Boeing also doesn’t expect deliveries of the plane to start until 2025, more than a year later than it previously forecast. Its shares were down more than 7% in morning trading Wednesday after it reported results.
Boeing has enjoyed a resurgence in demand for its 737 Max plane, which returned to service in late 2020 after two fatal crashes. But production problems and certification delays have hampered other aircraft programs.
Another drag on the company’s earnings? The deal Trump struck with Boeing for its work on the new Air Force One, which has bored a $660 million revenue crater into the company’s balance sheet. In fact, the deal was so bad for Boeing, CEO Dave Calhoun says the company should have rejected it:
Calhoun spoke Wednesday on the company’s quarterly earnings call, just hours after Boeing disclosed that it has lost $660 million transforming two 747 airliners into flying White Houses.
“Air Force One I’m just going to call a very unique moment, a very unique negotiation, a very unique set of risks that Boeing probably shouldn’t have taken,” Calhoun said. “But we are where we are, and we’re going to deliver great airplanes.”
The former president, an aviation enthusiast, took a keen interest in the new presidential jets, involving himself in everything from contract negotiations to the plane’s color scheme. As part of the deal, Boeing signed a fixed-price contract that required the company, not taxpayers, to pay for any cost overruns during the complicated conversion of the two airliners.
So should we be thanking Trump for saving taxpayers money while sticking one of America’s biggest employers and most essential corporations with a giant bill? Does that make up for all the money he wasted on golf trips or take any of the sting out of Jared Kushner’s grotesque $2 billion conflict of interest? Maybe, but given that the company is a key fixture in our military-industrial complex, it’s a safe bet they’ll get that money back one way or another.
And maybe we should be happy that Trump was sticking to his managerial strengths—i.e., picking out colors for things—instead of, say, negotiating an even worse deal with the Taliban. But I have a feeling at least $100 million of the cost Boeing has been forced to eat involves a complex apparatus for hosing the excess McRib sauce off POTUS.
In fact, I’d be a little shocked if Trump’s new plane—which I can only hope he’ll never see up close—looks and feels a bit like the car Homer designed for himself on The Simpsons.
Who really knows?
Fortunately for Boeing, Trump won’t be writing the checks, so he can’t stiff the company entirely. Hey, that’s something, at least.
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