This Is What Happens When Donald Trump Tweets About Your Company

December 6th 2016

Mike Rothschild

On Tuesday morning, President-elect Donald Trump made his feelings known about the U.S. government's deal with Boeing to produce a new generation of Air Force One.

His verdict: it's bad.

The moment Trump sent his tweet, the company's stock plunged by $2 per share a drop that wiped at least a billion dollars off its valuation. The fall seemed to be short-lived, the stock later rallying, but it's a testament to the power of Trump's bully pulpit. One tweet can temporarily tank a company he has problems with.

In the world of procurement, the $4 billion that Trump alleges was being spent on the new Air Force One is a pittance compared to the money to be had from military spending, which the U.S. leads the world in.

Want to see an expensive plane? The F-35 Joint Strike Fighter program is set to cost $1.5 trillion for about 2,400 stealth fighters. Trump has tried to have it both ways. In 2015, he said of the F-35: "I do hear that it’s not very good. I’m hearing that our existing planes are better." At the same time, he's savaged the "existing planes" of the military, complaining that they fly with parts salvaged from disposal yards.

Trump has also pledged to drastically increase the number of combat-ready fighter planes in the Air Force, which almost certainly means those F-35s. In scuttling the new Air Force One, Trump is saying he'll cut a relative minor but eye-catching expense while pouring even more money into the most expensive weapon of all time.

And while the military says it needs the new fighter, the White House also needs the new Air Force One. The new planes wouldn't come on line until the early 2020s, but they're so specialized that the contract to build them was awarded years earlier. They're coming with the high-end enhancements needed to fulfill the plane's function as a flying military command center that can direct a nuclear war  and never be shot down.

Incidentally, Trump has balked at using the current Air Force One himself, saying it's "a step down" from the plane he owns. Upgrades to allow it to function as a command center would have to be paid for by Trump himself.

As with Trump's early-morning tweet about flag burning, seemingly sent at random, it's useful to ask why the president-elect made this statement at the time he did. The Boeing tweet was sent less than an hour after the Chicago Tribute published an article featuring an interview with the CEO of Boeingm, who was mildly critical of Trump's seeming desire for a trade war with China.

So did the president-elect of the United States attack an American corporation, and threaten to pull a government contract, as revenge for criticism?

At this point, the tweet is the only statement Trump has made about Boeing. Whether he meant it as an act of revenge, a threat, or as a transparent attempt to look like he's committed to cutting government waste that's unknown.

If Trump does cancel the new Air Force One, he'd be following in the footsteps of President Obama, who, in 2009, asked the Department of Defense to review the costs of the new fleet of Marine One helicopters future presidents would use. This action, done with little fanfare, resulted in a new contract being awarded at a savings of $10 billion to taxpayers.