Donald Trump’s Air Force One Deal Caused Boeing to Lose Over $2 Billion, CEO Implies Deal Was a 'Mistake'

Former President Donald Trump's contract may have caused Boeing to lose over $2 billion, latest reports reveal. Boeing lost an additional $482 million while manufacturing the two aircraft that will replace Air Force One, according to its most recent financial report. The company blamed labor unrest, supplier issues, engineering modifications, and higher-than-expected manufacturing expenses for the losses, Business Insider reported.

Boeing was contracted to replace the two 747-200B jumbo jets that are used to carry US Presidents on international trips. The US Air Force is also expected to save around $1.9 billion in operations and maintenance expenditures thanks to the larger and more fuel-efficient new aircraft, known as VC-25Bs, replacing the previous planes. However, since work started in 2018, Boeing has lost more than $2 billion due to continuous problems, and the corporation has now pushed back the delivery date of the two jets to 2026 by an additional two years, CNN reported.

As it just so happens to turn out, during his time in the White House, Trump directly participated in the talks with Boeing and threatened to terminate the contract if he didn't get his way, as per the same Business Insider report. Ultimately, his administration agreed to a fixed-price contract with Boeing, and the caveat was that the corporation would be accountable for any cost overruns.

Normally, higher costs on defense contracts are passed on to US taxpayers. However, Boeing agreed to a fixed-price contract for the two new jets because, apparently, it was under pressure from then-President Trump, who threatened to cancel the plane contract.

Last year, Dave Calhoun, the CEO of Boeing, admitted that signing the contract was a 'mistake.' "Air Force One, I'm just going to call a very unique moment, a very unique negotiation, a very unique set of risks that Boeing probably shouldn't have taken, but we are where we are," he said on an earnings call.

In contrast, Calhoun's tone was more upbeat during the most recent call. Defense News was informed by Calhoun that the Defense, Space, and Security branch of Boeing was recovering 'slower than I'd like.' However, he stated that "we're confident in the future, and our path to normalizing BDS margin performance by that '25 and '26 time frame is intact." With the delivery of 105 commercial aircraft, revenue increased by 13% to $18.1 billion, and the net loss decreased from $3.3 billion to $1.6 billion. Over 5,100 commercial aircraft are included in the $469 billion order backlog.

On Wednesday, Beoind disclosed a $1.1 billion, or $3.26 per share, core operating loss. Even while it's 65% less than the loss recorded in the same quarter last year, the loss is still more than the $2.96 per share loss predicted by Refinitiv's panel of experts. Calhoun's optimism suggests that even though Trump may share some of the blame, the jets could be ready by 2026!