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Boeing regrets the Air Force One contract it signed with Trump

2022-04-27T23:40:40.371Z


The manufacture of two 747 modified for the president of the United States is generating multimillion-dollar losses for the company


Air Force One, photographed on Joseph Biden's recent visit to Poland.Patryk Ogorzalek/AGENCJA WYBORCZ (Agencja Wyborcza.pl via REUTERS)

Air Force One is the plane in which the President of the United States travels.

It is equipped with all kinds of technological and security advances.

Boeing has been the supplier of the presidential plane since 1962, in the days of John F. Kennedy, and this is supposed to give it image and prestige.

However, the latest contract signed by Boeing with President Donald Trump to supply two new 747-8s to perform the functions of Air Force One has become a nightmare for the company, which is suffering millionaire losses with that contract and regrets it. having signed it.

The company reported yesterday to the United States Securities and Exchange Commission (the SEC, for its acronym in English), that the accumulated losses in this agreement of 4,300 million dollars (about 4,100 million euros) increased by 660 million dollars in the first quarter of this year, reaching a total of 1,146 million.

And things can get worse: "The risk remains that we will have to record additional losses in future periods," says the company in its communication to the SEC, which blames these losses on higher supplier costs and completing certain technical requirements and delays. in the execution of the program.

The CEO of the company, Dave Calhoum, confessed this Wednesday in a conference with analysts to present the results of the first quarter that signing that contract was a mistake.

“Air Force One is a unique moment, a unique negotiation, a unique set of risks that Boeing probably shouldn't have taken,” he noted.

“But we are where we are and we are going to deliver great planes,” he added, according to the full transcript of the analyst conference collected by Bloomberg.

The 660 million dollars of losses generated in the quarter by that contract contributed to Boeing having some red numbers of 1,242 million dollars, more than double that in the same period of the previous year.

Revenue fell 8% to $13.991 million.

It also weighed a charge of 367 million in the T-7A Red Hawk military aircraft program for cost overruns derived from inflationary pressures, the jam in the supply chain and covid.

Added to that was another charge of 212 million that the company attributes to the war in Ukraine.

Boeing shares have plummeted 7.5% this Wednesday on the stock market after publishing the results.

The shares closed the session on Wall Street at $154.46, their lowest level since November 2020.

A Trump deal

The current presidential planes have a presidential suite, rooms for his companions, a conference room, advanced security, medical and communications equipment that allow the president to carry out his functions from the air while traveling or in case of need.

The Air Force One contract was signed in February 2018 by Trump and by the company's then CEO, Dennis Muilenberg, and includes the delivery of two new 747-8 aircraft adapted to the needs of the Presidency.

Boeing is proud to build the next generation of Air Force One, providing American Presidents with a flying White House at outstanding value to taxpayers.

President Trump negotiated a good deal on behalf of the American people.

pic.twitter.com/m0HtGfXVlv

— The Boeing Company (@Boeing) February 27, 2018

Trump threatened to cancel the order, made before assuming the Presidency, and finally obtained a reduction.

When the new agreement was signed, Boeing tweeted from its official account: “Boeing is proud to build the next generation of Air Force One, providing American Presidents with a flying White House at an exceptional price for taxpayers.

President Trump has brokered a good deal on behalf of the American people.”

The one that did not negotiate such a good deal was Boeing.

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Source: elparis

All business articles on 2022-04-27

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