Boeing CEO Says He Shouldn't Have Taken On New Air Force One

The Boeing CEO regretted having accepted from former President Donald Trump for the construction of a new Air Force One, as the main US presidential plane is popularly called.

Presenting Q1 2022 results, the aircraft maker reported $1,3 billion in cost overrun charges across some of its key defense programs. According to Defense News, a large part of those charges came from the development of the new VC-25B - as the presidential jet is designated in the US Air Force - and the Air Force's T-7A Red Hawk trainer, the company said on Wednesday ( 27).

And on a conference call, Boeing chief executive Dave Calhoun suggested that the company should not have accepted the Trump istration's 2018 on the new Air Force One, as the old istration has engaged in strong negotiations to reduce costs. new aircraft costs and other programs. 

Boeing's defense, space and security division saw its first-quarter 2022 sales drop to $5,5 billion, down 24% from the same period last year. 

This decline was largely due to lower volumes and their charges on fixed-price development programs. Calhoun said in an interview with MSNBC this morning that Boeing reported a "more confusing quarter than any of us would like".

The VC-25B program had the biggest impact of this amount, totaling $660 million. This stemmed from schedule delays, rising supply costs, and higher costs to finalize technical requirements. 

The aircraft was originally supposed to be delivered in 2024, but the Wall Street Journal reported earlier this month that it could be at least two years late.

Another $367 million in charges came from the T-7, the Air Force's new jet trainer aircraft. Supply chain restrictions, complications from the COVID-19 pandemic and rising inflation have complicated ongoing negotiations with suppliers, Boeing said.

Calhoun said Boeing still has a lot of confidence in the T-7's future and said other programs have withstood similar pressure. He added that he expects the MQ-25 Stingray program, a Navy aerial refueling drone, to also be another good bet for the company. 

Despite both programs having higher-than-anticipated development costs, Calhoun said, the military will be flying both for a long time.

Still, the CEO lamented the path Boeing took on the new Air Force One during the Trump istration. In December 2016, the then-president tweeted that "costs are out of control" for the $4 billion-plus price of the new Air Force One and that he wanted to cancel the order.

In July 2018, the Air Force awarded Boeing a $3,9 billion contract for two new Air Force Ones. The White House said this represented a drastic price drop from the original bid for the contract, valued at $5,3 billion.

According to the CEO, this contract represented "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 are going to deliver great planes.”

He said that COVID-related inefficiencies were largely responsible for the cost overruns suffered and that they were particularly severe for the Air Force One program.

“In the defense world, when a COVID line goes down, or a group of workers leaves, we don't have a bunch of people cleared to step into their shoes,” Calhoun said. “It's always been a tougher implication, and for the VC-25B, where the clearances are ultra high, it's really tough. So we ended up getting hit in a lot of different areas.”

In April of last year, Boeing informed that it would file a lawsuit against GDC Technics, a Texas company contracted by the Seattle giant to carry out design and construction work on the interior of the VC-25Bs. According to Boeing, GDC would be a year behind schedule. 

According to the portal aerotime hub, GDC filed a lawsuit back against Boeing, claiming it was "Boeing's mismanagement in completing two Air Force One presidential aircraft, not the delays caused by GDC, which caused a delay in completing these aircraft."