Boeing is making changes and cuts necessary in a new business climate as analysts and President Donald Trump continue to talk up the renowned aerospace company despite its recent challenges.
The latest report on Boeing (DJIA: BA), which ran in the Washington Post on Saturday, indicated that the company tried to change elements of a NASA contract proposal after being contacted by an official at the space agency. (Disclosure: The Washington Post is owned by Jeff Bezos, founder of private aerospace contractor Blue Origin).
The changes to the proposal alarmed those in the agency who were worried Boeing was using inside information, and ultimately led to the resignation of Doug Loverro, associate administrator of NASA’s human spaceflight directorate. Read more here.
Boeing has had great success with the X-37 program, but is still reeling from crashes of its Max 737 planes and a failed test flight last December with its Starliner space capsule. It has trimmed budgets and thousands of jobs, and as a result, analysts have been bullish, as is President Trump.
“Boeing’s coming back ... the best company in the world,” Trump said said during a rally in Oklahoma on Saturday. His comments came during a segment of his speech when he discussed the negotiations that led to the purchase of two new Air Force 1 jets last February. The Air Force 1 jets have a 30-year history of service.
“I’m not paying $5 billion and I’m not paying $4.6 billion,” Trump recalled of his negotiations. “‘It has to have a ‘3’ on the front of it.’ That’s a hell of a lot of money too but it is a rather complex situation. They said ‘No way.’
“(Boeing) made up one quarter of a point of our GDP … and they made a plane and did some foolish things and a terrible thing happened and all of a sudden they’ve gone through hell but they’re coming back and we’re ready to help them if they need it.”
Trump said he would have called off the deal for the Air Force 1 jets with Boeing except the cancellation fee was $250 million.
Time went by, Trump said, but the company came back with an offer of $3.9 billion.
Meanwhile the Dow Jones aerospace giant has a buy rating despite the Securities and Exchange Commission allegedly investigating the company related to its financial disclosures related to the Max 737 grounding.