Trump shows Boeing the Art of the Deal
In his seminal 1987 book Art of the Deal, Donald Trump outlined how he negotiated the purchase of a 727 from Diamond Shamrock, a Texan oil company. Yesterday, the President Elect demonstrated how to do it using Twitter.
At 1.52pm yesterday Boeing’s share price was $152.16. Then Trump tweeted:
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
Minutes later Boeing stock was at $149.75 (it later rose to $1.51).
Some political observers say the Tweet was a response to a Chicago Tribune article that suggested that Dennis Muilenburg, Boeing’s CEO, is concerned about Trump’s views on globalisation – and his recent call with Taiwan’s prime minister.
Boeing issued a statement saying: “We are currently under contract for $170 million to help determine the capabilities of these complex military aircraft that serve the unique requirements of the President of the United States. We look forward to working with the US Air Force on subsequent phases of the program allowing us to deliver the best planes for the President at the best value for the American taxpayer.”
Trump was presumably referencing a Government Accountability Office estimate of $3.2 billion for two 747-8s. This clearly is not just for the aircraft but includes US Air Force consultancy and added extras like military radar, missile systems, an operating theatre and ejector seats.
Observers are concerned that the President elect is using Twitter to conduct business. Perhaps everyone else is just behind the times.
Buying aircraft could be so much more entertaining if all Boeing Business Jet or Airbus Corporate Jet buyers negotiated with aircraft manufacturers live on Twitter rather than going through formal requests for proposals and private meetings.
But you need to be accurate. To paraphrase Virgil, we should all: beware of Tweets bearing gaffes.
Subscribe to our free newsletter
For more opinions from Corporate Jet Investor, subscribe to our One Minute Week newsletter.