BA Boeing Co

By Damian Paletta and Doug Cameron 

President-elect Donald Trump on Tuesday suggested the U.S. government should cancel an order with Boeing Co. for a new version of Air Force One, making the aircraft maker the latest company to come under scrutiny by the incoming commander-in-chief.

In a Twitter post Tuesday, Mr. Trump said the cost for a new "Air Force One" plane for future presidents was "more than $4 billion. Cancel order!"

Representatives for Boeing and the Pentagon couldn't immediately be reached for comment.

The $4 billion price tag Mr. Trump referenced for the cost of the new aircraft couldn't be immediately confirmed.

Boeing hasn't secured deals to build the planes that would replace the current aircraft used as Air Force One, which have been in flight since the Reagan administration. The two heavily modified 747-200 planes used by the president are due to reach the end of their planned 30-year life in 2017.

In January, Boeing secured a contract from the Pentagon to start development work on the 747-8 jumbo jets that would replace the aging planes. The deal includes modifications to the aircraft, from sophisticated communications equipment to other upgrades such as antimissile devices, experts said. The development contracts were worth about $200 million.

"The plane is totally out of control," Mr. Trump said in brief remarks in the lobby of Trump Tower in New York City.

"I think its ridiculous," he said. "I think Boeing is doing a little bit of a number. We want Boeing to make a lot of money but not that much money."

The Air Force earmarked $1.65 billion between 2015 and 2019 for two replacement jets, but hasn't detailed the expected cost or delivery dates for the replacement planes. The Air Force had previously said it was looking to introduce the planes in 2021.

There are specific rules about how the U.S. negotiates with federal contractors, but Boeing relies on U.S. government business for sizable sales. The Pentagon generated sales of $18.8 billion for Boeing's defense arm in 2015, according to its annual report. This excludes foreign sales brokered by the defense department. Boeing was the U.S. government's second biggest federal contractor last year behind Lockheed Martin Corp., according to federal procurement data.

The Pentagon said that while Boeing was the sole bidder to build the planes, other companies would be able to compete for maintenance and upgrade work.

Boeing shares were 0.8% lower in early trading.

This is the first time since becoming president-elect that Mr. Trump has singled out a particular government contractor in a procurement deal. If the U.S. were to walk away from the Boeing deal, the only other manufacturer that makes large planes capable of such international flights is Airbus Group SE. Boeing and Airbus frequently compete against each other for large contracts around the world.

Boeing's 747-8 carries a list price of $378 million and uses General Electric Co. engines.

Last week, Mr. Trump appointed Jim McNerney, a former Boeing chief executive, to be on a new board of executive advisers he plans to meet with to discuss economic, regulatory, and labor issues.

Mr. Trump has used Twitter extensively throughout his presidential campaign and following the election. Tuesday's tweet is his latest rebuke to a major U.S. company. Mr. Trump has also used Twitter to hit Ford Motor Co. and United Technologies Corp.'s Carrier unit for plans to move production overseas.

--Joshua Jamerson contributed to this article.

Write to Damian Paletta at damian.paletta@wsj.com and Doug Cameron at doug.cameron@wsj.com

(END) Dow Jones Newswires

December 06, 2016 11:01 ET (16:01 GMT)

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