Boeing’s disastrous inability to refurbish two 747s for Air Force One has now cost the company over $3 billion
In 2018 Boeing won a $3.8 billion fixed price contract to refurbish two of its own 747 airplanes to replace the old 747 that was presently doing the job as Air Force One. The new planes were supposed to be delivered by 2024.
Almost a decade later Boeing has still not delivered those planes, and it appears it won’t be able to deliver before 2027, at the earliest. Even worse for Boeing, these delays and the company’s inability to get the planes finished has now cost the company over $3 billion.
Boeing announced in its Q2 financial statement on Tuesday that the Air Force One program will cost an additional $280 million. The program is now $3.1 billion over budget. Unlike the Qatari jet, Boeing is footing the bill for cost overruns, not the taxpayer.
Trump negotiated with Boeing during his first term to replace the aging Boeing VC-25A. The $3.9 billion deal signed in 2018 was a gamble for Boeing, because the aerospace giant agreed to a fixed cost. Boeing struggled to deliver the pair of VC-25Bs because of design changes, production issues and staffing problems. According to CNN, last quarter’s $280 million increase was for a “ramp-up in production and certification resources.” While the Department of Defense doesn’t have to deal with the added cost, the delayed delivery wasn’t a non-issue.
Meanwhile, there are rumors Boeing and NASA are negotiating an unmanned cargo flight of Starliner to ISS before the end of the year. I have doubts, because Boeing also says it will not foot the bill for this flight, while NASA under Isaacman has had second thoughts about paying Boeing for this third unmanned demo mission (plus one manned demo flight) to get Starliner certified for manned operational flights.
As with its Air Force One contract, Boeing’s NASA contract for Starliner was fixed price, and as with Air Force One, Boeing was entirely incapable of working under such conditions. The company had become spoiled by cost-plus contracts, which are essentially a blank check, and simply doesn’t know how to meet a budget, or schedule.
Even if NASA acquiesces and pays for another unmanned Starliner mission, do not expect Boeing to win any other contracts with the agency. Since 2020 NASA has said it would no longer consider any bids from Boeing because of its terrible track record. Nothing has happened since to change that determination.
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Properly managing fixed price contracts seems to elude Boeing management. They got 2X what SpaceX got for Crew Dragon. Even SpaceX was late, and probably ended up spending a bit of their own money to get the initial flight going, but overall they succeeded. Admittedly working with government contracts can be hard as requirements are often set in jell-o and change orders can be constant. That said unless Boeing had idiots negotiating the contract there should have been some strong clauses about change orders and requirements should have been pinned down hard early in the Design Reviews. The McDonnell Douglas/Boeing merger was well into the past (like 20 years) so management should have been sorted out by then. Clearly it wasn’t.
Clearly, something has to happen here. Boeing once owned the skies commercially and is currently the only US maker of large commercial transportation aircraft. It also is one of 3 military aircraft makers although Northrup (B-21) and Lockheed (f-35) seem to have had most of the recent luck with Boeing having only the KC-46 (late) and some specialty 737/767 variants like P-8 (although those are mostly delivered) . At some point, the shareholders are going to wonder why Boeing is getting beat up hard across almost all of its businesses.
There are times when one might wonder if the Keystone Kops are running the company now.
I’m not sure how hard that policy actually is. But it is likely a moot point anyway, unless Boeing’s space division radically turns around the quality of its work. Their proposal for the Human Landing System in 2019 was so bad it did not even make the cut for the first round of initial design awards. That’s a fact that should shock us. Until recently, Boeing crashing out of the initial selection round of a NASA program like this would have been unthinkable.
So, I, too, have little confidence that Starliner is going to fly this year. Yet, strangely, the evidence clearly points to them really making the effort to keep working on it. I’m curious why they haven’t just given up on it, unless there’s government pressure on them to keep going.
It was Boeing’s horrible proposal for the manned lunar lander that prompted NASA’s decision to no longer consider Boeing bids. See: https://behindtheblack.com/behind-the-black/points-of-information/boeings-fall-from-grace-at-nasa/
Indeed I can’t see why Boeing hasn’t just written Starliner off. Even IF they get a cargo Starliner run in this year and can convince NASA for attempt 2 on a manned Starliner (and I think the odds for that are somewhere between Slim and None with Mr. Isaacman at the head of NASA) they have at most 5 years to provide passenger service to the ISS. On top of that their only certified lift vehicle is the Atlas V which except for those being held for Starliner, is extinct. I bet ULA would LOVE to sell the remaining Atlas V rockets to the highest bidder and would provide cash compensation to Boeing to get out of the Starliner deal. The only reason I can think Boeing is hanging on is that if they write off Starliner, they essentially admit Boeing is NOT in the space business anymore. Either that or they took advances on the payouts in the Biden days for things they had NOT quite completed and are on the hook for that contractually. That would be VERY unusual; it would be highly irregular to pay out milestone money without clear completion of the milestones. But Biden administration and highly irregular seem to go hand in hand.
Note that even if Starliner launches and gets certified, Boeing won’t get many commercial flights to ISS. NASA has already signed SpaceX’s Dragons on for almost all flights through 2030, when ISS is supposed to be retired.
There is pathetic and then there is Boeing pathetic.
Lockheed Martin is still producing C-130Js and F-16s in addition to the F-35.
And I think Boeing (via Mcdonnell/Douglas) still has various F-15 contracts, But for recent contracts for new hardware, Northrop and Lockheed have been the winners. The F-35 is like the F=16 selling all over NATO and other related buyers. Northrop’s B-21 raider is US only but looks to be a fair number of items as the B-2 and B-1 need replacing (the B52 soldiers on towards its second century with the engine upgrades). The B-21 contract actually appears to have been on time and on cost or even a bit under.
Now the older 747 is all metal, right?
Wasn’t there more composite garbage in the newer one?
Composites are good for flaps and such….but I would not trust it in other areas.
The sailplane industry has been successfully manufacturing composite aircraft for over 60 years. First glass fiber, then carbon with some Kevlar. The first ones are still airworthy. Yes, the whole structure, not just peripherals.
Composites have been used all throughout aircraft for decades. Just saying something is composite doesn’t tell you enough to make a good judgment on it–what kind of composite is it (hybrid? aramid? carbon fiber? glass fiber?)? Where is it used? What loads, forces, etc. is it expected to handle? You wouldn’t trust it–I would say that’s because of your ignorance, rather than because composites are inherently flawed. Whether or not a material is trustworthy isn’t dependent on feelings, but on what goals a designer is trying to achieve.
”The F-35 is like the F=16 selling all over NATO and other related buyers.”
And Boeing is doing the same with the F-15 Eagle, AH-64 Apache, V-22 Osprey, CH-47 Chinook, JDAM, SDB, and until recently, the F/A-18 Super Hornet, EA-18 Growler, and C-17 Globemaster.
”But for recent contracts for new hardware, Northrop and Lockheed have been the winners.”
For some recent contracts. For others, Boeing has won the F-47 6th-generation fighter, the T-7 Red Hawk, the MQ-25 Stingray, and the MQ-28 Ghost Bat.