Boeing Responds To Trump
Update: Boeing has issued a statement following President-Elect Trump’s tweet.
“We look forward to working with the US 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,” Boeing spokesman Todd Blecher says in e-mail.
“We are currently under contract for $170 million to help determine the capabilities of this complex military aircraft that serves the unique requirements of the President of the United States,” Blecher says
As a reminder, on Tuesday morning Trump called on Twitter for the cancellation of a Boeing contract to supply the Air Force One aircraft that has carried the American president around the world for decades, citing “out of control” costs. “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!” the president-elect tweeted on Tuesday.
Boeing is building two new versions of the 747 jumbo jet to replace the current fleet of aircraft, which have been in operation for more than three decades. Boeing declined to comment on the tweet. The contract is seen as vital to keeping open the production line of the 747, which first entered service in 1970.
The Trump campaign did not immediately respond to requests for explanation. But Mr Trump told reporters on Tuesday that the cost of the contract was “ridiculous.” “I think Boeing is doing a little bit of a number. We want Boeing to make money but not that much money.”
* * *
Politico reported that The Pentagon is looking to replace its aging fleet of Boeing 747-200 aircraft, which will reach the planned 30-year service life in 2017. Officials have said the next Air Force One jets are estimated to begin operations in fiscal 2023. The Air Force expects the planes to have the range to fly between continents and comparable interiors to the current 747, whose features include work and sleeping quarters for the president and first family.
But it seems President-Elect Trump has other ideas, and it now seems that “aerospace is the new pharma” when it comes to Twitter-based risk factors.
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!
— Donald J. Trump (@realDonaldTrump) December 6, 2016
Indicatively, according to Politico, the Air Force said previously that it had earmarked $1.65 billion for two new presidential aircraft, which will be four-engine Boeing 747-8s.
In any case, algos reacted immediately as follows:
As a reminder, Boeing is 5.5% of The Dow, and with Ex-Im bank on the wires (defending its existence), we note that Boeing’s employee base is near the lowest since 1993:
Boeing: Number of Employees: pic.twitter.com/diDPzXpizv
— Michael McDonough (@M_McDonough) December 6, 2016
And then, moments later, “negotiating” Boeing’s pricing strategy, Trump said that “we want Trump to make a lot of money, but not that much money”
Trump on Boeing/Air Force One tweet: “The plane is totally out of control…we want Boeing to make a lot of money, but not that much money” pic.twitter.com/OnEuw8hfUM
— CNBC Now (@CNBCnow) December 6, 2016
What happens next? This sums things up nicely:
“everyone had a plan until the President Tweeted out that the stock market was in a big fat ugly bubble”
— StockCats (@StockCats) December 6, 2016