WASHINGTON — President Donald Trump has reached an informal deal with Boeing to provide the next generation of presidential aircraft, the White House says.
Deputy press secretary Hogan Gidley said Tuesday that the president negotiated a $3.9 billion “fixed-price contract” for the new planes, known as Air Force One when the president is on board. It follows years of negotiations between Boeing and the U.S. Air Force — and Trump’s personal intervention since his election.
In December 2016, Trump tweeted that costs for the program were “out of control, more than $4 billion.” He added: “Cancel order!”
The White House now says the original cost estimate was actually over $5 billion for two airplanes. Gidley said the agreement would save taxpayers more than $1.4 billion.
Boeing chief executive Dennis Muilenburg met multiple times with Trump to discuss the Air Force One contract, most recently last week.
Boeing, in a statement, said it is “proud to build the next generation of Air Force One, providing American Presidents with a flying White House at outstanding value to taxpayers.”
“President Trump negotiated a good deal on behalf of the American people,” it said.
The agreement includes the two 747-800 aircraft and the cost of modifying the commercial planes with the equipment needed to support the president, including external stair, large galleys and a secure communications suite. Other modifications include electrical power upgrades and adding a medical facility, an executive space and a self-defense system.
As an example of the unusually high costs associated with Air Force One, the Pentagon announced in December that Boeing was given a $23.7 million contract to design, make and install refrigerators for the president’s planes.
The White House said the deal would put Boeing on the hook for cost overruns. In 2011, Boeing agreed to a $4.9 billion fixed-price contract with the Air Force for a refueling tanker, the KC-46. Through late last year, cost overruns had reached about $2.9 billion in pretax costs.
When the president can fly on the planes will depend on how long the U.S. Air Force wants to test them.
Loren Thompson, a defense analyst at the Lexington Institute, said he thinks Trump got a good deal because Boeing wants good relations with the government, its most important customer.
Boeing sells military planes and NASA rockets to the U.S. government, and it relies on the Export-Import Bank to help finance the sale of commercial jets to airlines around the world.
“Boeing needs him for a lot of much bigger business concerns,” Thompson said. “If Boeing had to take a loss on this to make the president happy, I think they would do it.”
The Chicago-based company was stung — it’s stock even tumbled for a few hours — when then-President-elect Trump tweeted in December 2016 that Boeing’s Air Force One contract should be canceled.
Since then, Thompson said Muilenburg has assiduously courted Trump — “better than anybody.”
Koenig reported from Dallas, Texas. Associated Press writer Jill Colvin contributed to this report.