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Air Force One debacle: Boeing has now lost more than $1 billion on each of the president’s two new jets

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Boeing has been reporting losses on the planes for years, as CEO Dave Calhoun admitted last year that the company should never have signed the contract with the Air Force to produce the jets for $3.9 billion. Under pressure from then-President Donald Trump, who was threatening to cancel the contract for the planes, Boeing agreed to a fixed price contract on the two new jets. (www.cnn.com) More...

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cmuncy
Chris Muncy 49
This is what happens when Boeing signs a fixed cost contract that holds their feet to the ground on prices instead of the open ended contracts that allow them to keep increasing the prices for final products that they are used to signing with the govt.
Mluke1
Marvin Luke 18
Boeing needs to get better cost estimates prior to bidding these fixed price contracts. It’s tough. The folks who have real experience and are most knowledgeable are busy working other programs. Retirement has also depleted the workforce. But bottom line is that Boeing needs to insert more of these capable engineers and managers into the initial bidding process.
TimDyck
Tim Dyck 13
Part of the problem is that they are used to being able to bid low and then charge for cost over runs. It has become the standard when dealing with government contracts and when suddenly not allowed we get to see how badly messed up this system is. It’s partly Boeing, partly the bureaucracy, partly the politicians and even partly the voters who are at fault for letting it get this bad. So now the question is do we continue to follow this path of ludicrousy or do we demand that it ends.
SkyAware123
SkyAware123 3
It's quite simple. Boeing needs to sign the same contracts with all suppliers for this contract. This wouldn't happen.
Scumhook
Scumhook 2
omg how daare yewww
The MOST important things are DIE and ESG. Silly things like "profit" and "staying in business" don't matter any more!! It's 2023, everything's free, we will own nothing and we will be HAPPYYYY!!!!!
jbsimms
James Simms -7
Estimates were made before the chinese flu hit, then everything (including prices) went to h*ll in a hand basket. Not saying Boeing can’t do better, but before then no one knew of the difficulties encountered.
Gslager
Greg Slager 6
Not sure if the tax payers don’t eventually pay for it in the form of loss being deducted from taxes? Higher price passed on to other aircraft commercial and military! Corporations never really lose, tax payers always get it in the wash!
ColinSeftel
Colin Seftel 19
Boeing aren't very good at making money on FFP contracts (another example is the Starliner program for NASA) but they will more than make up for these losses through DoD contracts for C-17, KC-46, B-52 upgrades, etc. etc.
rhkennerly
Rick Kennerly 5
Without details of why the cost overruns, this debate is kinda of useless. I served a tour on Andrews AFB, not in the VIP unit, but i hung around with a lot of the techs & maintenance staff. AF1 is anything but stock Boeing. A huge amount of the cost is the proprietary tech from multiple sources, none of which in Boeing’s ability to control. In this case, after the basic airframe & engines, Boeing is acting as a custom configurator of (in some cases) equipment that wasn’t even available at the time of contract. When the AF draws up specifications for AF1, they have to try to counter threats 10 years down the road.
pbialla
Paul Bialla 11
All this nonsense about Boeing should have..., Boeing needs to..., Boeing didn't..., etc. Boeing is the world's largest producer of commercial aircraft; every one of those sales is, in effect, based on a fixed price contract. Get over it.
jrgp1
Wrong. Airbus is no 1. With Boeing's help.
francoismarathon
Correction: Boeing used to be the world's largest producer of commercial aircraft... until 2003.
greerbk
Greer Kemp 3
Yep... just got this...

"In the fiscal year of 2020, Airbus was the largest aircraft manufacturer in terms of revenue and number of aircraft deliveries. Boeing was the second leading manufacturer of aircraft in that year, followed by Canadian Bombardier Aerospace and Brazilian Embraer."
TimDyck
Tim Dyck 7
Bombardier is no 3? Wow my countries taxes at work producing low quality products at a low price wile the Canadian government pays for all the extra costs. Americans think their government is messed up but they have no clue about how bad it is in Canada. Count your blessings cause it could be worse.
tangolimagolf
I lived most of my young life in Boise, Idaho. Every time a contract for a certain jet line ended (finished production) we would get flooded with out of work and on Washington state benefitted and Boeing benefitted workers unemployment payments from good old Boeing. When a new production line opened up, they would all leave their rentals (or second homes) and get back to work. Then Boeing started outsourcing some production lines and some of the pool dried up. Then with the advent of personal computers and undreamed of computing power, Boeing was better able to estimate their production needs. Seems like they have the HR problems down pat but the LIFO/FIFO bugaboo is still a problem.
N107Sugar
N107Sugar 10
A classic case of expecting more and more with unrealistic cost explanations. The cost overruns aren’t the 747 hull. It’s all the technology our government is demanding. Should we blaming Boeing or our military and security agencies?
tsallenarng
Anthony Allen 16
I don't lay all blame at the feet of our government because this isn't Boeing's first rodeo with a POTUS aircraft. They presumably know how to manage a contract.
swanaero1
swanaero1 4
I used to work in the construction industry, every change cost money. Boss got burned once or twice. On some projects we implemented change forms (with an estimated cost9 move a window...money, change cabinets money etc......clients wife was in almost daily with changes, the 100k bill at end on phase was disputed by the client, until all change forms were produced. Didn't see his wife again. All these folks with their fingers in the pie cost money.
Kharris1945
Kevin Harris 22
Businessman negotiator vs Government negotiator.
Nooge
Nooge 8
Ruthless I win you lose bully

Donald Trump Has a Long, Long History of Not Picking Up the Check
The former president loves leaving promises unfulfilled and bills unpaid.
crob3030
Carey Roberts 5
I would love to sell you anything that you have to finance. I’ll give you X for Y. Trump made a contract that was good for taxpayers. Even Boeing said they shouldn’t have entered into that. How are you blaming Trump and saying he has a long history of not picking up the check? That make no sense here about what happened, but that’s typical.
crob3030
Carey Roberts 3
One example of why Trump negotiated a good contract as is, knowing as soon as the unions smelled a shiny new multi billion dollar contract the wolves would want to “re-negotiate” their contracts there by immediately raising the cost of something not even built yet at the expense of the taxpayer. Workers getting paid a negotiated compensation package getting a raise that tax payers and Boeing customers pay for. But blame it on Trump lol.
SkyAware123
SkyAware123 -2
It's typical left wing sheep bla bla. dumb as a rock and doesn't even understand (or care) it's tax payers money and not Trumps. A real idiot.
sparkie624
sparkie624 3
Donald Trumps job was to get us the best deal, the Best Deal Possible and he did so... Boeing Agreed to the Price.. How is this Trumps Fault... Give me a break... If you sell your house and you don't make as much as you thought you should you can't go back after the contact and renegotiate... Your statement is totally illogical and makes no since.
Nooge
Nooge 2
Saved taxpayers a few billion ...


You still falling for that Con Kevin ? You must be a Conned -servative

For the record in 4 years he added $8 TRILLION

Con artist POSOTUS vs POTUS


Donald Trump ran for president as an outsider decrying the mounting national debt, which had surged under Barack Obama as he guided the nation out of a deep recession and implemented his health care programs.

"We can't send another politician to the White House," Trump tweeted on July 24, 2015, a few weeks after he announced his candidacy for the presidency.

Several months before the 2016 election, Trump pledged he would be able to eliminate the national debt – then around $19 trillion – “over a period of eight years.”

In an interview with the Washington Post, the future president said that his plan to renegotiate trade deals with foreign countries would create surpluses that would help draw down the debt.
jrgp1
Jose R Gonzalez -7
You watch too much CNN and read too much Washington Post. Try watching and reading something more filled with facts, not fiction or political rhetoric.
JMARTINSON
JMARTINSON 0
You watch too much FOX and read too much New York Post. Try watching and reading something more filled with facts, not fiction or political rhetoric.
SkyAware123
SkyAware123 -3
step away from cnn, sheep.
CrtMori
Crt Mori 25
The title should be: Donald Trump saved taxpayers 1 billion dollars as Boeing wrongly estimated the project costs

And I am not a fan of Trump, but in this case, dude did a good job.
srobak
srobak 15
2 billion. 1B each plane, according to the article. And it is only going to get worse from here. Don't worry - I am sure they will find some way to blame him for saving the taxperys money. lol.
garritt
garritt 0
ha. ha.
Cleffer
Cleffer 12
Sounds more like a poor business decision by Boeing and good deal for the government on an FFP contract. Companies need to bid lean as possible to win an FFP... and here you are, Boeing.
Doodybutch
Doodybutch 18
Boeing has been screwing the US taxpayers for many years and making enormous profits from military cost plus style contracts. For once they are on the receiving end. Boo-hoo-hoo.

Meanwhile, the B747 is already obsolete so WTF is the US doing buying new 747's? I think somewhere in (equally obsolete) US law AF 1 has to have four engines and has to be made in USA. This leaves one choice.
srobak
srobak 4
Yep. The C-5 Galaxy :)
dtgriscom
Daniel Griscom 3
Can that be fitted for a whirlpool tub?
sparkie624
sparkie624 3
Probably has Been!
johntaylor571
John Taylor 0
Park a luxury RV inside and use that as the comfort pallet.
avionik99
avionik99 16
Wow! How do you lose BILLIONS on Updating a couple jets that have been built already?
jbsimms
James Simms 19
Not your ordinary 747 going to a civilian airline. A good amount of modifications including hardening against EMP, extensive communications gear, Executive Suite, Medical Care, etc…
Citabria636
James Banas 8
Very true but as a retired USAF pilot I'm most concerned on something that is not going to be installed - the aerial refueling system that previous AF1 747's had. If the shtf and a president manages to get aboard, it will only be able to stay aloft for the duration of the fuel load. Circumstances may dictate a need to stay airborne longer. My two cents worth.
jbsimms
James Simms 5
Agree w/you on that one. Sort of like the Marines getting rid of their M1 Abrams Armor, depending on the Army. The Marines; I’m afraid, may regret that one one day.
johntaylor571
John Taylor 4
I was a KC-135 crew chief/supervisor for twenty six years. I hadn't heard they were getting rid of the A/R receiver capabilities. What a huge mistake. What's next, removing the E-6 A/R system?
sparkie624
sparkie624 1
Thank you for serving!
beilstwh
beilstwh 3
that was a decision made by the government. it was felt that all the plane needed to do was get to the nearest base. it's something that had never needed to be done in the past, was it a mistake? I believe so
SteveTarr
Steve Tarr 3
Great points. So good to read your thoughtful comments. Thank you.
mbrews
mbrews 21
1. By making a quick "snap offer" without due diligence. 2. The approach is to retrofit an already built commercial B747-8, to become a highly customized secure aircraft.

Plenty OF electrical, structural & hydraulics changes, to accommodate an "air-stair " at the left side belly. Lots of engineering and labor for a "two-off" project .
SteveTarr
Steve Tarr 4
Also, thank you for your comments about modifications. This is not a simple airline 747, yet the airframe is tried and true.
beilstwh
beilstwh 3
almost every wiring harness and piping had to be removed and modified to fit the modifications. current estimates are that it would have been much cheaper to build from scratch then to modify an existing aircraft .
SteveTarr
Steve Tarr 3
There are good thoughtful comments in this thread by James Simms and mbrew. Take a look below, and thanks to them for being constructive and interesting.
sparkie624
sparkie624 11
But look at all the money that they are making off the Military Jets!
siddallsteve8
Steve Siddall 5
Through Life Support for 50 years ;)
mbrews
mbrews 1
Well stated. Lose money on the “razor “ but get cash flow from the “razor blades “
pghuman
Piet Human 8
The art of the deal?
swinkey58
Daniel Hagan 9
Very smart of President Trump to require a “fixed price contract”.
btweston
btweston 4
“Smart” is an interesting word for it.
1ValerieScott
Valerie Scott 1
yes, only thing he did that made any sense.
ddjane6
Diane Weir 11
Loss on 2 planes while they are profiting massively off of commercial airlines. Please stop complaining Boeing. Trump negotiated a good deal. Boeing is used to upping the costs on the tax payers dime when it comes to a government contract. Deal with it .

[This comment has been downvoted. Show anyway.]

tlillis4
No sympathy! Between this, the 737 MAX, and SLS I'm beginning to think Boeing couldn't design a paper airplane.
mikenitschke
How can a company like Boeing let this happen. If I ran my company like Boeing I would be broke now.
TimDyck
Tim Dyck 1
How far in debt is Boeing? Your company cannot afford the amount of debt they carry.
amerson
Rick Amerson 2
Bid was off by 50% after contingencies!! Somebody needs to be fired.
swanaero1
swanaero1 2
More likely someone in accounting brought it up, and was squashed/ignored
wthomp1476
Danny Thompson 4
Should have told Trump cancel the damn contract.
srobak
srobak 5
Why? It was an excellent deal for the taxpayers. Why would you want to be costing them billions more?
rmchambers
rmchambers 7
Because orange man bad.. :)
Nooge
Nooge 0
We got an excellent deal right ? he saved us $2 B while adding Trump $8 T to the $19bTbwe owed knucklehead

Donald Trump ran for president as an outsider decrying the mounting national debt, which had surged under Barack Obama as he guided the nation out of a deep recession and implemented his health care programs.

"We can't send another politician to the White House," Trump tweeted on July 24, 2015, a few weeks after he announced his candidacy for the presidency.

Several months before the 2016 election, Trump pledged he would be able to eliminate the national debt – then around $19 trillion – “over a period of eight years.”

In an interview with the Washington Post, the future president said that his plan to renegotiate trade deals with foreign countries would create surpluses that would help draw down the debt.
EB333
Erik Bruner 4
Well that article was somewhat daft.
Loss loss loss Donald Trump loss loss loss. How about some kind of a chart showing where the money went?
Contracts have clauses that allow for cancellation in such cases. Why would be Boeing be worried? Who else was going to build them? Airbus? I think not!
ColinSeftel
Colin Seftel 10
If Boeing cancels the contract they don’t get the $3.9 billion selling price.
tsallenarng
Anthony Allen 4
Maybe Airbus should be building it.
srobak
srobak 3
AB isn't a US company. They cannot build it.
francoismarathon
The requirement was not that the maker be a US company, but that the planes be built in the US.
The A380 was the only suitable model, but it was built in Europe only, and you don't create a new production line (or a new plant) to produce 2 planes.
srobak
srobak 3
A distinction without a difference.
khanfam
Iftikhar Khan 3
Boeings need for greed and caving in to Trumps bullying tactics got them in tis mess
They deserve it. Too bad the average Joe will be the scapegoat
srobak
srobak 1
it's not bullying. It is smart business dealing, and it is well past the time that the usgovt got back to making deals like that. They days of the bottomless purse at the cost of the taxpayers is over.
BillOverdue
Bill Overdue 0
Caving in? Are you high? It's called "negotiating"...
chuckchern
Just another failure in a growing list from what used to be a great company. The only losers in this example are the stockholders. Have a chat with families of those who died on the 737 max and see how they feel about Boeing.
CombatGuido
Guy Rovella 7
When they merged with MD it all went to hell.
splautz
splautz 2
One of the rare good things that Trump did. Hope fixed price contracts become the standard going forward. Let Boeing get their act together and learn how to do it at the price they agree on.
SkyAware123
SkyAware123 0
You must believe in santa clause. Do you really think the government isn't going to pay the full price for this ? Dream on.
TimDyck
Tim Dyck 2
“Very often higher costs on defense contracts can be passed onto US taxpayers, but under pressure from then-President Donald Trump, who was threatening to cancel the contract for the planes, Boeing agreed to a fixed price contract on the two new jets.”
This shows were the problem lies, Boeing and others bidding on government contracts are used to just charging their extra costs to the taxpayer. This has become so normal that when forced to follow the contract they signed they lose money. We need to get back to contracts being honoured and companies not bidding low and then gouging the taxpayer. I’m not a Trump fan but I agree with what he did here.
1ValerieScott
Valerie Scott 2
price gouging. They could build a space shuttle for 1 billion. They'll make it up on all the other DOD pork projects.
1scatman1
1scatman1 2
Further down in the CNN article, 'The latest loss on the Air Force One jets is only a fraction of the losses reported by the troubled aircraft manufacturer...Total losses at the company now total $25.5 billion since the grounding of its 737 Max jet for 20 months'. So there are many other losses, but the AF1 contract gats press because Mr.T. was involved.(?)
Trump may be an egomaniac, but good example here of saving taxpayer dollars.
sparkie624
sparkie624 2
Was just thinking about this... They really have not lost much at all.. Keep in mind that all losses are Tax Deductible... I think this is blown out of proportion!
N3TRO
Mike Tarab 2
Too generic to say they "lost" 1 billion. What does it cost to make, how much profit was baked into the 3.9? In other words, they might've still made a profit, just not as much as planned. Big whoop. The real takeaway highlight here is how Trump negotiated this, passing along savings to the taxpayers.
jseeliger
James Seeliger 2
Sounds like Trump made another great deal for the American taxpayers.
patpylot
patrick baker 2
Boeing got reemed by trump, threatening to pull the AF1 deals. Question: who else in the world could build any presidential transport aircraft? Calhoon blinked, blew the deal, got flummuxed by Trump, and still holds his job. unreal....
JMARTINSON
JMARTINSON 4
Question: Who was CEO when Boeing was reemed by Trump?
Answer: Not Calhoon.
ultramac
Andrew McNeil 1
Boeing does not have any idea of how to run a company. Underpaid inadequate engineering staff, they thrive on employing over rated MBA's for many aspects of their business. Wake up Boeing, do you smell the coffee
SkyAware123
SkyAware123 1
It's beyond ridiculous that 2 new jets will cost 5.9 billion to shuttle a demented old fool around the world. It's time to end the endless waste of taxdollars on this BS.
WimBonner
William Bonner 1
How much of the cost overruns are internal expenses run out of control because Boeing employees are used to inflating expenses in cost plus contracts?
msetera
msetera -3
The plane's callsign should be changed to Air Force Zero to honor the current occupant of 1600 Pennsylvania Ave.
srobak
srobak 0
truth
Rozwellb
Bob Bingham 0
Funny how fast TDS victims forget Covid! (At Nooge)
AUSTIN98021
AUSTIN GREGORY 1
You must not understand the Govt. If they ask for a change order, they pay for it. There was a SOW (statement of work) provided to Boeing and they bid on the RFP (request for proposal) so none of this would be a surprise. The main problem with Boeing is the culture of laziness established by over protective unions and coddled workers. Just compare the inability to produce the SLS (space launch system)on time or budget. But now compare this to SpaceX. Not only did they come under budget, they designed advanced recovery of the boosters, lowering the per launch cost to space, while developing the Falcon Heavy and Starship all with funds allocated for the Falcon 9. All of which had changes by multiple DoD entities as to mission perimeters, and some how not only did they get done, they got done under budget and time.
TimDyck
Tim Dyck 0
Space X is still having issues with Starship. I am sure that they will overcome these issues but the best part is that as a private company Space X pays for the research and development.
DollyBailey
Dolly Bailey 1
We pay for these planes with our taxes! Thank you President Trump for making a good deal! Boeing needs to better manage their expenses and they will make a profit!
rhkennerly
Rick Kennerly 0
Trump wanted Tupolev actually.
srobak
srobak 1
That is patent bullshit.
skylab72
skylab72 2
Actually it is blatant satire.
drtingley
DAVID TINGLEY -1
President Trump looking out for the American taxpayers!
RandyBarr
Randy Barr 0
Oh let me get them a crying towel. One less billion of profit won’t hurt them too much
brentaustinlee
Brent Lee 0
The consummate businessman vs typical corporate incompetence…
vsigler
Von Sigler -1
As usual, Trump got shit done. Biden would still be waiting for Boeing to build gender fluid bathrooms.
BillOverdue
Bill Overdue -1
Since Trump held their feet to the fire on pricing they still screwed up! A couple of billion isn't even pocket change to Bidens wasteful $4 TRILLION!
joeserdynski
Joe Serdynski -4
the golden touch ! ! !

[This comment has been downvoted. Show anyway.]

[This comment has been downvoted. Show anyway.]

srobak
srobak 2
this is obviously a satirable statement

[This comment has been downvoted. Show anyway.]

crichardfrancis
Richard Francis 15
This isn't exactly relevant to the article, and nor is it comprehensible (no context, unexplained abbreviations ...)
JMARTINSON
JMARTINSON 1
Allow me to translate, Richard. He's complaining about a hesitant liberal female medical provider his company had to fly around the countryside like some kind of princess. She got her trump hating panties in a bunch because too many physical therapists have guns. He also makes more than minimum wage and he is not in a group if heathens.

[This comment has been downvoted. Show anyway.]

crichardfrancis
Richard Francis 15
MAGA was not in this post. TDS and PT are not understandable to a Brit. I could probably find any number of British-English abbreviations which would be equally incomprehensible to an American. But in an international forum I wouldn't use them.
onetell99
Philip Taylor 1
You can’t say things like that on here! 😱
rockingh0rse
Stuart Barkley 4
And you must think the world stops with the Pacific on the left and the Atlantic on the right?
dogwoodfarms
greg mooney 4
you forgot flat, too
fireftr
Dale Ballok 10
Have no idea what you’re trying to say! You start with “medical provider”! What is they? Very confusing post!
CombatGuido
Guy Rovella 2
I'll bet that made sense in your head.
tsallenarng
Anthony Allen 2
Nice word salad!

[This comment has been downvoted. Show anyway.]

tsallenarng
Anthony Allen 6
You DO get that the story is quoting Boeing re the losses they are reporting, right? If CNN is not being "trustworthy" with this story, then by definition Boeing is also not trustworthy.
MikeJocz
Mike Jocz 1
I’m sure the non qualified talking heads at Fox spews is much better
srobak
srobak -6
Actually this is the first piece of honest reporting they have done in quite some time. They will never admit it - but this was a damn good deal that T made - and has saved the taxpayers billions of dollars while holding Big B's feet to the fire. Of course CNN will never go that far in admitting such.
srobak
srobak -5
aaaaaaand here comes the butthurt brigade with their usual downvotes for the truth. lol ThisIsNotYourSafeSpace.
CombatGuido
Guy Rovella 3
A sad attempt tp preempt. Apparently it's not your safe space either.
JohnMcNeill
John McNeill -1
Too many ‘labor’ issues. They should move to a state that ia a right to work state, like NC
Giakoumisforce
Julie Giakoumis -5
I love the 747 in any configuration. My only regret is never being invited to go for a ride on Air Force One! After all I pay taxes! What better way to spend our $$$! All the rest wont be resolved too much bickering to come to anything sensible.Enough said!

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