[Rushtalk] Citing high cost, Trump says Boeing’s contract to build Air Force One should be canceled - The Washington Post

Carl Spitzer cwsiv at juno.com
Sat Dec 31 07:56:58 MST 2016



https://www.washingtonpost.com/news/checkpoint/wp/2016/12/06/citing-cost-overruns-trump-says-boeings-contract-to-build-air-force-one-should-be-canceled/   

Checkpoint 

Citing high cost, Trump says Boeing’s contract to build Air Force One
should be canceled




By Christian Davenport December 6 
President-elect Donald Trump on Tuesday took aim at one of the
preeminent symbols of presidential power, saying on Twitter that the
amount the Pentagon plans to spend on a new Air Force One is far too
much and the contract with Boeing should be killed.

“Cancel the order!” he tweeted.

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.

In a call with reporters, Trump spokesman Jason Miller said Trump plans
to closely examine the Pentagon’s budget and look for areas where he can
find savings.

“I think this really speaks to the president-elect’s focus on keeping
costs down across the board with regard to government spending,” he
said. “I think people are really frustrated with some of the big price
tags that are coming out for programs, even in addition to this one. So
we’re going to look for areas where we can keep costs down and look for
ways where we can save money.”

The Air Force hasn’t released a total dollar amount for the program yet.
The program includes two aircraft and is still in the development
stages. So far the Air Force has budgeted $2.7 billion for the program.
But that’s for research, development and testing—not manufacturing. And
the Air Force expects “this number to change as the program matures with
the completion of risk reduction activities,” the Air Force said in a
statement.

[Boeing chosen to build the next Air Force One]

The real cost could grow to $4 billion, according to an analysis by Todd
Harrison, a defense analyst with the Center for Strategic and
International Studies. The aircraft are projected to be operational by
the mid-2020s, officials said.

That price tag was justified because of the enormous capabilities of the
planes, he said. The plane, which flies under the call sign “Air Force
One” when the president is on board, is a “flying command post,”
Harrison said. “In the event of a nuclear attack, this is where the
military will keep the president safe.”
Richard Aboulafia, an aerospace analyst with the Teal Group, said the
“capabilities of this plane were there for everyone to see on 9/11” when
Bush was whisked aboard Air Force One and responded to the crisis from
there.

In a statement, Boeing said it is only under contract for $170 million
for work “to help determine the capabilities of this complex military
aircraft that serves 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 plane
for the president at the best value for the American taxpayer.”

Dennis A. Muilenburg, Boeing’s chief executive, spoke with Trump on
Tuesday afternoon, according to an official not authorized to speak
publicly about the matter. In the conversation, the pair spoke about the
Air Force One contract, trade and China, the official said, though it
wasn’t clear what, if anything, was resolved.

The company wouldn’t be eligible for the more lucrative manufacturing
contracts until after the development is completed.

When the Air Force selected Boeing, it was the only U.S. manufacturer
that could build such an aircraft. The other would be European-based
Airbus.
“We don’t know what it will ultimately cost, but if President-elect
Trump is suggesting we give this work to Airbus, that’s not good for
American jobs,” said Sen. Dick Durbin, a Democrat from Illinois, where
Boeing is based.

While it is Congress that controls the nation’s purse, Trump could have
enormous influence over the Air Force One program. He could pick an Air
Force Secretary who, like him, wants to rein in costs, or go in an
entirely different direction.

That’s what Obama did shortly after taking office in 2009. At the time,
Sen. John McCain (R-Ariz.) took aim at the fleet of presidential
helicopters, saying, “I don’t think that there’s any more graphic
demonstration of how good ideas have cost taxpayers an enormous amount
of money.”

Obama, then just a few weeks in office, said the fleet, generally known
as Marine One, was “an example of the procurement process gone amok.”
That led defense officials to kill the program outright and then restart
the procurement process.

But by then, the helicopter program was well underway and did have
significant problems. The Air Force One program is at a much different
stage.
“It’s still very, very early,” Harrison said. “It hasn’t had a chance to
have any cost overruns yet.”

He said it was curious that Trump would single out Air Force One when
there are so many other defense programs that have gone wildly over
budget and behind schedule.


Air Force One with President Barack Obama aboard departs on a rainy day,
on Dec. 6 at Andrews Air Force Base, Md., en route to MacDill Air Force
Base in Tampa, Fla. ( AP Photo/Jose Luis Magana) This isn’t the first
time Trump has highlighted the costs of Air Force One. In July, he
objected to the use of the plane for campaign events: “Taxpayers are
paying a fortune for the use of Air Force One on the campaign trail by
President Obama and Crooked Hillary,” he tweeted. “A total disgrace!”

He brought it up again at a rally in North Carolina in July. “Now Air
Force One is a very old Boeing 747,” Trump said. “It sucks up a lot of
gas. A lot of fuel. Boy, the fuel bill. You turn on those engines, I can
tell you, it’s a lot of money.”

Boeing could be in a difficult negotiating position. In addition to his
concerns about the plane’s costs, Trump has vowed to rewrite trade
agreements with China, which could have a huge affect on the company.

During a recent talk, Muilenburg, Boeing’s chief executive, said a third
of the 737s it built for customers across the globe went to China,
according to the Chicago Tribune.

“I’m not a political pundit or prognosticator — we have too many of
those — but anyone who paid attention to the recent campaigns and the
election results realizes that one of the overarching themes was
apprehension about free and fair trade,” he said, according to the
paper.

Boeing faces other landmines. It also recently reached an agreement to
sell commercial passenger planes to Iran in a multibillion deal that
would be one of the biggest sales to Iran since the easing of sanctions
last year, an action Trump has criticized.

An Air Force official, not authorized to speak publicly about the Air
Force One program, said that the current presidential plane will be 30
years old next year, and the new ones aren’t slated to come online until
the mid-2020s. By then the technology aboard the current plane will be
dated and it will become increasingly hard to maintain. Any delays to
replace it could cause significant problems, the official said.

Boeing was selected as the manufacturer in January 2015, but it wasn’t
much of a competition. Boeing’s 747-8 was the only plane made in the
United States that could meet the requirements for the presidential
aircraft while also being “consistent with the national public
interest,” Air Force Secretary Deborah Lee James said in a statement at
the time.

She said the Pentagon “will insist upon program affordability through
cost-conscious procurement practices.”




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