Industries News.Net

"Cancel order!" Trump says on Boeing's Air Force One contract, corporate America unnerved


Big News Network.com
7 Dec 2016

WASHINGTON, U.S. - U.S. president-elect Donald Trump has been embroiled in controversy over his massive business dealings and been forced to face questions over potential conflicts of interest between his financial holdings and the decisions that will reach his desk once he enters the White House.

However, there is one area, in which the president-elect may possibly be in the clear.

According to his spokesperson, Trump sold all his stock holdings, which included a number of the country’s best-known companies, among them Apple, Walmart and MasterCard, in June.

Trump’s largest single holding was a stake in a multi-strategy fixed-income hedge fund managed by BlackRock that had a value of at least $25 million.

Spokesperson Jason Miller, at the time of his announcement, seemed to be saying that the president-elect had sold his shares in Boeing. But Miller later told at least two media outlets that Trump had sold his shares in all public companies, not just Boeing.

While it is not possibly to confirm the sale, Trump, during his first term, will have to release a financial disclosure form that will include information about his stock holdings.

The business tycoon-turned president-elect, meanwhile, recently demanding the government cancel a multibillion-dollar order for new presidential planes and then hailed a Japanese company's commitment to invest billions in the United States.

His declaration about Air Force One caused manufacturer Boeing's stock to drop temporarily and raised fresh questions about how his administration — not to mention his Twitter volleys — could affect the economy.

"The plane is totally out of control," Trump told reporters. "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." 

Earlier he had 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!"

After that, Trump referred to one of his books when he said in another Twitter post, “Have you not read Art of The Deal? This is how I strike my deals. If Air Force One costs more than $4 Billion, Boeing you are fired!”

He also praised Masayoshi Son, the CEO of SoftBank, a massive telecommunications company. Trump pointed proudly to Son's commitment to invest $50 billion in the United States, which Trump said could create 50,000 jobs.

Trump's Twitter outburst against Boeing, according to reports, may have been prompted by an interview in the Chicago Tribune with Boeing CEO Dennis Muilenberg, who said, “Anyone who paid attention to the recent campaigns and the election results realizes that one of the overarching themes was apprehension about free and fair trade.”

Fair trade has helped Boeing, which prides itself on being America’s largest manufacturing exporter.

The company has not yet begun building the two replacement planes, which are expected to go into service in 2024.

No money has yet been awarded to the company as part of the contract.

In a statement, Boeing said, "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."

“We look forward to working with the U.S. Air Force on subsequent phases of the program allowing us to deliver the best plane for the president at the best value for the American taxpayer," it added.

Boeing's Chief Executive Dennis Muilenburg, meanwhile, spoke to the president-elect following his Twitter outburst during which the two had a constructive dialogue.

Muilenburg, reportedly, told Trump the cost of the airplane could be lowered if the U.S. Air Force changed its requirements and the issue would likely be resolved without a major dispute.

And reacting to the controversy, current White House spokesperson Josh Earnest on Tuesday said the contracting arrangements for replacements were "rather complicated" and the recommendations for upgrades had been made by national security experts.

"The American people would expect that future U.S. presidents would benefit from unique and upgraded capabilities while they are traveling and representing the interests of the United States around the world," he stated.

According to federal budget documents published in February, research, testing, evaluation and development costs of the program are estimated to be around $2.87 billion through fiscal year 2021. 

The figure doesn’t include the costs of new planes, however. When that is factored in, the price tag may be around $4 billion, U.S. officials said.

The current Air Force One blueprint includes extensive modifications to a Boeing 747-8 plane, adding military avionics and advanced communications to a self-defense system.

Lawmakers, meanwhile, reacted with bewilderment to Trump's tirade against Boeing.

Sen. Richard Shelby (R-Ala.) smiled when informed of Trump’s tweet and said that if “it will save money or if he can negotiate a better deal, that’s good for the taxpayers.” 

Others, including Sens. Roy Blunt (R-Mo.) and Tom Carper (D-Del.), laughed and said they wouldn’t comment on the latest in a string of policy pronouncements made by Trump via Twitter.

They also referred to the fact that Trump himself will not be using the new Air Force Ones, which aren’t set to be ready for another decade.

Rep. Rick Larsen and Sens. Patty Murray and Maria Cantwell, all Democrats from Washington state, defended Boeing.

“Replacing the 26-year-old Air Force One aircraft will support good-paying jobs throughout northwest Washington and is important to ensuring the safety and security of future presidents,” they said in a statement. 

“The president-elect’s tweet does nothing to change those basic facts.”

The president-elect's unusual style, announcements and Twitter declarations have unnerved a corporate America that traditionally craves stability. Some business leaders and economists worry whether executives can speak their minds about Trump or his policies without fear of facing his rage.

“The president has so much power, you always wonder if there’s some implicit threat to individuals, and that goes beyond what I think a limited government should do,” N Gregory Mankiw, a professor at Harvard, said.

Copyright ©1998-2024 Industries News.Net | Mainstream Media Limited - All rights reserved