Author Topic: Trump: cancel Boeing's Air Force One contract  (Read 3512 times)

Angel Eyes

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Trump: cancel Boeing's Air Force One contract
« on: December 06, 2016, 03:01:41 PM »

http://www.politico.com/story/2016/12/trump-boeing-air-force-one-232243

Quote
Donald Trump on Tuesday called for the cancellation of a Defense Department contract with Boeing to build the next generation of presidential aircraft, decrying the deal as too expensive.

“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!” the president-elect wrote on Twitter.

A couple of thoughts:

1) Announcing his intent to cancel via Twitter is . . . unconventional.   If any Boeing executives are following Trump, their blood pressure probably just spiked.

2) Other DoD contractors are probably getting nervous right about now, which is not necessarily a bad thing.

3) If memory serves, Nancy Pelosi demanded a new plane when she was House Speaker, claiming that the existing aircraft didn't have the range to fly her from D.C. to California non-stop.   Interesting difference in attitudes.

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Perd Hapley

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Re: Trump: cancel Boeing's Air Force One contract
« Reply #1 on: December 06, 2016, 03:15:03 PM »
The scary crypto-fascist Republican president cutting .mil expenses.  :laugh:
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Re: Trump: cancel Boeing's Air Force One contract
« Reply #2 on: December 06, 2016, 04:03:59 PM »
I caught a few minutes of Rush today.  He mentioned that Boeing was tied in with Clinton on some trade deals.  They donated almost a $million to the Clinton Foundation and hired Bill Clinton for a $250K speech. 

Even if this is just noise to get Boeing to sharpen their pencils on the cost, that is fine with me.  Trump is unconventional, but I think it is a good change of pace to shake things up a bit in D.C. 
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Re: Trump: cancel Boeing's Air Force One contract
« Reply #3 on: December 06, 2016, 04:31:52 PM »
Quote
1) Announcing his intent to cancel via Twitter is . . . unconventional.

He's going to make the conventional news media irrelevant- which I applaud heartily.
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RevDisk

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Re: Trump: cancel Boeing's Air Force One contract
« Reply #4 on: December 06, 2016, 04:47:17 PM »

Not the first time this happened. Marine One replacement was insane, over a billion per helicopter. Literally, at Sikorsky, we tried coming up with ways of making our aircraft cost that much. Even gold plating every surface on an S92 wouldn't have cost that much. When it got canceled and handed back to us, our numbers looked around $205M per aircraft. Which, btw, was around the average cost for the head of state version. The oil platform air taxi version was usually around $50 ish million. I'll skip details, but there was a lot of costly stuff we did on those aircraft. Four or five time cost runup isn't unusual as the air taxi version doesn't have the same radios or defenses.

A billion dollars for a head of state 747 is unreasonably high. $400 to 500m would not have been.
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MechAg94

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Re: Trump: cancel Boeing's Air Force One contract
« Reply #5 on: December 06, 2016, 04:57:44 PM »
Rush mentioned that those Air Force 1 jets have a fully fitted operating room on board.  I am sure they have a lot of extra stuff, but billions does seem a bit high.
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Re: Trump: cancel Boeing's Air Force One contract
« Reply #6 on: December 06, 2016, 05:05:57 PM »
This is going to be a slap upside the head for a lot of government  contractors. It's been a long time since someone who understands business and contracts has been in the big chair. Also someone who can spot "unanticipated cost overrun" crap. Also someone who is the antithesis of the Pelosis in politics who looks at this stuff in a utilitarian way versus a "perk" way.

I know no one who knows could ever say, but I'd be really interested in the costs of offensive/defensive systems, countermeasures, and other security components that go into the aircraft above and beyond "regular" build costs. I would still agree that even the most sophisticated stuff is not going to add up to the current price. I AM willing to bet there's at least 10 million in "travel" built into the budgets.

EDIT: I would also guffaw if these end up going through with revisions, that Trump insists that all office furniture, etc. be sourced from the regular GSA sources and that there are no $50,000 wood desks, designer sofas, etc. in the living/work quarters.
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Re: Trump: cancel Boeing's Air Force One contract
« Reply #7 on: December 06, 2016, 06:48:58 PM »
A billion dollars for a head of state 747 is unreasonably high. $400 to 500m would not have been.

Given that the base plane is roughly $380M, I'd say that $500M is low.  $1B is reasonable given the level of modification.  The anticipated $2B cost per plane is not.

Quote
EDIT: I would also guffaw if these end up going through with revisions, that Trump insists that all office furniture, etc. be sourced from the regular GSA sources and that there are no $50,000 wood desks, designer sofas, etc. in the living/work quarters.

I doubt it.  The furniture pretty much has to be custom anyways because it has to fit on the plane, be light yet secure, and seating like the sofas need to be able to have people strap in.  The market for aircraft desks is not so large for that stuff to NOT be custom, I think.

Now a base model as opposed to the extreme posh?  More doable, but I think even Trump will realize(or somebody will tell him) that the poshness of Air Force 1 is a reflection on the USA.

Perd Hapley

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Re: Trump: cancel Boeing's Air Force One contract
« Reply #8 on: December 06, 2016, 06:52:58 PM »
EDIT: I would also guffaw if these end up going through with revisions, that Trump insists that all office furniture, etc. be sourced from the regular GSA sources and that there are no $50,000 wood desks, designer sofas, etc. in the living/work quarters.

So would I, but what Firethorn said. Would be funny if he said it, though.
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Ben

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Re: Trump: cancel Boeing's Air Force One contract
« Reply #9 on: December 06, 2016, 07:41:33 PM »
Believe me, I know that most things in aviation are "custom" and what's not custom is at least 2x more than a similar item for a non-aviation environment. Sometimes for good reason, sometimes because they can just get away with the higher price (ref: aviation windshield cleaner).

That sentence was somewhat in jest, other than their ability to make the environment more austere and business-like vs posh and luxurious. I was on the design team for a federal vessel some years back, and the team lead decided (for a scientific work vessel) to go with some high end "sustainable" imported wood on most all interior surfaces except lab tables and the galley table. I forgot the exact cost, but it was ridiculously expensive, and she could have gone "plain sustainable wood" for much less (let alone non-sustainable for much. much less), but she decided to go with the fancy design as well. It was appropriate for a yacht, at taxpayer expense.

I'd love to see them go with non-luxury materials in Air Force One. They don't need to go with plywood, but they certainly don't need the rich Corinthian leather either. You can make things look higher end for the leader of the US, but you probably don't have to overdo it either. Also they could contract with the same food provider as United and charge reporters for their meals when they ride on the plane. Exact change only please.  =D
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griz

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Re: Trump: cancel Boeing's Air Force One contract
« Reply #10 on: December 06, 2016, 08:56:27 PM »
I'm sure it's pretty fancy and comfortable, but my understanding is a lot of the costs are shielded wiring, more communications than usual, stuff like that.  But I've never priced any 747, much less a custom one.  So I can't say how much it should cost.

Anybody know why they need or want a new one?  I know a 747 airframe should last a long time, and the current ones are already 747s.  Obama was a smoker, maybe the ashtrays are full.
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Re: Trump: cancel Boeing's Air Force One contract
« Reply #11 on: December 07, 2016, 08:18:31 AM »
Since the current versions have been in service since 1990 and are getting expensive to maintain.
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Re: Trump: cancel Boeing's Air Force One contract
« Reply #12 on: December 07, 2016, 08:54:18 AM »
Plus after a certain point I imagine it's cheaper to just get a new one with new "modifications" than to keep periodically upgrading the current stock.
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Brad Johnson

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Re: Trump: cancel Boeing's Air Force One contract
« Reply #13 on: December 07, 2016, 09:31:30 AM »
I'm sure it's pretty fancy and comfortable, but my understanding is a lot of the costs are shielded wiring, more communications than usual, stuff like that.  But I've never priced any 747, much less a custom one.  So I can't say how much it should cost.


This.

AF1 is a flying mini White House with a dash of Pentagon and a pinch of NORAD thrown in for good measure. My guess is the furnishings and interior accouterments are a minor portion of the added cost. The base aircraft is just there as a starting point; a plane-shaped object which will eventually cart around a hugely expensive collection of custom made highest-of-high-end military hardware and electronics wrapped in a sthooper stheekrit blanky of technology designed to keep it running in a worst-case scenario. It would genuinely surprise me if the electronics alone weren't at least double the cost of the base aircraft, never mind things like airframe strengthening, custom uprated engines, EMP shielding, and defensive countermeasures. Throw in enough spares to accommodate servicing and replacement over the anticipated service life of the aircraft and $2B isn't surprising at all.

Brad
« Last Edit: December 07, 2016, 09:54:00 AM by Brad Johnson »
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Re: Trump: cancel Boeing's Air Force One contract
« Reply #14 on: December 07, 2016, 10:49:48 AM »
This is going to be a slap upside the head for a lot of government  contractors. It's been a long time since someone who understands business and contracts has been in the big chair. Also someone who can spot "unanticipated cost overrun" crap. Also someone who is the antithesis of the Pelosis in politics who looks at this stuff in a utilitarian way versus a "perk" way.

I know no one who knows could ever say, but I'd be really interested in the costs of offensive/defensive systems, countermeasures, and other security components that go into the aircraft above and beyond "regular" build costs. I would still agree that even the most sophisticated stuff is not going to add up to the current price. I AM willing to bet there's at least 10 million in "travel" built into the budgets.

EDIT: I would also guffaw if these end up going through with revisions, that Trump insists that all office furniture, etc. be sourced from the regular GSA sources and that there are no $50,000 wood desks, designer sofas, etc. in the living/work quarters.

Unfortunately, not possible. All fixed furniture has to pass flammability tests to be mounted in an aircraft, per FAA regs. It doesn't have to be designer or luxury, but the cost difference isn't huge between a regular seat and an ultra luxury seat. I mean, it is, but not comparatively speaking. Brand new, a two seat module might run you $50k-70k. A three seat module $70k-$100k. Bulk purchasing drives that down significantly, but that's realistic pricing for a low volume purchase. A single first class seat will cost you $80k. A head of state seat will cost $100k. Maybe $150k if you use certain ultra high grade material. So a POTUS seat is roughly twice as expensive (before markups, obviously) as the cheap 'swine' grade seating in your cheapest econo-airline. Maybe near same pricing.

A "no frills" prison labor grade desk made to aircraft specs would cost you $50k for FAA compliance, flammability rated material, etc. The President of South Korea's aircraft desk was around $100k plus install labor. It was very nice but also armored. So, yes, it's a lot of money but it's not a huge scale issue. The biggest issue is space and weight, not cost. Trying to retrofit GSA bog standard kit to FAA compliance would probably cost ten times as much as just buying standard aircraft kit. Because you'd do so by throwing out the GSA stuff, and trying to make something that looked like it out of aircraft grade parts.

Now, missile defenses ARE hideously expensive if you are looking at low volume sales. Assuming you can get the paperwork approved, you can and should cheat by using military anti-missile defenses. For some uh, "special aircraft", we used radios typically found on F-16's, some Euro LIDAR and some anti-missile defenses typically found on bombers or transport aircraft. That's a spot where defense contractors can and do markup insanely. Snag a chaff and flare module off an AC-130, with a unit cost of say, $2m because you make tens of thousands of them. Give it a new SKU as "El Presidente Grade Countermeasure Suite" and mark it as $30m because you make "tens" of them. Sadly THAT kind of skimming is more honest than actually developing a brand new countermeasure suite at the cost of hundreds of millions when you could have snagged an existing system for a tenth or hundredth a price. But cost plus accounting lends itself to reinventing the wheel. If you're capped at 5% margin, you can double your profits by doubling the project cost.

EMP/EMI resistant stuff is just hideously expensive period.

The way to get the aircraft down in cost is to get an honest person at the project manager. And give them the authority to beat up procurement as well as the vendor.


Given that the base plane is roughly $380M, I'd say that $500M is low.  $1B is reasonable given the level of modification.  The anticipated $2B cost per plane is not.

I doubt it.  The furniture pretty much has to be custom anyways because it has to fit on the plane, be light yet secure, and seating like the sofas need to be able to have people strap in.  The market for aircraft desks is not so large for that stuff to NOT be custom, I think.

Now a base model as opposed to the extreme posh?  More doable, but I think even Trump will realize(or somebody will tell him) that the poshness of Air Force 1 is a reflection on the USA.

Actually, good catch. They are using a 747-8, which is in the $350m ballpark. Mentally I was assuming they were using previous VIP birds based around the 747-400m which is $200m-$250m. I'd still argue from personal experience that I could Presidentialize an 747 for around $200m, maybe $300m. Per bird, obviously. While still pocketing huge markups.  A billion per bird is still high, but probably 'reasonable' to the defense aircraft procurement folks. It shouldn't be.
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griz

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Re: Trump: cancel Boeing's Air Force One contract
« Reply #15 on: December 07, 2016, 11:42:24 AM »
I didn't know the current planes had been around since 1990.  That's a while for an airplane,  I can see where replacement is reasonable.
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Re: Trump: cancel Boeing's Air Force One contract
« Reply #16 on: December 07, 2016, 01:16:12 PM »
Actually, good catch. They are using a 747-8, which is in the $350m ballpark. Mentally I was assuming they were using previous VIP birds based around the 747-400m which is $200m-$250m. I'd still argue from personal experience that I could Presidentialize an 747 for around $200m, maybe $300m. Per bird, obviously. While still pocketing huge markups.  A billion per bird is still high, but probably 'reasonable' to the defense aircraft procurement folks. It shouldn't be.

So, aside from the cushier interior, what's the real difference between a $250M E4B and the 4x as expensive thing they're pushing?

MikeB

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Re: Trump: cancel Boeing's Air Force One contract
« Reply #17 on: December 07, 2016, 01:43:11 PM »
Even if the pricing isn't inflated, as a business negotiation I have no problem with him complaining even publicly about the price. Make Boeing come back with a better offer or justify the current offer, that's pure capitalism. Heck if I were negotiating the deal I'd tell Boeing it was their patriotic duty to make those particular planes at zero profit, and they should consider them to be free advertising as a starting position on the price.

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Re: Trump: cancel Boeing's Air Force One contract
« Reply #18 on: December 07, 2016, 02:24:30 PM »
So, aside from the cushier interior, what's the real difference between a $250M E4B and the 4x as expensive thing they're pushing?

Current Air Force One and the E4B are both 747-200B. The E4B is slightly more EMP hardened than the normal Presidential aircraft, but give up certain capacities to do so. Analog instruments and whatnot.

The -8 is about 20 feet longer, roughly same cargo hold, etc. Biggest difference is 1700 more miles of range. More eco friendly, allegedly. Not sure if it's worth $120m more.
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Re: Trump: cancel Boeing's Air Force One contract
« Reply #20 on: December 22, 2016, 11:26:08 AM »
Well, it appears Boeing can do it for less. :)

http://www.foxnews.com/politics/2016/12/21/boeing-ceo-vows-to-build-new-air-force-one-for-less-after-trump-complaints.html

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Maybe that needs to be updated to, "When the going gets tough, Boeing gets going"?
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Brad Johnson

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Re: Trump: cancel Boeing's Air Force One contract
« Reply #21 on: December 22, 2016, 12:16:21 PM »


Maybe that needs to be updated to, "When the going gets tough, Boeing gets going"?

Or, more appropriately...

"When someone who knows how to read spreadsheets and P&Ls is elected President, military contractors suddenly develop a renewed sense of fiscal prudence."

Brad
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Re: Trump: cancel Boeing's Air Force One contract
« Reply #22 on: December 22, 2016, 12:38:58 PM »
Or, more appropriately...

"When someone who knows how to read spreadsheets and P&Ls is elected President, military Government contractors suddenly develop a renewed sense of fiscal prudence."

Brad

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Re: Trump: cancel Boeing's Air Force One contract
« Reply #23 on: December 22, 2016, 11:05:05 PM »
This was all over NPR about a week after the election. Hell the had the CEO of Boeing on the show.
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Re: Trump: cancel Boeing's Air Force One contract
« Reply #24 on: December 24, 2016, 12:39:52 PM »
I read something the other day that said Trump asked Boeing the give him numbers for new f-18's, Apparently making Lockheed's stock to drop.
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