Go Nakamura/Getty Images
- Boeing lost $766 million in Q3 on the project to build Air Force One aircraft.
- It increases Boeing's total losses on the two jets to $1.9 billion since the build began.
- Boeing bears the cost of any delays under a deal struck with the Trump administration.
Boeing lost $766 million during the third quarter of this year on the project to build two planes that will serve as the next Air Force One, the company said in its latest earnings report.
The figure takes the company's losses for the project to $1.9 billion since it began.
"Supply chain, inflation, labor shortages, macroeconomic challenges are challenging for everybody," Dave Calhoun, CEO of the US plane maker, said during the call to discuss its earnings, blaming the issues for losses across multiple of the company's fixed-price defense projects.
Boeing is liable for the cost of any overruns in the project under a deal struck with the White House to produce the two VC-25Bs in 2018. The then President Donald Trump played a personal role in the negotiations to agree on the fixed-price deal.
Calhoun said in a quarterly earnings call in April this year, that the "unique" agreement exposed the company to "a very unique set of risks that Boeing probably shouldn't have taken." At the time Boeing said it had lost a total of $1.14 billion, including a further $660 million in the first quarter, on the planes, per an SEC filing.
Boeing did not immediately respond to Insider's request for further comment.
The company has stated in SEC filings that the project is worth $4.3 billion.
The Trump administration publically stated the total cost of the project would be around $3.9 billion. However, DefenseOne estimates that the total costs could be above $5.3 billion, citing Air Force officials and Pentagon budget documents.
The first of the new jets, which are not being built from scratch, but from two repurposed jetliners, was originally scheduled to enter service in 2024.
However, in June, a report by the US government accountability office warned that labor shortages, as well as delays caused by interior work on the planes, could push back the delivery of the two jets. The program is up to three years behind schedule, per Reuters.
On Wednesday's call, Brian West, Boeing's chief financial officer, said that labor stability had been "magnified" on the Air Force One project and another project to build KC-46A Tankers due to the fact that workers need security clearances.
"We can hire. It's getting the workforce trained and up to speed that we had to account for in this particular period," West said.
from Business Insider https://ift.tt/9zScwNU
No comments:
Post a Comment