Shares of Boeing dropped nearly $2 on Tuesday after Donald Trump tweeted that its contract for two Air Force One jets should be canceled due to “out of control” costs.
Trump later told reporters in the lobby of Trump Tower, “I think Boeing is doing a little bit of a number. We want Boeing to make a lot of money, but not that much money.”
The president-elect hammered the aircraft manufacturer for wanting to charge more than $4 billion for the project. Because the program is still in the early stages, Boeing’s only existing government contract is for $170 million, which covers the planning for at least two new Air Force One jets using the 747-8 airframe.
Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!— Donald J. Trump (@realDonaldTrump) December 6, 2016
“We are currently under contract for $170 million to help determine the capabilities of these complex military aircraft that serves the unique requirements of the president of the United States,” Boeing said in a statement.
The exact cost of the project has yet to be determined, but the Air Force has budgeted $2.7 billion through 2021. It said in a statement that it expects “this number to change as the program matures with the completion of risk reduction activities.”
Following the outburst on Twitter, Boeing CEO Dennis Muilenburg called Trump. Boeing said in a statement that it would work closely with the Air Force to “deliver the best planes for the President at the best value for the American taxpayer.”
After his conversation with Muilenburg, Trump somewhat changed his stance. On NBC’s Today Show Wednesday morning, he said, “We’re going to work it out.” He added, however, that if he couldn’t negotiate the price he wanted, he would still cancel the order.
“That’s what I’m here for,” he said. “I’m going to negotiate prices. Planes are too expensive. We’re going to get the prices down. If we don’t get the prices down, we’re not going to order them. We’ll stay with what we have.”
Trump has been known to be a hard negotiator in the purchase of his own private aircraft over the years.
The current Air Force One 747s entered service in 1990 and are nearing the end of their proposed lives. If all continues as planned, Boeing’s 747-8s commissioned for Air Force One are expected to enter service in the mid-2020s.