Boeing CEO Dave Calhoun Regrets Trump Air Force One Deal
Boeing CEO Dave Calhoun expressed regret on Wednesday to investors over the company’s Air Force One deal with former President Donald Trump, telling them that the deal was one the company “probably shouldn’t have taken.”
“Air Force One I’m just gonna call a very unique moment, a very unique negotiation, a very unique set of risks that Boeing probably shouldn’t have taken, but we are where we are and we’re going to deliver great airplanes. And we’re gonna recognize the cost associated with it,” Calhoun said.
He cited $660 million in unexpected costs in the first quarter of 2022 in part due to the pandemic, inflation and increased supplier costs.
“You’ll recall it was a public negotiation that happened quite some time ago. We took some risks not knowing that COVID would arrive, and not knowing that an inflationary environment would take hold like it has.”
Boeing CEO on CNBC explains losses in 1Q: "Familiar themes. Supply chain constraints, Covid, inflation, have disproportionate impact on our company in one specific area, and that's our fixed price development contracts."https://t.co/n4GwarIBoS
— Eric Berger (@SciGuySpace) April 27, 2022
The deal was negotiated under Calhoun’s predecessor Dennis Muilenburg in February 2018. The two sides came to an agreement on a $3.9 billion fixed price for two planes instead of making a Boeing-friendly deal that would have protected the company from unforeseen or extra expenses. The deal protected taxpayers by forcing Boeing to absorb additional costs, which Boeing alluded to in a tweet announcing the deal four years ago.
“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,” the tweet read. “President Trump negotiated a good deal on behalf of the American people.”
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. President Trump negotiated a good deal on behalf of the American people. pic.twitter.com/m0HtGfXVlv
— The Boeing Company (@Boeing) February 27, 2018
The deal has the first Air Force One slated for completion in 2024 and the second one ready for service in 2025.