Boeing finds out new president won't just pay whatever defense contractors want

Not even for Air Force One

American Politics, News | December 7, 2016

Defense contractors were pretty excited when Donald Trump won the election, figuring it was fat and happy time once again for defense spending. And if happy time means the Pentagon will once again be willing to fund what the nation needs for its defense, then there should indeed by plenty of smiles to go around. As for the fat part, defense contractors are used to the idea that cost overruns are no issue with the Pentagon because whatever they order they have to have, and have right away. The cost-is-no-object approach to national security is understandable in a certain sense, but when contractors know they can go hog wild with no consequences . . . well, they're going to go hog wild. Frequently. It doesn't look like Trump intends to play that game, not even with his own aircraft. A standing order with Boeing calls for the development of a new Air Force One, and the word has gotten to Trump that the cost of the plane has risen to as high as $4 billion. Regardless of how much a new Air Force One may be needed, Trump made it clear that he will cancel the contract entirely before he pays that:

As you might expect, Boeing's chief executive quickly fell into line:

Hours after Donald Trump promised to cancel Boeing’s contract to build Air Force One on Tuesday, Boeing chief executive Dennis A. Muilenburg spoke with the president-elect, promising to work with the new administration and to keep the costs of the program down, according to a person with knowledge of the matter.

Of course he did. While the media hyperventilates about Trump pronouncements like these - whether via his Twitter feed or in public statements like this one - anyone who understands negotiations knows that Trump is using the bully pulpit of the presidency to his advantage in working toward better deals with contractors. And the contractors are clearly somewhat taken aback to learn that they have a president who is willing to not only call out spending boondoggles in public, but in some cases name names. And what does it say about the fecklessness of the Obama Administration that they were allowing these cost overruns to occur without doing anything about it? That's why contractors figured they could simply jack their costs as much as they felt like. Because they could. Previous administrations weren't going to do anything about it, both because they wanted to keep their contractors happy and because they probably didn't want anyone getting the idea that federal spending might be out of control.

It is. And contrary to past promises that someone would go hunting for "waste, fraud and abuse" (only to see nothing whatsoever change), Trump is the kind of guy who's seen a lot of the real thing in his business career, and knows how to spot it. He also knows how to make it clear to a contractor that he's the customer, and if the contractor doesn't perform to the customer's satisfaction, it will end up with nothing. We'll get a new Air Force One at a reasonable cost, precisely because Trump is prepared to walk away and not get one at all. That's how you negotiate good deals. It's been awhile since we had a president with both understood this and thought it was worth it to actually make it happen. By the way, if Trump is already renegotiating this deal with Boeing, it appears he's already taken over as our de facto president. Just as well. The old one wasn't accomplishing anything worthwhile.

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