The comments sent a shiver through the defense and aerospace industries, whose stock prices had soared after Trump’s election. Trump had pledged that he would rebuild the nation’s military and better equip troops with more ships, jets and weapons. But the tweet and the comments were signals that the companies that might benefit from that spending could just as easily be targets under the new administration.
The Washington Post had also just reported that the Pentagon had buried an internal study that found $125 billion in bureaucratic waste for fear that Congress would slash its budget. Trump spokesman Jason Miller said Tuesday that Trump plans to scrutinize the way the Pentagon spends money.
“I think this really speaks to the president-elect’s focus on keeping costs down across the board with regard to government spending,” Miller said. “I think people are really frustrated with some of the big price tags that are coming out for programs, even in addition to this one. So we’re going to look for areas where we can keep costs down and look for ways where we can save money.”
During their conversation, Muilenburg assured Trump that the company would work with the Pentagon on any requirement changes to the program in an effort to keep costs down, according to Boeing spokesman Gordon Johndroe.
“Muilenburg congratulated Mr. Trump on his election win and committed to working with the new administration to control costs as they establish requirements for the new Air Force One to keep the program as affordable as possible and deliver the best value to American taxpayers,” Johndroe said. ” They also discussed the overall importance of American manufacturing and Boeing’s continuing strong contribution and commitment to U.S.jobs.”
Trump himself confirmed the conversation during a Wednesday interview on NBC’s “Today” show. He called Muilenburg “a good man” and “a terrific guy” and said “we’re going to work it out.” Of the deal, Trump said: “We’re going to get the prices down, and if we don’t get the prices down, we’re not going to order them. We’re going to stay with what we have.”
So far, the Air Force has budgeted $2.7 billion for the Air Force One program, which includes two aircraft and is still in the development stages. That money is for research, development and testing — not manufacturing. Over the next few years, the Air Force expects “this number to change as the program matures with the completion of risk reduction activities,” it said in a statement.
Boeing said in a statement that it is under contract for only $170 million for work “to help determine the capabilities of this complex military aircraft.”
The real cost could grow to $4 billion, according to Todd Harrison, a defense analyst with the Center for Strategic and International Studies. The aircraft are projected to be operational by the mid-2020s, officials said.
The planes, which go by the call sign “Air Force One” when the president is on board, cost so much because they can do so much, defense analysts said. They are able to safeguard the president in a crisis — even a nuclear attack — allowing him to direct the military from the air, speak with Cabinet members and communicate with the nation. The plane can be refueled while in flight so that it can stay aloft for extended periods. It also has extensive radar and counterattack measures, officials said.
Much of its capabilities are classified. It is a “flying command post,” Harrison said. “In the event of a nuclear attack, this is where the military will keep the president safe.”
The “capabilities of this plane were there for everyone to see on 9/11” when President George W. Bush was whisked aboard Air Force One and responded to the crisis from there, said Richard Aboulafia, an aerospace analyst with the Teal Group.
In their call, Muilenburg and Trump also discussed trade and China, according to an official not authorized to speak publicly about the matter. Boeing sells a large percentage of its jets to foreign countries, including China. If Trump instituted a tariff on China, that country could retaliate by limiting the number of Boeing jets it buys, Aboulafia has said.