President-elect Donald Trump criticized the construction of a new Air Force One on Tuesday, saying that it was costing more than expected and sending manufacturer Boeing’s stock downward.
Christian Davenport of the Washington Post had the day’s news:
Speaking to reporters later in the lobby of New York’s Trump Tower, he said the effort to build the plane “is totally out of control. It’s going to be over $4 billion for the Air Force One program, and I think that’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.”
The tweet and comments are further evidence that as president, Trump intends to use the power of the office to intervene in individual programs, policy decisions and the actions of companies. And it comes just a week after he pushed Carrier to give up plans to shift Indiana jobs to Mexico. Boeing, by contrast, would build Air Force One in the United States, and canceling the program could cost American jobs.
During his campaign, Trump has repeatedly said he wants to strengthen the nation’s military by expanding the size of the Army and the Marine Corps and buy new equipment, from Navy ships to upgrading the nuclear arsenal—promises that Mackenzie Eaglen, a defense analyst at the American Enterprise Institute calculated could cost at least an additional $55 billion.
But Trump has also pledged to eliminate wasteful spending, and clamp down on costly programs that have gone over budget or lag behind schedule. His tweet comes as the Pentagon is facing scrutiny after The Washington Post reported that the Pentagon buried an internal study that found $125 billion in bureaucratic waste for fear that Congress would slash its budget.
Kevin Kelleher of Fortune reported that Boeing investors remain unfazed:
Boeing’s stock dipped 1% following an early morning tweet from Trump claiming the cost of new Air Force One planes would exceed $4 billion. Calling those costs “out of order,” Trump raised the prospect of nixing the deal. He later told reporters, “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.”
By the afternoon, Boeing’s stock was back in the black in a day of sluggish trading. Investors seemed content to wait to for more clarity on the President-elect’s intentions. As TIME’s Zeke Miller noted, Trump’s team didn’t back up the $4 billion figure and that the tweet may be “a time-honored ploy to demonstrate a desire to cut costs in the bloated Defense Department.”
For now, it’s not clear how hard a blow the loss of the Air Force One contract would be for Boeing, if the blow comes at all. Boeing spokesperson Todd Blecher said the company is “currently on contracts totaling approximately $170 million for the initial design and engineering work” needed before production.
U.S. presidents have been shuttling around on specially-designed aircraft ever since Franklin D. Roosevelt boarded a plane nicknamed the “Sacred Cow” in 1944. The manufacturer of that plane is now part of the Boeing family. The current Air Force One aircraft, however, were manufactured in 1990 and are approaching their planned 30-year service life.
Doug Cameron and Damian Paletta of The Wall Street Journal report that the comments could affect other government contractors:
Mr. Trump’s remarks regarding Air Force One mark the first time he openly attacked a company by threatening to block a procurement contract. It is likely to send signals to other government contractors about his future involvement in their bidding.
“As a general rule, government procurement experts on both sides, the government and the contractor-side, will be extremely anxious,” said Steven Schooner, co-director of the government procurement law program at George Washington University Law School.
Chicago-based Boeing hasn’t yet secured deals to build the planes that would replace the current aircraft used as Air Force One, which have been in flight since the administration of George H.W. Bush.
The two heavily modified 747-200 planes currently used by the president are due to reach the end of their planned 30-year life in 2017. This can be extended a few more years, and the Air Force has said in budget documents it wanted to have the first new jet in place by 2024.
