Boeing’s CEO said on Wednesday that the extraordinary contract he and then-President Donald Trump struck for the next generation of Air Force One was a one-time deal that he wanted to avoid repeating.
“I’m just going to refer to Air Force One as a once-in-a-lifetime opportunity, a once-in-a-lifetime deal. Boeing took a unique set of risks that it probably shouldn’t have “According to CEO David Calhoun. “We are, nonetheless, where we are.”
After Trump publicly criticised the program’s price, saying “Cancel order!” and despite Trump’s tough rhetoric on China, Boeing and other US exporters reached an agreement in 2018.
Calhoun promised investors “a very different philosophy” for pricing military projects in advance during the company’s quarterly earnings call.
Boeing agreed to a set price of $3.9 billion, but has since run into complications and additional expenses, putting the delivery of the two 747 jets on hold until the end of 2026, nearly two years later than promised.
The Air Force blamed the delay on a “combination of circumstances” that included “impacts from the Covid-19 epidemic, interiors supplier transition, staffing limits, wire design deadlines, and test execution rates,” according to a statement released earlier this month. At the time, Boeing declined to comment on the delay. The coronavirus epidemic complicated operations, according to Calhoun, because only a small number of personnel have the high-level security clearances required for the project.
“We don’t have a whole number of cleared people to jump into their shoes when a Covid line goes down or a set of workers walks out,” he added.
“It’s extremely problematic for VC-25B, where the clearances are ultra-high,” he continued, referring to the military model number for the jets.
With his deal-making character, the former President took an unusually hands-on approach to the Air Force One deal. To complete the deal, he personally met with Boeing executives at the White House.
He also showed up sketches for a new red, white, and blue colour scheme for the planes.
Other issues affected Trump’s relationship with Boeing. His harsh criticism of China put business pressure on the company. Following two fatal disasters, President Trump personally announced the grounding of Boeing’s 737 MAX jet, which is usually done by the Federal Aviation Administration. His temporary defence secretary, a veteran Boeing executive, eventually withdrew from contention for the permanent job after allegations of domestic violence arose.