Boeing-gate

 

air_force_one_over_mt-_rushmoreDonald Trump tweeted, Boeing stock fell. From Reuters:

U.S. President-elect Donald Trump said on Tuesday costs for a new Air Force One – one of the most prominent symbols of the U.S. presidency – were out of control, and urged the government to cancel a contract with Boeing Co for the jet.

Trump, who takes office on Jan. 20, griped during his unconventional election campaign about the cost of President Barack Obama’s use of the presidential aircraft to campaign for his rival, Hillary Clinton.

It was not immediately clear what prompted his complaint about Boeing and the presidential plane, but his transition team said that he aimed to send a clear message he intends to save taxpayers’ money.

“Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!” Trump said in a morning Twitter message.

It was not clear what his source of information was for the cost. The budgeted costs for the Air Force One replacement program are $2.87 billion for the fiscal years 2015 through 2021, according to budget documents..

…Boeing shares dipped after Trump’s tweet and were down 0.7 percent in morning trading. Shares of several other major defense contractors were also lower.

“We want Boeing to make a lot of money, but not that much money.” Is Trump’s statement different from Obama’s “I do think at a certain point you’ve made enough money,” and, if so, why?

Published in Culture, Economics, Politics
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  1. ctlaw Coolidge
    ctlaw
    @ctlaw

    Jamie Lockett:

    Miffed White Male:

    Doug Watt: Military procurement is more expensive for several reasons. First of all there is no civilian market for M1 tanks, F-22’s, A-10’s or whatever other weapons platform you care to name. Take the F-22 for example, once the Pentagon decided that the F-35 was what they wanted that means starting a new production line with new tools. Next comes the request from the military for modifications, that means more retooling.

    We’re not talking about military procurement here, we’re talking about a (admittedly highly modified) commercial airliner.

    Even more off-topic: As far as modifications to production military planes, read something interesting about airplane production during WWII. The constant modifications to production for heavy bombers was killing throughput on the lines – instead of multiple planes per day, they were getting a few planes per week as they constantly rejiggered.

    Finally they decided to leave primary production alone, then fly the completed planes to a separate facility that retrofitted changes into them.

    Air Force on is more of a military aircraft than a jet liner.

    Except that the asserted efficiency being argued relates to the portions that overlap civilian 747-8

    • #61
  2. Jamie Lockett Inactive
    Jamie Lockett
    @JamieLockett

    ctlaw:

    Jamie Lockett:

    Miffed White Male:

    Doug Watt: Military procurement is more expensive for several reasons. First of all there is no civilian market for M1 tanks, F-22’s, A-10’s or whatever other weapons platform you care to name. Take the F-22 for example, once the Pentagon decided that the F-35 was what they wanted that means starting a new production line with new tools. Next comes the request from the military for modifications, that means more retooling.

    We’re not talking about military procurement here, we’re talking about a (admittedly highly modified) commercial airliner.

    Even more off-topic: As far as modifications to production military planes, read something interesting about airplane production during WWII. The constant modifications to production for heavy bombers was killing throughput on the lines – instead of multiple planes per day, they were getting a few planes per week as they constantly rejiggered.

    Finally they decided to leave primary production alone, then fly the completed planes to a separate facility that retrofitted changes into them.

    Air Force on is more of a military aircraft than a jet liner.

    Except that the asserted efficiency being argued relates to the portions that overlap civilian 747-8

    And?

    • #62
  3. Doctor Robert Member
    Doctor Robert
    @DoctorRobert

    Miffed White Male:

    Doctor Robert:This debate about aircraft lifespans and part numbers and costs of aluminum sheeting is remarkably clueless.

    The issue is not Mr Trump cancelling an order. He has no authority to do so. He is a private citizen for a few more weeks. It is not that he has not studied the matter thoroughly. By 15 minutes after his tweet, his acolytes had the necessary data at hand and arguments were being crafted pro and con.

    The issue is that he is making a public statement to the effect that his comfort is less important than the Taxpayers’ dollars.

    That’s a very, very good statement to be making right now, dontcha think?

    Mr Trump is a master at using the media to create an image. This is just another example of his mastery. Ricochetti are arguing about aircraft mainframes while Reagan Dems are lining up behind Mr Trump.

    Scott Adams, is that you?

    How I wish!

    • #63
  4. Chuck Enfield Inactive
    Chuck Enfield
    @ChuckEnfield

    Jamie Lockett:

    Spin:I agree with Trump. Cancel the order.

    The current airframe is reaching the limits of its service life and is becoming too expensive to maintain. What should we replace it with?

    Amtrack?

    • #64
  5. Miffed White Male Member
    Miffed White Male
    @MiffedWhiteMale

    Jamie Lockett:

    Miffed White Male:

    Doug Watt: Military procurement is more expensive for several reasons. First of all there is no civilian market for M1 tanks, F-22’s, A-10’s or whatever other weapons platform you care to name. Take the F-22 for example, once the Pentagon decided that the F-35 was what they wanted that means starting a new production line with new tools. Next comes the request from the military for modifications, that means more retooling.

    We’re not talking about military procurement here, we’re talking about a (admittedly highly modified) commercial airliner.

    Even more off-topic: As far as modifications to production military planes, read something interesting about airplane production during WWII. The constant modifications to production for heavy bombers was killing throughput on the lines – instead of multiple planes per day, they were getting a few planes per week as they constantly rejiggered.

    Finally they decided to leave primary production alone, then fly the completed planes to a separate facility that retrofitted changes into them.

    Air Force on is more of a military aircraft than a jet liner.

    A 747 is at its base a civilian airframe.

    • #65
  6. Jamie Lockett Inactive
    Jamie Lockett
    @JamieLockett

    Miffed White Male:

    Jamie Lockett:

    Miffed White Male:

    Doug Watt: Military procurement is more expensive for several reasons. First of all there is no civilian market for M1 tanks, F-22’s, A-10’s or whatever other weapons platform you care to name. Take the F-22 for example, once the Pentagon decided that the F-35 was what they wanted that means starting a new production line with new tools. Next comes the request from the military for modifications, that means more retooling.

    We’re not talking about military procurement here, we’re talking about a (admittedly highly modified) commercial airliner.

    Even more off-topic: As far as modifications to production military planes, read something interesting about airplane production during WWII. The constant modifications to production for heavy bombers was killing throughput on the lines – instead of multiple planes per day, they were getting a few planes per week as they constantly rejiggered.

    Finally they decided to leave primary production alone, then fly the completed planes to a separate facility that retrofitted changes into them.

    Air Force on is more of a military aircraft than a jet liner.

    A 747 is at its base a civilian airframe.

    So?

    • #66
  7. TKC1101 Inactive
    TKC1101
    @TKC1101

    If anyone listened to Rush today, he had some very interesting theories.

    Boeing was a very big Obama donor and a major donor to the Clinton Foundation and Slush Fund.

    Boeing was very tied into the Iran Agreement as they are doing a deal to replace the Iranian airlines aircraft.

    Boeing moved their HQ to Chicago very soon after Obama was elected.

    Boeing bet the wrong way.

    the big 747 is not selling well and this order seems to be a nice sweetheart deal. View it as a payoff on the Headquarters move.

    Trump has enough friends to know the inside of these machinations.

    Boeing just got an opening salvo.

    And the media and some here are wondering “Does He know there are two planes in the deal?”

    God that is funny. Keep thinking he is stupid.

     

    • #67
  8. Larry Koler Inactive
    Larry Koler
    @LarryKoler

    TKC1101: Boeing moved their HQ to Chicago very soon after Obama was elected.

    2001.

    • #68
  9. Larry Koler Inactive
    Larry Koler
    @LarryKoler

    TKC1101: God that is funny. Keep thinking he is stupid.

    It worked for Reagan — the media is so easily manipulated by some pols.

    • #69
  10. HeartofAmerica Inactive
    HeartofAmerica
    @HeartofAmerica

    I don’t get the hand-wringing. Here’s a guy about to basically take over as CEO of the USA. Big job. Lots of unhappy stockholders. He gets news regarding the huge cost of a major purchase/project and he has an issue with it. As a stockholder, so do I.  I’m pleased that someone is going to watch the pennies this company spends for once and as a stockholder this is why I voted to hire this guy.

    For far too long, we have given these defense contractors pretty much carte blanche when it comes to the cost of goods and services. Who hasn’t heard of the $500 screwdriver or $1000 toilet? Our government isn’t exactly known as shrewd negotiators.  Billions of dollars are wasted. As a former buyer, it’s time someone took a look at the contracts. Just because it’s a contract doesn’t mean it can’t be reviewed and renegotiated to better terms.

    Everyone is making such a big deal about him working on keeping company’s and jobs here and how he can’t keep getting in the weeds over “these things.” Frankly, I find it refreshing. He’s engaged and he’s looking for solutions. I saw the video of Obama being asked about those Carrier jobs and unless his comments were taken out of context or that video was sliced/diced, his comments were exactly what I would expect him to say and do: nothing.

    • #70
  11. Jamie Lockett Inactive
    Jamie Lockett
    @JamieLockett

    Larry Koler:

    TKC1101: Boeing moved their HQ to Chicago very soon after Obama was elected.

    2001.

    My god, they invented Time Travel too? Hell $4 billion is probably not enough for the next Air Force One.

    • #71
  12. Jamie Lockett Inactive
    Jamie Lockett
    @JamieLockett

    TKC1101:If anyone listened to Rush today, he had some very interesting theories.

    Boeing was a very big Obama donor and a major donor to the Clinton Foundation and Slush Fund.

    Boeing was very tied into the Iran Agreement as they are doing a deal to replace the Iranian airlines aircraft.

    Boeing moved their HQ to Chicago very soon after Obama was elected.

    Boeing bet the wrong way.

    the big 747 is not selling well and this order seems to be a nice sweetheart deal. View it as a payoff on the Headquarters move.

    Trump has enough friends to know the inside of these machinations.

    Boeing just got an opening salvo.

    And the media and some here are wondering “Does He know there are two planes in the deal?”

    God that is funny. Keep thinking he is stupid.

    So in the last election cycle Boeing’s donation from PACs they control went overwhelmingly to Republicans:

    https://www.opensecrets.org/orgs/summary.php?id=d000000100

    Individual donations from employees skewed the other way. I don’t think you can draw any inference about their corporate preference for either party.

    If you click over to the Totals tab you’ll see that Boeing has traditionally favored Republicans. The data doesn’t seem to tell the story you think it does.

    • #72
  13. Larry Koler Inactive
    Larry Koler
    @LarryKoler

    Jamie Lockett:

    Larry Koler:

    TKC1101: Boeing moved their HQ to Chicago very soon after Obama was elected.

    2001.

    My god, they invented Time Travel too? Hell $4 billion is probably not enough for the next Air Force One.

    Time travel and anti-gravity, too!

    • #73
  14. TKC1101 Inactive
    TKC1101
    @TKC1101

    Larry Koler:

    TKC1101: Boeing moved their HQ to Chicago very soon after Obama was elected.

    2001.

    Rush stands corrected

    • #74
  15. TKC1101 Inactive
    TKC1101
    @TKC1101

    Jamie Lockett: My god, they invented Time Travel too? Hell $4 billion is probably not enough for the next Air Force One.

    Rush stands corrected.

    • #75
  16. TKC1101 Inactive
    TKC1101
    @TKC1101

    Jamie Lockett:Individual donations from employees skewed the other way. I don’t think you can draw any inference about their corporate preference for either party.

    If you click over to the Totals tab you’ll see that Boeing has traditionally favored Republicans. The data doesn’t seem to tell the story you think it does.

    Employee contributions are not part of the mix. Clinton Foundation , plus helping influence the GOP lay down on the Iran deal stinks.

     

    • #76
  17. Douglas Inactive
    Douglas
    @Douglas

    ctlaw: “What drives the price tag isn’t the cost of the plane, it’s all the costly modifications and equipment that must be installed on such a unique aircraft,” said Loren B. Thompson, a senior aviation analyst and industry consultant with the Virginia-based Lexington Institute.

    Take anything Thompson says with a heavy, heavy grain of salt. He’s basically the biggest PR flack for military contractors in the country, and is Lockheed’s go-to guy when they need someone to spin doctor bad news about the F-35. Look up “the Lexington Institute”. It’s a few guys in an Arlington  office. All income comes from “defense industry consulting”.

    • #77
  18. Douglas Inactive
    Douglas
    @Douglas

    Jamie Lockett:

    Douglas:

    The King Prawn:He knows there’s more than one plane, right?

    There’s two, and 2 billion a pop is still outrageous, even for Air Force One. Even all of the C3 and crypto gear on board doesn’t justify 2 billion dollars apiece for a customized 747.

    How do you know that? Have you done a breakdown of the RFP and all of the equipment and capabilities of this new aircraft?

    For $4 billions dollars, they’d better have %$#&*! warp drive.

     

    • #78
  19. Walker Member
    Walker
    @Walker

    There is a curious relationship between Trump’s tweet about Boeing’s over-charging and the latest news of DOD overspending that the Pentagon tried to hush up. The Pentagon’s contractors have long received favored treatment, in part because the big contractors e.g. Boeing, Lockheed and McDonnell Douglas hire retired generals to get new business, and then ace out smaller firms that can get the job done for less. Hope Trump does something to change this. It’s going to be difficult tho judging by the huge defense spending overruns we’ve seen over the years.

    • #79
  20. Franco Member
    Franco
    @Franco

    This qualifies as a scandal worthy of the -Gate suffix?

    Wow…

    Get a grip @Ricochet Editors!

    • #80
  21. cdor Member
    cdor
    @cdor

    anonymous:

    Jamie Lockett: The current airframe is reaching the limits of its service life and is becoming too expensive to maintain. What should we replace it with?

    He’s an employee, not a god-emperor. Put him on a C-130. Four engines, short field capability, equipped for in-flight refueling, already in the Air Force inventory with pilots trained to fly it, and compatible with military communications gear.

    And as long as it had a bathroom, bed, and was tall enough for him to stand and walk  around, I’ll bet he would be fine with it. Oh…it also must have wifi.

    • #81
  22. John Hanson Thatcher
    John Hanson
    @JohnHanson

    Of course, one issue not mentioned here is that the planes are not scheduled into service until 2024, so even assuming Trump is reelected, he likely will never get to ride in the new aircraft, because a one year slip in the entry into service is likely for a program that is just getting started.  It may or may not be worth it, we don’t know and likely can’t know, and Trump likely doesn’t know enough yet, but symbolically is says he is watching the hen-house, and that is better than we have had.

    Another question is why it should take 10 years at least to build two aircraft, even assuming they are presidential ones.  Are we pushing the state-of-the-art too far for the next generation, and should use more of what is already developed?   One can have many long discussions on that point.

    • #82
  23. cdor Member
    cdor
    @cdor

    anonymous:

    John Hanson: Another question is why it should take 10 years at least to build two aircraft, even assuming they are presidential ones.

    Boeing 747 development was launched in April 1966 with an order of 25 aircraft by Pan Am. First flight was in February 1969, and the first 747 entered service with Pan Am in January 1970. That’s about three and a half years from launch to revenue service for an entirely new airframe and engine, including building a new production plant in Everett, Washington.

    Today it takes ten years to modify two aircraft of a type already in service, replacing similar aircraft already in operation, which, when delivered in 1986, cost around US$ 325 million each (717 million today).

    Having absolutely no reason to doubt anonymous ‘s facts, if one adds another $1B for high tech upgrades and the USA can still purchase two new AF1’s for $21/2B. This is what we elected…a guy who, from vast experience, has a sense of the value of things–and doesn’t like getting ripped off. It is exactly a businessman’s approach. He has not much history in politics. But he is well known for building large projects on time and under budget. He knows that in many cases all it takes in his new position as POTUS is to just say something in a quip or a tweet and , like dropping a stone in the pond, waves start emanating.

    • #83
  24. ctlaw Coolidge
    ctlaw
    @ctlaw

    anonymous:

    John Hanson: Another question is why it should take 10 years at least to build two aircraft, even assuming they are presidential ones.

    Boeing 747 development was launched in April 1966 with an order of 25 aircraft by Pan Am. First flight was in February 1969, and the first 747 entered service with Pan Am in January 1970. That’s about three and a half years from launch to revenue service for an entirely new airframe and engine, including building a new production plant in Everett, Washington.

    Today it takes ten years to modify two aircraft of a type already in service, replacing similar aircraft already in operation, which, when delivered in 1986, cost around US$ 325 million each (717 million today).

    This very much parallels the difference between the F-35 and fighter aircraft 50 years ago.

    Probably the biggest factors are writing/debugging/integrating the software and creating the special-purpose electronics. It was not hard to create flyable prototypes of the YF-32 and YF-35 decades ago. Transitioning YF-35 to combat-ready F-35 has been drawn out.

    In the old days, there were often only about a year of mechanical tweaks between flyable prototype and what saw first combat. Electronics and software changed that.

    Then you have the diminishing returns on improvements. As technology improves, it takes a lot more effort to make incremental improvements.

     

    • #84
  25. Miffed White Male Member
    Miffed White Male
    @MiffedWhiteMale

    anonymous:

    John Hanson: Another question is why it should take 10 years at least to build two aircraft, even assuming they are presidential ones.

    Boeing 747 development was launched in April 1966 with an order of 25 aircraft by Pan Am. First flight was in February 1969, and the first 747 entered service with Pan Am in January 1970. That’s about three and a half years from launch to revenue service for an entirely new airframe and engine, including building a new production plant in Everett, Washington.

    Today it takes ten years to modify two aircraft of a type already in service, replacing similar aircraft already in operation, which, when delivered in 1986, cost around US$ 325 million each (717 million today).

    I wish I could find the cite, but there was an article just the other day talking about the great success of infrastructure work, because a new runway for the (Seattle?) airport only took 4 years to build AFTER all the permittting was completed.

    • #85
  26. Larry Koler Inactive
    Larry Koler
    @LarryKoler

    I’ve been in a lot of the meetings at Boeing and I’m always amazed at how long it takes to get decisions made internally. There aren’t cowboys in the company anymore. The worst program is the “47” meetings. The “37” program still has innovative and powerful people in it. Things really move much quicker with them.

    I just can’t imagine how much worse it is for something that gets as much attention as Air Force One AND combined with risk averse government executives.

    10 years seems about right.

    • #86
  27. ctlaw Coolidge
    ctlaw
    @ctlaw

    Larry Koler:I’ve been in a lot of the meetings at Boeing and I’m always amazed at how long it takes to get decisions made internally. There aren’t cowboys in the company anymore. The worst program is the “47” meetings. The “37” program still has innovative and powerful people in it. Things really move much quicker with them.

    I just can’t imagine how much worse it is for something that gets as much attention as Air Force One AND combined with risk averse government executives.

    10 years seems about right.

    That reminded me of a point anonymous omitted. In the 1960s, the Boeing A-Team was working on the 2707 SST. The B-Team got the 747 done in the amazing way John mentioned.

    Upcoming Smithsonian documentary.

     

    • #87
  28. Jamie Lockett Inactive
    Jamie Lockett
    @JamieLockett

    ctlaw:

    Larry Koler:I’ve been in a lot of the meetings at Boeing and I’m always amazed at how long it takes to get decisions made internally. There aren’t cowboys in the company anymore. The worst program is the “47” meetings. The “37” program still has innovative and powerful people in it. Things really move much quicker with them.

    I just can’t imagine how much worse it is for something that gets as much attention as Air Force One AND combined with risk averse government executives.

    10 years seems about right.

    That remind me of a point anonymous omitted. In the 1960s, the Boeing A-Team was working on the 2707 SST. The B-Team got the 747 done in the amazing way John mentioned.

    Upcoming Smithsonian documentary.

    One of my favorite historical anecdotes is that the P51 Mustang was designed and built in 117 days.

    • #88
  29. Chuck Enfield Inactive
    Chuck Enfield
    @ChuckEnfield

    Jamie Lockett: One of my favorite historical anecdotes is that the P51 Mustang was designed and built in 117 days.

    I like to think American’s could do something like that again if we really needed to, but I’ve been known to lie to myself.

    • #89
  30. Larry Koler Inactive
    Larry Koler
    @LarryKoler

    The level of complexity nowadays is enormous. It’s hard to know what’s really possible because it’s so long since the whole country was on-board in the way we were during WW2.

    I work in R&D and it is better but whenever we are plugged into and waiting on one of the bigger programs things slow down to the speed of the most cautious person in the room.

    But still Boeing is one of the most incredible companies in the world. I do appreciate the history and the scope of the company.

    • #90
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