![]() So we just got whacked in a number of different areas. “It has always been a tougher implication, and for the VC-25B, where the clearances are ultra high, it’s really tough. Boeing Chief Executive Officer Dennis Muilenburg was meeting for the second time since the election with President-elect Donald Trump on Tuesday to discuss his company’s contract to build the. “In the defense world, when a COVID line goes down, or a group of workers steps out, we don’t have a whole bunch of cleared people to step into their shoes,” Calhoun said. “But we are where we are, and we’re going to deliver great airplanes.”Ĭalhoun said pandemic-related inefficiencies were largely responsible for the cost overruns it experienced, and that they have been particularly acute for the Air Force One program. That contract represented “a very unique moment, a very unique negotiation, a very unique set of risks that Boeing probably shouldn’t have taken,” Calhoun said. The White House said that represented a dramatic price drop from the original proposal for the cost-plus contract, which it said was valued at $5.3 billion. In July 2018, the Air Force awarded Boeing a $3.9 billion contract for two new Air Force Ones. In December 2016, then-President-elect Donald Trump tweeted “costs are out of control” for the more than $4 billion price tag for the new Air Force One and that he wanted to cancel the order. Despite both programs having higher-than-anticipated development costs, Calhoun said, the military will be flying them both for a long time.īut he expressed regret over the path Boeing took on the new Air Force One during the Trump administration. He added that he expects the MQ-25 Stingray program, a Navy aerial refueling drone for which Boeing won the contract in 2018, will also turn out to be another good bet for the company. Supply chain constraints, complications from the COVID-19 pandemic and inflation complicated ongoing negotiations with suppliers, Boeing said.īoeing’s Securities and Exchange Commission filings also showed a $165 million charge for the KC-46A Pegasus tanker, driven mainly by higher supply chain costs, and a $78 million charge for the MQ-26 Stingray drone, stemming from additional testing requirements from the Navy as well as supplier quality problems.ĭuring the call, Calhoun said Boeing still has high confidence in the T-7′s future and that other programs have weathered similar pressures. The aircraft was originally due for delivery in 2024, but the Wall Street Journal reported earlier this month it could be at least two years behind schedule.Īnother $367 million in charges came from the T-7, the Air Force’s next jet training aircraft. This stemmed from schedule delays, rising supply costs and higher costs to finalize technical requirements. The company is continuing to invest in and keep talking to its suppliers and, to make sure they are able to maintain their staffing levels where its most necessary, he said.The VC-25B Air Force One program saw the largest charge, totaling $660 million. That has included maintaining safety stocks of microelectronics, or stores of extra components that would allow it to weather a supply chain shortfall.Ĭolbert said Boeing has also kept a close eye on the availability of microelectronics and the status of their production process – and sought to manage the expectations of customers about the potential for supply chain snarls. First, about Air Force One - this carries THE PRESIDENT OF THE US (POTUS) and. “We’ve done a lot of partnership with our customers, where we’re sharing data back and forth, and looking at how we fly, where we fly, where we see the threats, and the missions evolving and making sure that we’re getting ahead of that.”īoeing has been working with microelectronics suppliers throughout the pandemic to ensure it has enough components to keep working, Defense CEO Colbert said. Air Force One, while made at the Boeing factory is not made solely by Boeing. “In addition to COVID, the macro environment has been so dynamic,” Pope said. Instead, the company is taking advantage of new digital tools to identify what components it must plan to have on hand in the future, so it can build what its military and other customers will need to have in coming years. COVID showed that no longer works, she said. In the past, Pope said that Boeing used historical long-term trends to plan for what parts and other supplies it would need. “That doesn’t minimize the risk, but it allows us to manage the risk differently.” “The way we provisioned and purchased three years ago is very different than how we do it today,” she said.
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