Donald Trump’s Criticism of Boeing is Not about the Cost of Plane’s
President-elect Donald Trump once again communicated to the world via his twitter account, and this time taking aim at the Boeing Co.
Trump said that the Air Force One order should be cancelled because the “costs are out of control”, at more than “$4 billion”. It is unclear where Trump came-up with this number.
Boeing released a statement Tuesday afternoon noting that the company is currently under a contract with the US government.
“We are currently under contract for $170 million to help determine the capabilities of these complex military aircraft that serve the unique requirements of the President of the United States,” the statement said. “We look forward to working with the US Air Force on subsequent phases of the program allowing us to deliver the best planes for the President at the best value for the American taxpayer."
Outside of Trump Tower the President-elect said to reporter’s: “The plane is totally out of control,” the president-elect told reporters. “It’s going to be over $4 billion … and I think it’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 New York Times reported last October that the Air Force expected development of two new Air Force One planes to require at least $102 million in the coming fiscal year, and $3 billion over the next five years.
Air Force One is actually not a single plane; it’s referring to any plane that happens to carry the president. There are two 747–200s (over 25 years-old), designated VC-25As by the Air Force, that carry the president unless he travels to a place where the runway is too short, in which case he switches to a smaller plane.
The part of this story you may be missing is that, Donald Trump, began his rampage against Boeing when they announced they are building a finishing plant in China.
Last year, Boeing Chief Executive Dennis Muilenburg introduced Chinese President Xi Jinping before about 600 Boeing workers and Chinese airline guests in Everett, he announced the good news of orders and commitments from China for 300 jets.
He also announced (with less fanfare), that Boeing had signed deals to put a 737 jet-completion and delivery center in China, and they would be moving more parts work there.
And this is where Donald Trump enters the story. In September 2015, Trump made his feeling’s known about the Chinese plant announcement when he said: “That will end up taking a tremendous number of jobs away from the United States”.
Boeing has said the new factory in China would not lead to layoffs. But machinist union members said it could still cost them work, and they were expected to protest this decision.
If Boeing had not announced their intent to build a plant in China, does anyone believe that Donald Trump would have lashed-out at them for the cost of this program? And the fact that we’re talking about China only adds fuel-to-the-fire; Donald Trump’s feeling’s towards China have been well documented, when he said at a rally in Fort Wayne, Indiana: “We can’t continue to allow China to rape our country, and that’s what they’re doing”, referring to China’s high number of exports relative to the U.S.
But perhaps the President-elect should first take the time to look at the strategy behind this decision from Boeing’s perspective, before making a pre-conceived decision that this must be a bad thing and taking his case straight to the “crooked” media. I guess when he wants to use the Media maybe they’re not so crooked, but when he perceives the Media is unfair to him, which seems to happen allot, he responds with comments like: The New York Times is “going to hell,” and whining to rally-goers that “I’m not running against crooked Hilary, I’m running against the crooked Media”. But this ‘knee-jerk’ — I can’t help myself — reaction syndrome has become a repeat theme of Donald Trump’s to, well, just about everything.
The reality is, Boeing’s biggest rival — Airbus — already has a final assembly plant in China, which has helped them gain market share in the region; China will be spending $1 trillion dollar’s on airplanes, which accounts for nearly half of the total airplane deliveries in Asia-Pacific region over the next two decades.
Now, maybe having this knowledge wouldn’t have made a scintilla of difference to the President-elect, but it would certainly give people more confidence that he does his homework, and just maybe we would see a real miracle right before our eyes, and President-elect Trump might even gain a better understanding of how this can only help the Boeing Companies future business prospects in that region of the world. And if it allows Boeing to be competitive with Airbus in that region, it can only be good for Boeing’s long-term business outlook, and that can only be good for the future of Boeing’s employment outlook, everywhere. I think that’s a good-thing, right?