Trump Is Correct – Boeing Is Gouging The Taxpayer On The New Air Force One

Tyler Durden's picture

Submitted by Duane via Free Market Shooter blog,

air-force-one-in-flight

The designation/callsign “Air Force One” has been around since around the time of WWII, with FDR being the first president to fly while in office.  Since 1943, with only a couple exceptions, the Air Force has been flying custom versions of Boeing commercial airliners for the presidential flight mission.  Most recently replaced in 1990, the president currently flies in a modified 747 with the military designation “VC-25”; two copies were produced for a cost of $325 million apiece, and the callsign “Air Force One” is only used when the president is onboard.

Even though it is still extremely advanced, Air Force One is due for a replacement.  Currently, the operating cost for each VC-25 is $210,877 per hour; an extremely high figure, likely because of the dated nature and high maintenance costs of both the airframe and the avionics suite.

However, with a total program cost estimated to be around $4 billion dollars, Boeing is clearly gouging the taxpayer.  The newest derivative of Air Force One will end up being over six times as expensive as the last one, which was built on the same airframe.  I guess Boeing just thought the higher price tag was going to slip through the cracks of a bloated DoD budget?

The older 747-200 the current VC-25s were derived from has been out of production since 1991, with the 747-8 being the current variant under production.  Boeing has considered ending production of the 747 altogether, once its current backlog of 21 aircraft orders (including the VC-25 replacements) is fulfilled.

The relative inefficiency of the 747 is the top reason for its decline.  It has lost the highest trafficked overseas routes to the Airbus A380, which the 747 once dominated.  Also, commercial and cargo airlines have largely switched to more efficient Boeing 777s and 787s, as well as the Airbus A340 and A350, with twin engines and newer, more efficient designs cutting their costs far below that of the 747.  While it could be argued that the Air Force should modify a twin-engine Boeing jet such as the 777 or 787 instead, their desire for a larger four-engine jet to transport our nation’s leader is understandable, given the dangers the jet could face.

Two VC-25s

Which one of the two pictured is “Air Force One”?

Critics have come out in force to justify the ridiculous cost of the Air Force One program, though they seem more interested in criticizing the president-elect than they do in explaining the aircraft’s price tag.  In a USA Today article detailing Trump’s attack on the cost of the AF1 program, aviation analyst Richard Aboulafia didn’t provide any evidence to support an increased cost for the jets, instead choosing to criticize the president-elect for daring to mention that the aircraft is grossly overpriced. 

Richard Aboulafia, aviation analyst at the Teal Group, said the current Air Force One planes were made in the 1980s and have become obsolete. The planes are equipped with state-of-the-art communications technology and defense mechanisms to survive nuclear war or terrorist attacks, he said.

 

Anything in the $3 billion to $4 billion range would be reasonable, and a belief otherwise is “completely ignorant,” he said.

 

“This is the wrong place to talk about cost control,” Aboulafia said. “People aren’t upset in Washington about a relatively small program being canceled. They’re upset we have a president who doesn’t understand what is needed to be president.”

Aboulafia wants you to believe that not only has the cost of replacing Air Force One gone up so drastically due to inflation, higher materials costs, redevelopment of an existing airframe, or whatever ridiculous expenditure he didn’t cite, he seems to be implying that the current VC-25s don’t already have similar EMP and nuclear/biological/chemical protections built into them already.  Of course, AF1 has all of that and more, and it is by far the most sophisticated VVIP transport plane in the world, even at 25+ years old.  Even the aircraft’s maintenance crews know that despite its age, it is anything but obsolete.

There was no mention from USA Today that even the original contract estimation of $1.65 billion dollars for the pair of VC-25s was already a significant markup upon an airframe that had been previously modified by the Air Force for the AF1 role, and should not have been nearly that expensive to do again in the first place.  Bear in mind, as USA Today stated, the US Government Accountability Office (GAO) recently reappraised the program’s cost to the $4 billion dollar figure, noting it would be “including $2 billion for research and development”.  How exactly is this price tag considered “reasonable”?

For reference, the other “most expensive” airplane in the Air Force’s inventory, the B-2 Spirit stealth bomber, is estimated to cost about the same $2 billion per copy as the new VC-25s.  However, the high per-unit cost of the B-2 is due to the buy being cut from 132 to 21, after the end of the cold war, averaging a high R&D cost across a much smaller number of aircraft.  Had the Air Force bought even another 20 of the planned units, they could have been purchased for $566 million each.  Coincidentally, the Air Force’s new stealth bomber, the B-21, is estimated to cost about $511 million a copy (before the appropriate cost overruns, of course).

So the MSM, and our government for that matter, is OK with a replacement Air Force One being six times as expensive as its predecessor, and about as costly as four new copies of already ridiculously overpriced stealth bombers.  And the MSM is also somehow critical of the president-elect for bring this to light.  Is it any wonder they feel the need to defend their bias by calling alternative coverage “fake”?

Trump is correct to call out Boeing for this injustice they are doing to the taxpayer.  Not only is he calling attention to another runaway military expenditure, he is putting all government contractors on notice.  Whether the MSM believes the president should be focusing his attention elsewhere or not, he is demonstrating that he is not afraid to call out any contract size or any contractor for gouging the taxpayer.

Hopefully, Trump’s conduct will keep government contractors’ heads on swivels, and wary of the repercussions of overbilling on government contracts for as long as he is president.  Still, our government spends close to $4 trillion annually, and Trump cannot be everywhere at once.  Don’t be surprised when reports of more over-budget, behind schedule government programs appear during his presidency.

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Mr Pink's picture

Is Trump getting sick of always being right?

G-R-U-N-T's picture

Not at all, he know's the people get tremendous pleasure at watching the Washington cesspool squirm like the worms they are!

NoDebt's picture

Trump's criticism has little to do with the cost of these two airplanes.  Boeing has its fingers in every fucking government pie since forever.  They were one of the biggest companies lobbying congress to give Obama unilateral authority to strike the Iran nuke deal and open them for business (Iranian airlines are flying 35 year old pieces of shit with spit and duck tape holding them together).... and Boeing wants to sell them new airplanes.  Trump just fired a shot across their bow.

Like with the Taiwan thing, this is Trump playing multi-level chess, not Obama's strutting around and shitting on the board pigeon-chess.

Trump understands exactly where the pain points are (basically, any company living off of government largesse for decades).  He's putting his thumb directly on those pain points and applying pressure.  

underman's picture

And he hasn't even taken office.  This is over the sweater, jeans still buttoned up stuff.  Wow.

NoDebt's picture

"This is over the sweater, jeans still buttoned up stuff.  Wow."

Fucking LOL.  Great line.

This is not your father's President.

Manthong's picture

I know airplanes, airframes, engines, advanced hard and reactive armor, advanced avionics , navigation, high encryption communications, A-A and G-A passive and active defense, laser and nuclear defense solutions.

I can do that job for half the price.

Maybe an A-380 might be a good primary platform.

I kind of think Battlestar Galactica would be a good framework to start the planning process.

 

.....I can aslo bar-b-cue grill the best steak in the country.

 

wee-weed up's picture

Get real, folks. Trump will whip Boeing into shape per the contract - but no other company is going to build Air Force One. That is, unless you want the Euroweenie company Airbutt to do it. Not a chance.

SafelyGraze's picture

NPR had this one covered on their "radio" "broadast" of the "news"

turns out that the cost is $3.2 billion which is pretty reasonable, and $4 billion is only a modest overrun.

so DT was way, way out of line with his complaints.

because $3.2

 

HowdyDoody's picture

Expense? Gouging? Look at that paint job. It is top notch, not done by some fly by night chop shop. The paint job alone is worth top dollar + 20% contingency.

 

1980XLS's picture

It's gunna have to get re-painted quite soon,

 

http://i31.tinypic.com/rk0sjk.jpg

NewHugh's picture

And that's tha same NPR that brags about how Obozo has vastly rebuilt the economy after how GWB left it. No bias there... /S

SixIsNinE's picture

geez Graze,  guess people like their fake news better than good ol' fashioned apple pie & NPR Real News.  Debbie Downers !

because $3.2

 

 

/s   LuLZ

NoDebt's picture

Easy, chief.  I grill a pretty fucking mean steak myself.  None of that wipe-on BBQ slop required to blow your mind.

;)

 

 

Manthong's picture

.. oh no, just salt, pepper, a few dashes of Worcestershire, and TLC knowing how to work the flame....

 

:-D

..and then I just go install an ECM deck in the bottom of a 747.

detached.amusement's picture

just did my steak up like that last night, +1

FreedomGuy's picture

I think defense contractors throw out sucker prices to see if they can get it. They generally have several senators and a fart of Congressmen who have assembly plants in their districts to push it through or hide it in a larger bill.

The article is correct. How about they show an itemized list of why it costs as much as a cruiser, nuclear sub or an infantry division?

G-R-U-N-T's picture

Indeed, however without colluding politicians and crony lobbyists, Boeing would be left competing for those contracts and allowing other up and comers to have a shot. I see Trump cutting the reins off long time private sector appendages of many Federal contracts and opening it up for others to compete. 

SoDamnMad's picture

I look at the Air Force tanker deal as an example of Boeings Bullshit. They bid and LOST. Then went to their paid-off congressmen and demanded that Airbus lose the deal even though Airbus would have opened a US plant with US jobs. So they get the tanker order and immediately things won't work(I think the boom had to be totally revamped).  So now it is behind schedule and the cost is going up. So the argument about having it homegrown now requires we fight wars with the old KC-135s and the DC-10s which are really, really old though the Air Force does a hell-of-a job keeping them flying. 

Hal n back's picture

Trump is just using something called common sense.

 

Back in the day, I started my career as an auditor. I was assigned to what appeared to be shiity small company audits. I mean really small, like 15-20 employees. When I startd doing hte work I saw how profitable these companies were, how lean and mean they were, because the owner was there every fricking day watching over things.

It turns out these small audit clients had some very complex tax situations because of their wealth which commanded high rate billing and they were happy to pay as they felt they received high vlaue.

 

anyway thse guys to a  person were pretty crude but to the point and did not waste words. These were the guys that came back from WW2 and built these small successful businesses that eventually became biger much bigger when their kids took over --these kids were well educated and polished but they said the same things but more politely.

Whats the difference with Trump? The difference is he is aggrevatives people who have gotten away with crap for their entire careers never questioned  etc.

its kind of like the "snowflakes" we talk about here--no understanding of the real world.

Trump so far is acting like its is own money being spent. He is going to drive congress up a wall. As well they should be held accountable.

That is why this upcoming  debt ceiling discussion is going to be interesting, I hope.

I anticipate a President who does cost cutting. No more 500 buck wrenches.

 

IMO our #1 problem is ourselves and how we allowed the debt to get so high. We know the welfare state and all that but obscene prives from vendors have made the vendors and crony congresspeople wealthy--now its time to let the air out. Medicare, govt contracts of all sorts. This is does happen wil really change the USA.

 

Raffie's picture

TOLD YOU SO.

I worked at Booing long enough to know their BS.

I am a Man I am Forty's picture

love the process and not worry so much about the dough kind of mentality

ChanceIs's picture

Hey!!!!!

"We are going to win so much you are going to get tired of winning."

Me not be tired yet boss.

 

NoDebt's picture

"Me not be tired yet boss."

Me neither.  Give him room to run.

Dammit, I almost don't care how his strategy plays out.  The way it was going before was a fucking demoralizing "death by a thousand cuts" hell on Earth.  GO.  If he fucks up and this all boomerangs on us, we'll chuck his ass out in 4 years.  We're fucked either way, why not try something different?

 

 

ChanceIs's picture

Hey!!!!!

"Vote for me.  What do you have to lose????"

My God. What an election slogan.  How accurate.  What a shame on the American voter for him to have been able to say that - with certitude.

NoDebt's picture

We didn't say shit with certitude.  We're WAY past that.  We said between the choice of staying in the building and burning to death or jumping out the window we chose to jump out the window.   Anyone tells you how this shit is going to work out is a fucking liar.  But we couldn't stay in the burning building any longer.  

 

detached.amusement's picture

Especially once those microwaves started boiling our shirts that we'd soaked with water, then the jump didnt seem quite so bad after all

thestarl's picture

Sums up my attitude towards Trump ND

edotabin's picture

--"Is Trump getting sick of always being right?"--

How about the government always being wrong? How can these people sit there in a job that revolves around the "as long as it lines the pockets" mentality?

I hope he shakes the foundation to the core. Clean it all out. It is loooooooooooooooooooooooong overdue.

Badsamm's picture

I cant wait to see traitors hung by their feet

Ecclesia Militans's picture

Back in 2002, Trump was having a public spat with Richard Branson about some things, and it was being featured in NY papers and on radio news.  I tuned in to a Trump interview and he was asked about Branson's latest comment about him, to which he responded "listen, this guy claims he is a billionaire, and he owns an airline.  Well, I've owned an airline, and let me tell you - it's impossible to own an airline and be a billionaire."

Right then and there, I knew this guy knew a thing or two about a thing or two.

sinbad2's picture

Boeing has had its snout in the taxpayers trough for decades, it's standard corporate socialism, the poor give, and the rich receive.

Troy Ounce's picture

 

 

That's why Obama has the word "FAIL" tattood on his forehead.

Normalcy Bias's picture

I could see $4B, for a stealth Air Force One Scramjet...

Mtnrunnr's picture

Nah. 4 billion for bag of saline though, that's where we're headed.

flaminratzazz's picture

that bastard better be able to dive into the ocean and turn into a sub for that money

detached.amusement's picture

hahahaha, that was frickin hilarious for some reason.  flaminratzazz almost sounds like a rudiment.

Mtnrunnr's picture

It blows me away that my fellow liberals are somehow upset about this. He's doing what should have been done years ago: NEGOTIATE A FUCKING CONTRACT. All this bullshit about costing jobs? Who's money is praying for that? I didn't vote for him but Aside from some of his appointments I dig what he's been doing.

IridiumRebel's picture

He could cure cancer and some folks would still not like it.
Good in you for an open mind. I hope he keeps it up. I've been semi-ok with what's been done so far.

flaminratzazz's picture

He could cure cancer and some folks would still not like it.

burzynski did and they hated him for it

warning the video above is heavy piss-off alert.

FreedomGuy's picture

Refreshing to see an open mind. I voted while holding my nose. I do not think he is demon nor savior but willing to give him a chance. While I cringe at some of his tweets, I like most everything he is doing and that he breaking that slow water torture establishment. That stuff was going to grind us to a painful powder of central planner dust.

He has no ideology, left or right and it may be an advantage.

Pumpkin's picture

Four Billion Fucking Dollars?  Ya think!

Mini-Me's picture

$4B for a couple planes?  Hey, Mr. Taxpayer, grab your ankles.  Again.  And no reach-around.

flaminratzazz's picture

stfu or they might decide to let you sample their taxpayer paid cluster bombs.

webmatex's picture

And another 4B for the new prez helicopters!

toxic8's picture

That's four thousand million... Extra cup holders and a golden commode?

Twatter's picture

Just make sure the Obama back chute disgrace exit is not included. Trump does not even need this clunker He has better gear.

 

I am going to invest according to Trump Tweets in the future.

IridiumRebel's picture

Trump needs to call ALL of this waste out.

The Iconoclast's picture

Weirdest fuckin' thing going on over on Yahoo News and Yahoo Finance.  Overwhelmingly pro-Obama, anti-Trump comments with upvotes on the stories.  For example https://www.yahoo.com/news/corey-lewandowski-trump-has-already-accomplis... and http://finance.yahoo.com/news/kellyanne-conway-no-excuse-trump-134750595...

On Wapo, maybe, but on Yahoo it's been pretty overwhelmingly pro-Trump.

 

IridiumRebel's picture

Probably bots. Soros has a lot of money. I expected they would do this.
Control the narrative. They tried on TV but didn't work. AI is advancing and having a Yahoo post get 1000 pro Obama "comments" wouldn't be hard.

Edit: held my nose and fought for about 10 min on obviously erroneous and stupid comments. It's funny, all of the "top comments" had like 100-400 "likes" but all of the pro dem responses had zero "likes". The responses by Trump folks had 2-5 "likes". It's a bot program. It's coming.

Answered one commenter about how GW caused the great recession and I chimed in about the Clinton backed repeal of Glass-Steagall. Stopped right there. Too tiring to fight a program on a dying website. You beat them by taking your money away. My wife wants to see "Miss Sloane" which is clearly anti gun Hollywood shit propaganda. I told her I won't watch it in the theater. 1) because I would destroy their horseshit narrative 2) I'll drop a buck on redbox if they're lucky.

The propaganda will ratchet up. You watch. Trump needs to totally drop them, have a YouTube channel controlled by him and do a fireside chat on his own terms that they have to watch when we all get to see it.

They need to be destroyed.