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Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: Steve G.
Date: April 27, 2022 12:36PM
It was the gold-plating that did it.

Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal. Aerospace giant reports $660 million loss.
[www.politico.com]
Boeing CEO Dave Calhoun told investors on Wednesday said that company executives should not have agreed to then-President Donald Trump’s terms for the Air Force One contract four years ago, citing $660 million in cost overruns in the first quarter of 2022.

Without naming the former president, Calhoun characterized the $3.9 billion contract signed in 2018 to develop two replacement aircraft for the White House as a “very unique negotiation” that Boeing probably should not have taken.

“But we are where we are, and we’re going to deliver great airplanes and we’re going to recognize the costs associated with it,” Calhoun said.

Trump got personally involved in the negotiations for the replacement aircraft. In February 2017, Trump said the Air Force was “close to signing a $4.2 billion deal” and that “we got that price down by over $1 billion.”

“President Trump negotiated a good deal on behalf of the American people,” Boeing said in a tweet after the contract was finalized.

Instead of negotiating a contract that protected the company from changes in supply costs and other factors, Boeing and Trump settled on a fixed-price contract that forces the company to carry the risk and not charge the government.
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: cbelt3
Date: April 27, 2022 01:20PM
Fixed Price contracts were the overreaction to cost plus contract abuses in the 70's/ Companies quickly learned the terrible magnificence of the Change Order.

Sounds like Boeing got an under the table promise from Orange Mussolini that he was never going to keep. Never trust a Trump.
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: vision63
Date: April 27, 2022 02:31PM
So difficult to not kiss his bitchass.
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: kj
Date: April 27, 2022 02:32PM
Boeing got screwed, but it's not like they haven't majorly been on the screwing end lately, so boo hoo. Play the game, you get burned. They didn't have to do a deal that was bad for themselves.
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: RgrF
Date: April 27, 2022 02:48PM
oops



Edited 1 time(s). Last edit at 04/27/2022 02:49PM by RgrF.
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: SDGuy
Date: April 27, 2022 03:32PM
Quote
RgrF
oops

yeah - I'm surprised ANY company would agree to a FFP contract for something that large (both timeline and $ amount) - usually that (FFP) is used for something very predictable, like office supplies already sitting in a warehouse. I would have expected CPFF to have been used. Trump must have been quite the negotiator, I guess.
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: Racer X
Date: April 27, 2022 05:15PM
FFP is fine if the scope is defined and locked in stone. ANY changes require an addendum and extra costs.

The phrase is "scope creep"



********************************************
“A sword never kills anybody; it is a tool in the killer's hand.” Seneca the Younger

The police have no duty to respond. See Castle Rock v. Gonzales, 545 U.S. 748 (2005) or Warren v. District of Columbia[1] (444 A.2d. 1, D.C. Ct. of Ap. 1981)

Judge Lee wrote that “we cannot jettison our constitutional rights, even if the goal behind a law is laudable." 9th Circuit Court of Appeals

[www.youtube.com]
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: Dennis S
Date: April 27, 2022 05:26PM
Are we stuck with the Trump paint scheme?
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: vision63
Date: April 27, 2022 05:28PM
Quote
Dennis S
Are we stuck with the Trump paint scheme?

Maybe we need to start a ruckus up about that. We need to erase all vestiges of Trumpian anything. Retain the Jackie Kennedy color scheme.
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: C(-)ris
Date: April 27, 2022 05:29PM
Quote
Dennis S
Are we stuck with the Trump paint scheme?

Yes if you don't want a huge change order. I assume that any changes that are attempted to be made will incur a huge markup to try and recover lost dollars.



C(-)ris
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Throwback Thursday Signature:
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: vision63
Date: April 27, 2022 05:31PM
Quote
C(-)ris
Quote
Dennis S
Are we stuck with the Trump paint scheme?

Yes if you don't want a huge change order. I assume that any changes that are attempted to be made will incur a huge markup to try and recover lost dollars.

That's just cosmetic. I vow right now to do what I can to stop it.
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: vision63
Date: April 27, 2022 05:34PM
Quote
vision63
Quote
C(-)ris
Quote
Dennis S
Are we stuck with the Trump paint scheme?

Yes if you don't want a huge change order. I assume that any changes that are attempted to be made will incur a huge markup to try and recover lost dollars.

That's just cosmetic. I vow right now to do what I can to stop it.

Ok guys, I just called the White House and have been thusly informed:

With new Air Force One planes still bare, Biden will choose between the jet’s classic livery or a fresh paint scheme
[www.defensenews.com]
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: Ombligo
Date: April 27, 2022 05:36PM
The paint scheme has not been finalized yet. So no need to panic



“No persons are more frequently wrong, than those who will not admit they are wrong.” -- François de La Rochefoucauld

"Those who cannot accept the past are condemned to revise it." -- Geo. Mathias
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: SDGuy
Date: April 27, 2022 06:19PM
Quote
Racer X
FFP is fine if the scope is defined and locked in stone. ANY changes require an addendum and extra costs.

The phrase is "scope creep"

My thought was that there's no way Boeing forecast the massive cost increases in materials that have occurred thanks to COVID - and that is what is burning them now.

I'd imagine that back when they bid this contract, they probably factored in historic inflation rates, with maybe a bit of buffer - but nowhere near enough to account for current reality.
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: Speedy
Date: April 27, 2022 06:29PM
Boeing probably expected to make up any cost overruns on AF1 on other gift contracts from the Trump Administration. Also, any loss by Boeing can be blamed on the 737 disaster.



Saint Cloud, Minnesota, where the weather is wonderful even when it isn't.



Edited 1 time(s). Last edit at 04/27/2022 08:59PM by Speedy.
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: N-OS X-tasy!
Date: April 27, 2022 06:32PM
Quote
vision63
So difficult to not kiss kick his bitchass.

FTFY.



It is what it is.
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: N-OS X-tasy!
Date: April 27, 2022 06:33PM
Quote
Racer X
FFP is fine if the scope is defined and locked in stone.

Which almost never happens...

Quote
Racer X
ANY changes require an addendum and extra costs.

The phrase is "scope creep"

...as you keenly acknowledged.



It is what it is.
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: N-OS X-tasy!
Date: April 27, 2022 06:38PM
It's too bad Boeing couldn't deliver the completed plane -- with the infamous MCAS included -- in time for Trump to use it.



It is what it is.
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: testcase
Date: April 27, 2022 06:55PM
I expect that Boeing has LOTS of "excess" 737 Max aircraft lying around. Perhaps they could "work out a deal"........ boink smiley
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Re: Boeing CEO says company shouldn't have agreed to Trump's Air Force One deal
Posted by: Racer X
Date: April 27, 2022 11:45PM
Quote
N-OS X-tasy!
Quote
Racer X
FFP is fine if the scope is defined and locked in stone.

Which almost never happens...

Quote
Racer X
ANY changes require an addendum and extra costs.

The phrase is "scope creep"

...as you keenly acknowledged.

I was a sub-contractor who billed hourly, so I was happy to accommodate.



********************************************
“A sword never kills anybody; it is a tool in the killer's hand.” Seneca the Younger

The police have no duty to respond. See Castle Rock v. Gonzales, 545 U.S. 748 (2005) or Warren v. District of Columbia[1] (444 A.2d. 1, D.C. Ct. of Ap. 1981)

Judge Lee wrote that “we cannot jettison our constitutional rights, even if the goal behind a law is laudable." 9th Circuit Court of Appeals

[www.youtube.com]
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