If Boeing Co (NYS:BA) CEO Dave Calhoun could hop a ride in a time machine, he’d travel back to 2018 to halt the $3.9 billion contract his company signed with the Trump administration to build two new Air Force One aircraft.
What Happened: In today’s quarterly earnings call discussing the company's Q1 results, Calhoun lamented over the deal struck under the chief executive leadership of Dennis Muilenburg that, based on Trump's demand for a fixed-price agreement, put the onus of cost overruns directly on Boeing and not the federal government. The contract called for Boeing to transform two 747 airlines into the distinctive aircraft requirements needed for presidential transportation.
The results of that agreement, Calhoun acknowledged, were $660 million in cost overruns during the first quarter of this year, which the company blamed on problems with a subcontractor and supply chain disruptions and rising costs as the project progressed.
“Air Force One I'm just going to call a very unique moment, a very unique negotiation, a very unique set of risks that Boeing probably shouldn't have taken,” said Calhoun, who did not mention Trump by name. “But we are where we are, and we're going to deliver great airplanes.”
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Why It Matters: Boeing’s $13.99 billion in first quarter revenue was down from the $15.22 billion recorded one year ago. The company reported a quarterly earnings loss of $2.75 per share, which was down from a loss of $1.53 per share in the first quarter of 2021.
Nonetheless, Calhoun said he was looking ahead to a more profitable near-future.
"Despite the pressures on our defense and commercial development programs, we remain on track to generate positive cash flow for 2022," he stated.
Photo: Trump White House (Archived) / Flickr Creative Commons
