Shares of stock in aircraft manufacturer Boeing fell nearly $2 a share before markets opened on Tuesday.
The reason? A tweet from the president-elect.
Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!
— Donald J. Trump (@realDonaldTrump) December 6, 2016
Were Boeing to lose a $4 billion contract, that would certainly cause people to be skeptical of future earnings. But this, as seems always to be the case with Donald Trump tweets, is not the full story.
As our Christian Davenport reports, the contract with Boeing is currently $170 million. The government’s plan to replace Air Force One actually involves two different planes which would serve future presidents for years to come. Boeing won the contract in 2015; the new planes are expected to be operational in about a decade. The $170 million isn’t for manufacturing, after all. It’s for Boeing’s work “determin[ing] the capabilities” of the planes they will eventually produce.
It was natural to wonder, given the apparently unprompted nature of Trump’s tweet, if part of his comment was meant to suggest he would prefer to use his existing aircraft for the job of the presidency. His campaign spent $6.7 million on his personal aircraft after he announced his candidacy, and he has called Air Force One “a step down” from his personal aircraft “in every way.” (Not size, mind you.) Once Trump received a Secret Service detail, the agency paid $1.6 million for its agents to travel with him — money that went to TAG Air, a company owned by Trump.
Trump’s current plane is also a Boeing.
The Air Force wouldn’t let Trump keep using his plane as president, though, unless it were significantly upgraded. As CNN reported earlier this month, Trump’s personal plane would need to be upgraded with critical functionality to serve as his official aircraft. That includes missile detection and avoidance systems, electromagnetic shielding, mid-air refueling mechanisms and confidential communications systems. The cost of those upgrades would be up to Trump.
As it turns out, though, the Trump tweet may not have been unprompted. CNN’s Jake Tapper noted on Twitter that shortly before the tweet (which was posted at 8:52 a.m. Eastern) the Chicago Tribune posted an interview with the company’s CEO, Dennis Muilenberg.
“Anyone who paid attention to the recent campaigns and the election results realizes that one of the overarching themes was apprehension about free and fair trade,” Muilenberg told the Tribune’s Robert Reed. Fair trade has helped Boeing, which prides itself on being America’s largest manufacturing exporter.
“Last year, we delivered 495 737s from our factory in Renton, Wash., to customers around the world,” Muilenberg continued, noting that a third of the planes were sent to China. “This phenomenon would have been unimaginable when I started at the company in 1985.”
Those are pointed comments. It was Trump, of course, who robustly criticized free trade during the general election. And it is Trump who, this week, seemed to threaten a trade war with China.
That story has a dateline of 7:30 Central time — 8:30 Eastern. Trump’s tweet came out a few minutes later.
We don’t know that Trump was responding to the Tribune story. We do know that the last time he tweeted an out-of-the-blue opinion, about flag-burning, it was immediately after a Fox News segment showing students burning flags.
We also know that Trump’s tweet tanked Boeing’s stock price, albeit only briefly. In 2013, Trump tweeted about having just bought stock in Boeing (“great company!”), but his spokesman said on Tuesday that the president-elect no longer holds stock in Boeing, or anything else, having sold it all in June.
The fluctuations in Boeing’s stock price that may have stemmed from Trump’s annoyance at a news article criticizing his policies in the lightest of terms, then, only affected other people.