By Shen Lu
Boeing Co. will reduce the costs of an Air Force One upgrade, the company’s CEO Dennis Muilenburg said after a Tuesday meeting with President-elect Donald Trump in New York.
The meeting was held at Trump’s request after he pressured the Chicago-based aerospace and defense company last month to lower prices on the new version of Air Force One, the presidential jumbo jet.
“We discussed Air Force One, we discussed fighter aircraft,” Muilenburg told reporters after the meeting at Trump Tower in New York. “We made some great progress on simplifying requirements for Air Force One, streamlining the process, streamlining certifications by using commercial practices, all of that is going to provide a better airplane at a lower cost.”
Specific reductions have yet to be announced.
Although Muilenburg didn’t elaborate on the fighter jet program, he likely referred to the F-18 Super Hornet, which Trump suggested—via Twitter—last month be priced-out to compete with the Lockheed Martin Corp.’s F-35.
The president-elect boasted of “the massive cost reductions” he has negotiated on military purchases in a Twitter posting Tuesday. “I believe the people are seeing ‘big stuff,’” Trump said.
Last December, Trump threated to cancel Boeing’s Air Force One order via Twitter, saying the price was “out of control.” Boeing vowed at the time to keep the cost of the program under $4 billion.
Boeing’s spokesperson Todd Blecher said in an email that this meeting was part of an ongoing effort to provide Trump’s team the information it requested.
“We remain committed to working with the new president and Congress to provide affordable, capable Boeing products and services to meet our national security needs,” Blecher said.
Analysts said it’s unclear at this stage how the cost reductions will affect Boeing’s business.
“[Air Force One] is only going to be manufactured in a small amount; it’s not going be a huge impact,” Edward Jones analyst Jeff Windau said in a phone interview. “But it’s difficult to fully gauge what’s happening until we know more details of what that cost reduction exactly means.”
Regardless, it’s always good to make things more affordable, and there is no harm to be on the president’s good side, Windau said.
“Obviously he’s the commander in chief, so you always want to make sure you are trying to meet his demands,” he said.
Boeing is currently under a $170 million contract to help determine the capabilities of the Air Force One aircraft, according to a press release on Dec.6, 2016.
After the Tuesday meeting, Muilenburg said Trump is “doing a great job engaging business,” that the two businessmen are “on the same page.”
Boeing stock closed at $157.67 Tuesday, down $1.16.