US president-elect Donald Trump extracted a promise from Boeing’s chief executive that the cost of replacing Air Force One would not exceed $4bn, his latest move to use the bully pulpit to pressure companies to help advance his economic agenda.
Trump met with Dennis Muilenburg of Boeing and Marillyn Hewson, chief executive of Lockheed Martin Corporation – two defence companies he has made an example of since his November 8 election, sending defence shares tumbling with his complaints about projects he said are too expensive.
He paraded the two CEOs in front of the cameras at the ornate front door of his Mar-a-Lago resort in Palm Beach, Florida, where he is spending Christmas.
“Trying to get the costs down, costs. Primarily the (Lockheed Martin) F-35, we’re trying to get the cost down. It’s a programme that’s very, very expensive,” Trump told reporters after meeting with the CEOs and a dozen Pentagon officials involved with defence acquisition programmes who he said were “good negotiators.”
Trump, who takes office on January 20, has vowed to address government procurement costs as part of his industrial policy, which also includes taking a hard line on Chinese trade practices and renegotiating multilateral trade deals.
Trump also named economist Peter Navarro, an economist who has urged a hard line on China, to head up his White House team on industrial policy.
He also appointed billionaire investor Carl Icahn as a special adviser on regulatory issues, and said Icahn would help him choose the next chairman of the Securities and Exchange Commission.
Muilenburg, whose company was caught off guard by Trump’s broadside earlier this month on the costs for replacing ageing Air Force One planes, called his meeting “productive” and spoke admiringly of Trump’s “business head-set.”
Trump has said Boeing’s costs to build replacements for Air Force One aircraft – one of the most visible symbols of the US presidency – are too high and urged the federal government in a tweet to “Cancel order!”
“I think we’re looking to cut a tremendous amount of money off the price,” Trump said.
The Boeing 747-8s are designed to be an airborne White House able to fly in worst-case security scenarios, such as nuclear war, and are modified with military avionics, advanced communications and a self-defence system.
The company is currently under contract for $170mn to help develop plans for the planes.
Trump has said the planes, which are in the early stages of development and are not expected to be ready until 2024, would cost more than $4bn.
“We’re going to get it done for less than that, and we’re committed to working together to make sure that happens,” Muilenburg said, telling reporters he gave Trump a “personal commitment” that costs would not run out of control.
Trump has publicly pushed other corporations to change tack, taking credit for forcing United Technologies and Ford Motor Co to alter plans to outsource jobs abroad. Ford, however, said it had no plans to close any US plants.
Asked whether he had secured concessions from Lockheed Martin on its F-35 fighter jet programme, which he has complained was “out of control,” Trump said it was too soon to know.
Lockheed Martin CEO Hewson, who left Mar-a-Lago without speaking to reporters, said in a statement that her meeting was “productive” and gave her the opportunity to talk about progress in cutting costs.
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