anyways.

(04-27-2022 01:50 PM)Eldonabe Wrote:  What an f-ing joke. The government will bail them out anyways.

Yup. That's why I banged as much stock as possible at start of covid and due to two recent crashes at $92-$130 a share and sold out at $251.19 a year and one month later.

Poorly run company from a business side and lately engineering (one model at least) but a duopoly with Airbus over commercial planes so they get a way with it.

So, Trump locked in a price and Boeing got caught not having the materials on hand and ended up getting caught up in Bidenflation.

(04-27-2022 01:57 PM)UofMstateU Wrote:  So, Trump locked in a price and Boeing got caught not having the materials on hand and ended up getting caught up in Bidenflation.

Which said "Incompetent in Chief" will bail them out of ....

(04-27-2022 01:41 PM)natibeast2.0 Wrote:  Trump also told CBS News that the planes would get rid of Air Force One’s traditional baby blue color scheme in favor of “red, white and blue, which I think is appropriate.”

I do hope they're still going with Trump's revised color scheme, I liked it much better than the traditional baby blue.

They're mad they can't sell a full (overpriced)-priced airplane so big no airlines except cargo companies wanted it and even they have stopped buying them.

(04-27-2022 02:49 PM)Gamenole Wrote:  

(04-27-2022 01:41 PM)natibeast2.0 Wrote:  Trump also told CBS News that the planes would get rid of Air Force One’s traditional baby blue color scheme in favor of “red, white and blue, which I think is appropriate.”

I do hope they're still going with Trump's revised color scheme, I liked it much better than the traditional baby blue.

Definitely more of this is The United States of America plane so I have no problem switching back, but I love the baby blue based solely on aesthetics.

Don't worry.. Joe will give them $6 Billion to cover the costs and make up profit

It’s funny, when faced with the prospect of having to pay for cost overruns themselves instead of being able to pass it on to the customer, they were totally lost and had no idea what to do.

#fraudcompany

Makes one wonder how much of their profit is merely bailouts for their incompetence because the company is so big and of such “strategic” importance.

Don’t worry Boeing and Airbus, the BRICS products are coming for you sooner or later.

The Art of the Deal.

Now THAT’S the Art of the Deal.

Circa 1988 or whenever it was.

Sans the pending federal gubment handout, mind you

(04-27-2022 04:06 PM)JMUDunk Wrote:  Now THAT’S the Art of the Deal.

Circa 1988 or whenever it was.

Sans the pending federal gubment handout, mind you

AKA - Pay me now pay me later.

Boeing has really gone downhill over the past decade and I chalk it up to poor leadership in the company.

holy sh*t what a misleading headline! Very quickly into that article is this:

Quote:Boeing on Wednesday disclosed a net loss of $1.2 billion in the first quarter, with a charge of $660 million associated with delays and higher costs for the Air Force One program.

The company said that the first-quarter charge on the Air Force One program brings the total loss tied to the program to more than $1.1 billion.

the author is assigning costs associated with delays (i.e. COVID related problems such as staffing & supply chain backlogs) and inflation to Trump.

Boeing is accustomed to getting associated cost "overruns" covered. They didn't get it this time. Now they're whining about it. and the writer of this article is being dishonest and wrongly assigning blame.

(04-27-2022 04:42 PM)MileHighBronco Wrote:  Boeing has really gone downhill over the past decade and I chalk it up to poor leadership in the company.

Yup. They really arent the company they used to be. Too many mistakes of late.

I remember the days of, "If it's not Boeing, I won't be going." Not any more.