A current Air Force One, with President Barack Obama inside, prepares to take off from Andrews Air Force Base, Md., on Dec. 6, 2016.

A current Air Force One, with President Barack Obama inside, prepares to take off from Andrews Air Force Base, Md., on Dec. 6, 2016. AP / Susan Walsh

Trump’s Air Force One Tweet Rattles the Defense Industry

Was the president-elect trying to drive down a price tag — or slap back at a CEO’s policy suggestions?

There are plenty of Pentagon projects that are over budget. A fledgling effort to replace the president’s aging Air Force One jets is not one of them. So when the president-elect tweeted, mysteriously and inaccurately, that Boeing’s costs were “out of control,” it sent chills through the defense industry.

What on earth was Donald Trump doing? And what should other companies do if it happens to them?

“I know the right answer is not going to be ‘tweet back,’” said David Melcher, the CEO and president of the Aerospace Industries Association, the lobbying organization that advocates for Boeing and many of America’s largest defense firms.

At 8:52 a.m. Tuesday, Trump tweeted, “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!” Within 14 hours, the tweet had more than 37,000 retweets and 116,000 likes.

“The tweet raises a risk we had feared, and that is that a populist president will publicly attempt to shame contractors, though in this case, the motive may have been worse than a major cost over-run or poor program performance,” Byron Callan, an analyst with Capital Alpha Partners, said in a note to investors.

Callan and others have speculated that Trump’s anti-Boeing tweet might have been a response to a Chicago Tribune article in which the firm’s CEO opined about the president-elect’s trade policies.

“These sorts of tweets may represent a risk for defense investors, but by and large, we see the risk as fleeting,” Callan wrote.

Trump got several things wrong in his tweet. No order has yet been issued for the new planes — and that’s planes, plural. The Air Force is planning to buy two new jetliners to replace the 26-year-old Boeing 747-200s that have served presidents since George H.W. Bush. But so far, the service has only awarded a $170 million contract to design the next Air Force Ones, which are custom-built mobile command centers designed to stay aloft and connected during a nuclear war. The contract went to Boeing, the only American company that still builds jetliners.

The Air Force plans to spend about $2.8 billion on the project over the next five years, according to Pentagon budget documents. The entire project, for the two tricked-out planes, could reach $4 billion, depending on the type of equipment deemed necessary.

Related: Buying a New Air Force One Is Complicated

Boeing responded to Trump’s comments with a short statement in which it mentioned the $170 million contract. “We look forward to working with the U.S. 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,” the firm said.

AIA’s Melcher — who briefed then-candidate Trump on defense industry concerns over the summer  — applauded Boeing’s handling of the incident.

“I think our job is really to speak as the collective voice of all of companies on issues that we think are important across the industry and not to try to respond or react to today’s tweet or tomorrow’s tweet or anything else,” he said.

“I think our response would be in line with Boeing’s, which is, ‘let’s just look at the facts of this,’” Melchers said. “If you want the Defense Department to look at the requirements and see if they’re too restrictive, causing too much cost, well then perhaps that’s something that could be reexamined.”

Melcher also had these words of advice: “What is tweeted today is not necessarily going to be the policy of tomorrow.”

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.