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Trump Wants to Cancel Boeing's $4B New Air Force One Order: Costs 'Out of Control'

Trump Wants to Cancel Boeing's $4B New Air Force One Order: Costs 'Out of Control'

By    |   Tuesday, 06 December 2016 12:19 PM

Six weeks from taking office, Donald Trump says he wants the government to cut some costs by canceling its "ridiculous" and too-expensive order for a new Air Force One, the plane that carries presidents around the globe.

The government has contracted with Boeing to build two or more new planes, which would go into service around 2024. That means Trump wouldn't fly on the new planes unless he pursued and won a second term. But the Air Force has pressed for a faster schedule, saying the current planes are becoming too expensive to repair and keep in good flying shape.

The contract for the planes was to be about $3 billion, but costs have been reported to be rising. Trump tweeted early Tuesday, "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!"

 

 

"Well the plane is totally out of control, it's going to be over $4 billion for Air Force One program," Trump said in New York Tuesday morning. Trump didn’t specify where the $4 billion figure came from. The Air Force has budgeted about $1.6 billion through 2019.

"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," CNBC.com quoted Trump as saying.

The price of Boeing stock dipped after his comments but not drastically. Trump had tweeted in 2013 that he owned Boeing stock, but a spokesman said Tuesday he sold all of his stocks in June.

The company said in a statement, "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. 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."

Trump now uses his own plane, a Boeing 757, which he has outfitted with white leather and gold, a large flat-screen television and a bedroom. But as president it is expected that he would travel aboard the Air Force jet, which is equipped with special safety, defensive and communications equipment. Air Force One also has seating for reporters; Trump generally does not allow the press on his own plane.

The Air Force first announced in January 2015 that Boeing's 747-8 would be used to replace the two current Air Force planes used to transport the U.S. president. Air Force One is one of the most visible symbols of the United States.

Details about the total value of the new contract have not been released, but the Air Force has previously said that it had earmarked $1.65 billion for two replacement jets. The U.S. Air Force awarded Chicago-based Boeing an initial contract worth $25.8 million in January.

Boeing is the latest major U.S. company to be called out by Trump after the president-elect negotiated a deal with United Technologies Corp. to keep more than 1,000 jobs in the U.S. Trump, who turned U.S. employment and corporate tax reform into defining issues during the campaign, has drawn both praise and criticism for directly intervening in companies’ affairs.

Tuesday’s tweet wasn’t the first time Trump has mentioned Boeing. At a February rally in South Carolina, then-candidate Trump said the company “is building massive plants in China,” which he said would be problematic if the Asian nation cut the value of its currency.

On Sunday, discussing the deal to keep jobs in the U.S., Vice President-elect Mike Pence said on ABC’s “This Week” that Trump would decide whether to intervene with specific companies “on a day-by-day basis.”

In a speech Dec. 2, Boeing Chief Executive Officer Dennis Muilenburg called on Trump and Congress to ensure that U.S. companies have the tools necessary to compete in a global economy.

For Boeing, the largest U.S. exporter, that means a reformed tax code, a fair global trade system, regulatory changes that make it easier to close foreign defense sales and re-opening the U.S. Export-Import Bank for business, Muilenburg said in remarks to the Illinois Manufacturers’ Association.

U.S. presidents have used Boeing plane's since 1943, according to the company's website.

The 747-8 planes, 240 feet long long with a wing span of 224 feet, can fly direct from Washington to Hong Kong, 1,000 miles farther than the current Air Force One.

Before Trump's tweet, Boeing was trading at $152.16 a share, CNBC reported. Boeing fell 0.7 percent to $151.07 before the start of regular trading in New York. Near midday, it was near $151.14.

(Newsmax wire services Reuters, the Associated Press and Bloomberg contributed to this report).

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Six weeks from taking office, Donald Trump says he wants the government to cut some costs by canceling its order for a new Air Force One, the plane that carries presidents around the globe.
Trump, Tweets, Cancel, Order, Air Force One, Expensive
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2016-19-06
Tuesday, 06 December 2016 12:19 PM
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