WASHINGTON (AP) — President Donald Trump has reached an informal deal with Boeing to provide the next generation presidential aircraft, the White House says.
Deputy press secretary Hogan Gidley said Tuesday that the president negotiated a $3.9 billion “fixed price contract” for the new planes, known as Air Force One when the president is on board. It follows years of negotiations between Boeing and the U.S. Air Force — and Trump’s personal intervention since his election.
In December 2016, Trump tweeted that costs for the program were “out of control, more than $4 billion,” he added. “Cancel order!”
Boeing chief executive Dennis Muilenburg met multiple times with Trump to discuss the Air Force One contract according to the White House, most recently last week.
Gidley said the agreement would “save the taxpayers more than $1.4 billion.”
Boeing, in a statement, said it is ‘is proud to build the next generation of Air Force One.” The company added: “President Trump negotiated a good deal on behalf of the American people.”
The agreement includes the two 747-800 aircraft, and the cost of modifying the commercial planes with the equipment needed to support the president, including external stair, large galleys, and a secure communications suite.
Yep …
Guess it’s all in your perspective …
Added Boeing, “Yes, it was a very good deal he negotiated. It was an amazing privilege to see a master at work. Please don’t send us to the cornfield.”
The original was 4 billion… the new price is 3.9 billion. Yet th e claim is the savings is More than 1 billion? Is this new math, or alternative math, or just fake news?
Also, paying upfront is not necessarily a savings. It’s more debt sooner. And replacing something before it needs to be replaced isn’t really a savings. The estimate was based on the fact we did not need the planes now. But because trump wants something new and shiny he is paying $$ now for something we don’t need until much later. Boeing is laughing at us!!!
These two planes are “white tails”–planes which have already been built but not delivered to Russian airline Transaero due to their bankruptcy while the planes were being built. (Before you ask, this deal has nothing to do with Russia. Transaero never took possession of the planes.) Boeing owns these planes but there is little to no market for the 747-8 so they have been sitting around in storage.
The list price of a 747-8 is about $350m though most airlines would pay much less, even less so for ones that Boeing can’t sell. Even at full list price, that’s $700m for the planes plus $3.2b for the modifications. I can’t imagine what kind of modifications would cost $1.6b per plane. (Are gold-plated faucets really that expensive?)