Boeing [BA] CEO Dennis Muilenburg said on Tuesday following a meeting with President-elect Donald Trump that progress is being made on lowering planned costs for the Air Force One presidential plane, one of two defense programs that Trump has highlighted as being over cost.
The other program is the F-35 fighter, which is completing development by prime contractor Lockheed Martin [LMT] and is in low rate production. Lockheed Martin CEO Marillyn Hewson, who met with Trump last Friday in New York, said following their meeting that the company is close to agreeing to a new contract on the Lot 10 low-rate initial production contract for the F-35 and that the deal would reduce the price for the next 90 aircraft “significantly.”
The Pentagon and Lockheed Martin already have plans to bring down costs of the F-35 and Lockheed Martin didn’t say whether the Lot 10 contract would be lower than it previously expected.
Muilenburg, speaking on CNBC following his meeting with Trump in New York, said “We made great progress on simplifying requirements for Air Force One, streamlining the process, streamlining certification by using commercial practices; all that is going to provide a better airplane at a lower cost.”
Boeing is currently working under a $170 million development contract for Air Force One, formally known as Presidential Aircraft Recapitalization, which is equipped with a sophisticated communications suite to enable presidents to carry out their duties while flying or during an emergency. Muilenburg, in December, following a pre-Christmas meeting with Trump in Florida, promised to build the two Air Force One jets for less than the $4 billion the president-elect referenced in earlier comments on his Twitter feed.
The Air Force was present at the meeting in December but not at the Jan. 17 meeting between Trump and Muilenburg. An Air Force spokesman on Tuesday said in response to a query from Defense Daily that, “At this time, the Air Force has not received new requirements for the Presidential Aircraft Recapitalization program.”
The current Air Force One fleet is based on Boeing’s 747-200 plane and the new fleet is based on the 747-8 variant.
Muilenburg also said that progress was also made on “fighters” in his meeting with Trump, adding that “we were able to talk about options for the country and capabilities that will again provide the best capability for our warfighters most affordably.”
The comment about fighters stems from Trump’s request following the December meeting for Boeing to price out potential alternatives to the F-35 using Boeing’s F/A-18E/F Super Hornet multirole fighter, of which the Navy has acquired hundreds of the aircraft dating back well over a decade. The F/A-18 is a fourth-generation fighter and has some low observable characteristics but the F-35 is a fifth-generation fighter with advanced capabilities and modern stealth features.
Pentagon officials have said there is no comparison between the capabilities of the F-35 and the F/A-18.
Muilenburg on Twitter praised Trump, saying he’s “doing a great job of engaging business. We’re all on the same page here. Our objective is to provide the best capability for our country most affordably.” He also said the aerospace industry is a jobs creator in the United States.
Boeing said it had no comments beyond Muilenburg’s statements on Tuesday. The company next Wednesday is scheduled to report its fourth quarter earnings results. Financial analysts on the call are likely to ask Muilenburg about his conversations with Trump.