The Boeing chief executive Dennis Muilenburg said he “made some great progress” after being summoned by the US president-elect for face-to-face talks at Trump Tower in New York over what Mr Trump sees as excessive costs of the next-generation version of the Air Force One jumbo jet presidential aircraft.
In addition to Boeing’s contract to build the new Air Force One, they talked about the company’s F-18 Super Hornet, which Mr Trump suggested last month should be upgraded to compete with Lockheed Martin’s F-35 as the Pentagon’s advanced fighter jet.
“We discussed Air Force One, we discussed fighter aircraft,” Mr Muilenburg said after the meeting. “We made some great progress on simplifying requirements for Air Force One, streamlining the process, streamlining certification.
“I think Mr Trump is doing a great job of engaging with business,” Mr Muilenburg said. “We’re on the same page here.”
Although Boeing has announced plans to pare its workforce amid slowing commercial aircraft sales, Mr Muilenburg touted the economic growth and the 1.5 million manufacturing jobs that the largest US exporter supports.
“You want manufacturing jobs – aerospace is the place to invest,” he said. “We’re proud to take on that mission.”
Mr Trump’s public pressure on Boeing began on December 6, when he tweeted that “Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than US$4 billion. Cancel order!”
Mr Muilenburg vowed that the Chicago-based company could build a new version of Air Force One for less than $4bn. “We’re going to get it done for less than that, and we’re committed to working together to make sure that happens,” he said, adding he gave Mr Trump his “personal commitment on behalf of the Boeing Company”.
Boeing is not the only defence contractor who has felt the fury of Mr Trump’s tweets. The Lockheed chief executive Marillyn Hewson has met twice with him after he attacked the company for “out of control costs” on the F-35 jet, the largest US weapons programme. The $379bn programme for over 3,000 fighters started development in 2001 after Lockheed beat Boeing in the winner-take-all contest. The 200th aircraft was delivered last week.
Trump also called on Boeing to “price-out a comparable F-18 Super Hornet,” referring to the company’s F/A-18E/F jet, to compete with the F-35, a proposal defence analysts said was probably unworkable given the different roles and capabilities of the two fighters.
After the president-elect’s criticism, Ms Hewson told Trump last week that Lockheed is close to a deal with the Pentagon to lower costs “significantly” on the next and largest production lot yet of F-35s.
The push to reduce F-35 costs over time was underscored by Roger Carr, the chairman of BAE Systems Plc, a key subcontractor on the programme.
“Over a period there’s no question we’ve been told through Lockheed that the president has an ambition to reduce the cost of that aircraft by a material amount of money, many percent, into double digits over a period,” Mr Carr said on Tuesday. “We respect that and we’ll work towards a contribution towards that.”
At the time of Mr Trump’s tweet about Air Force One, it was not immediately clear where his estimate of $4bn originated. The Pentagon’s top weapons buyer said the president-elect may be taking total acquisition costs and assuming that they are already built into the Boeing contract.
On Air Force One and the F-35, “he’s heard these big numbers”, said Frank Kendall. “Those are often programme costs, or maybe acquisition total costs. They’re not contract values, necessarily.”
“The basic aircraft is a small fraction of that $4bn – the 747s we’re buying – so Boeing has part of that cost but not all of that, by any means,” Mr Kendall said. “We’re still negotiating with Boeing on that.”
Mr Kendall praised the incoming president, who takes office on Friday, for his focus on reducing taxpayer expenses on large weapons contracts.
““His general interest in reducing costs is terrific – his focus on that is good, but I think there are a lot of details I think he needs to absorb before he can talk about specifics.”
* Bloomberg
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