Post by kiwithrottlejockey on Dec 7, 2016 13:21:45 GMT 12
from The Washington Post....
Citing high cost, Trump says Boeing's contract
to build Air Force One should be canceled
The president-elect tweeted that the cost of the project — a $4 billion
contract for two planes to serve as Air Force One — is “out of control.”
The company's 747-8 is the only plane made in the U.S. that could
meet the requirements for the presidential aircraft.
By CHRISTIAN DAVENPORT | 10:22AM EST - Tuesday, December 06, 2016
Air Force One. — Photograph: Reuters.
PRESIDENT-ELECT Donald Trump on Tuesday took aim at one of the pre-eminent symbols of presidential power, saying on Twitter that the amount the Pentagon plans to spend on a new Air Force One is far too much and the contract with Boeing should be killed.
“Cancel the order!” he tweeted.
Speaking to reporters later in the lobby of New York's Trump Tower, he said the effort to build the plane “is totally out of control. It's going to be over $4 billion for the Air Force One program, and I think that's ridiculous. I think Boeing is doing a little bit of a number. We want Boeing to make a lot of money, but not that much money.”
The tweet and comments are further evidence that as president, Trump intends to use the power of the office to intervene in individual programs, policy decisions and the actions of companies. And it comes just a week after he pushed Carrier to give up plans to shift Indiana jobs to Mexico. Boeing, by contrast, would build Air Force One in the United States, and canceling the program could cost American jobs.
During his campaign, Trump has repeatedly said he wants to strengthen the nation's military by expanding the size of the Army and the Marine Corps and buy new equipment, from Navy ships to upgrading the nuclear arsenal — promises that Mackenzie Eaglen, a defense analyst at the American Enterprise Institute calculated could cost at least an additional $55 billion.
But Trump has also pledged to eliminate wasteful spending, and clamp down on costly programs that have gone over budget or lag behind schedule. His tweet comes as the Pentagon is facing scrutiny after The Washington Post reported that the Pentagon buried an internal study that found $125 billion in bureaucratic waste for fear that Congress would slash its budget.
In a call with reporters, Trump spokesman Jason Miller said Trump plans to closely examine the Pentagon's budget and look for areas where he can find savings.
“I think this really speaks to the president-elect's focus on keeping costs down across the board with regard to government spending,” he 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.”
The Air Force hasn't released a total dollar amount for the program yet. The program includes two aircraft and is still in the development stages. So far the Air Force has budgeted $2.7 billion for the program. But that's for research, development and testing — not manufacturing. And the Air Force expects “this number to change as the program matures with the completion of risk reduction activities,” the Air Force said in a statement.
The real cost could grow to $4 billion, according to an analysis by 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.
That price tag was justified because of the enormous capabilities of the planes, he said. The plane, which flies under the call sign “Air Force One” when the president is on board, is a “flying command post,” Harrison said. “In the event of a nuclear attack, this is where the military will keep the president safe.”
Richard Aboulafia, an aerospace analyst with the Teal Group, said the “capabilities of this plane were there for everyone to see on 9/11” when Bush was whisked aboard Air Force One and responded to the crisis from there.
In a statement, Boeing said it is only under contract for $170 million for work “to help determine the capabilities of this complex military aircraft that serves the unique requirements of the President of the United States. We look forward to working with the U.S. Air Force on subsequent phases of the program allowing us to deliver the best plane for the president at the best value for the American taxpayer.”
The company wouldn't be eligible for the more lucrative manufacturing contracts until after the development is completed.
When the Air Force selected Boeing, it was the only U.S. manufacturer that could build such an aircraft. The other would be European-based Airbus.
“We don't know what it will ultimately cost, but if President-elect Trump is suggesting we give this work to Airbus, that's not good for American jobs,” said Senator Dick Durbin, a Democrat from Illinois, where Boeing is based.
While it is Congress that controls the nation's purse, Trump could have enormous influence over the Air Force One program. He could pick an Air Force Secretary who, like him, wants to rein in costs, or go in an entirely different direction.
That's what Obama did shortly after taking office in 2009. At the time, Senator John McCain (Republican-Arizona) took aim at the fleet of presidential helicopters, saying, “I don't think that there's any more graphic demonstration of how good ideas have cost taxpayers an enormous amount of money.”
Obama, then just a few weeks in office, said the fleet, generally known as Marine One, was “an example of the procurement process gone amok.” That led defense officials to kill the program outright and then restart the procurement process.
But by then, the helicopter program was well underway and did have significant problems. The Air Force One program is at a much different stage.
“It's still very, very early,” Harrison said. “It hasn't had a chance to have any cost overruns yet.”
He said it was curious that Trump would single out Air Force One when there are so many other defense programs that have gone wildly over budget and behind schedule.
Air Force One with President Barack Obama aboard departs on a rainy day, on December 6th at Andrews Air Force Base, Maryland,
en route to MacDill Air Force Base in Tampa, Florida. — Photograph: Jose Luis Magana/Associated Press.
This isn't the first time Trump has highlighted the costs of Air Force One. In July, he objected to the use of the plane for campaign events: “Taxpayers are paying a fortune for the use of Air Force One on the campaign trail by President Obama and Crooked Hillary,” he tweeted. “A total disgrace!”
He brought it up again at a rally in North Carolina in July. “Now Air Force One is a very old Boeing 747,” Trump said. “It sucks up a lot of gas. A lot of fuel. Boy, the fuel bill. You turn on those engines, I can tell you, it's a lot of money.”
Boeing could be in a difficult negotiating position. In addition to his concerns about the plane's costs, Trump has vowed to rewrite trade agreements with China, which could have a huge affect on the company.
During a recent talk, Dennis A. Muilenburg, Boeing's chief executive, said a third of the 737s it built for customers across the globe went to China, according to the Chicago Tribune.
“I'm not a political pundit or prognosticator — we have too many of those — but anyone who paid attention to the recent campaigns and the election results realizes that one of the overarching themes was apprehension about free and fair trade,” he said, according to the paper.
Boeing faces other landmines. It also recently reached an agreement to sell commercial passenger planes to Iran in a multibillion deal that would be one of the biggest sales to Iran since the easing of sanctions last year, an action Trump has criticized.
An Air Force official, not authorized to speak publicly about the Air Force One program, said that the current presidential plane will be 30 years old next year, and the new ones aren't slated to come online until the mid-2020s. By then the technology aboard the current plane will be dated and it will become increasingly hard to maintain. Any delays to replace it could cause significant problems, the official said.
Boeing was selected as the manufacturer in January 2015, but it wasn't much of a competition. Boeing's 747-8 was the only plane made in the United States that could meet the requirements for the presidential aircraft while also being “consistent with the national public interest,” Air Force Secretary Deborah Lee James said in a statement at the time.
She said the Pentagon “will insist upon program affordability through cost-conscious procurement practices.”
• Jenna Johnson contributed to this report.
• Christian Davenport covers the defense and space industries for The Washington Post's Financial desk. He joined The Post in 2000 and has served as an editor on the Metro desk and as a reporter covering military affairs. He is the author of “As You Were: To War and Back with the Black Hawk Battalion of the Virginia National Guard”.
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Related stories:
• VIDEO: Trump accuses Boeing of ‘doing a little bit of a number’ with new Air Force One
• Did Donald Trump tank Boeing's stock because he was mad about a news article?
• Fact Checker: The inaccuracies in Donald Trump's Air Force One tweet
• As Trump vows to stop flow of jobs overseas, U.S. plans to make fighter jets in India
• Pentagon hid study exposing $125 billion in wasteful spending
• Boeing chosen to build the next Air Force One
www.washingtonpost.com/news/checkpoint/wp/2016/12/06/citing-cost-overruns-trump-says-boeings-contract-to-build-air-force-one-should-be-canceled
