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Did you know there are actually two Air Force Ones? (Should that be Airs Force One?) It’s true — POTUS gets two planes, and technically Air Force One is designated as whichever jet the president is flying on.
More fun facts: Boeing was due to deliver two new presidential 747s soon, but they are wildly over budget and behind schedule.
- Among other problems, Boeing has had trouble finding enough workers with sufficient security clearance to work on the high-tech military planes, especially when Covid cases caused staffing shortages, my colleague Chris Isidore writes. (Note: Everything I know about Air Force One is sourced to either Chris or Harrison Ford.)
- Boeing also had a dispute with a subcontractor that was working on the jets’ interior. That contractor was replaced, further setting back progress.
- It’s so bad, Boeing’s CEO says even agreeing to build the planes in the first place was a mistake. He told analysts in April that the $3.9 billion deal it inked with the Air Force in 2018 included “a very unique set of risks that Boeing probably shouldn’t have taken.”
- The current Air Force One jets were built in 1990, and they were supposed to be replaced by 2025. Now, Boeing says it may not happen till 2026.
On top of all of that, there’s a new headache: The paint job that former President Donald Trump ordered is a major liability.
Trump didn’t love the AF1 color scheme, with its light blue stripe that’s been there since the Kennedy administration. He wanted a supposedly more patriotic look, with a red, white and blue palette. In case the state-of-art tech and armada of nuclear-attack-resistant support planes didn’t do enough to scream “THIS IS AMERICA.”
But it turns out the darker blue Trump requested could potentially overheat the sophisticated electronics system that ensures POTUS can stay in secure communication with officials on the ground.
The Air Force did not say what the new color scheme would be. And there was no word yet from Trump about how quickly he’d order the military to revert to his design if he’s re-elected…
NUMBER OF THE DAY
$4,000
New York, New York, it’s a helluva town. The rent is up and our wages are down …
Ah, New York City. We love you. We really do. But you don’t make it easy. Rents just a record high in May — the fourth consecutive month of records — as landlords jacked up prices and revoked pandemic-era concessions.
Median rent for an apartment in Manhattan hit $4,000 a month in May, surging 25% from a year ago, according to a report from brokerage firm Douglas Elliman and Miller Samuel Real Estate Appraisers and Consultants.
VALLEY NEWS
The “move fast and break things” ethos in Silicon Valley isn’t aging well. These days it’s more “cut costs and try to survive.”
Here’s the thing: Big Tech has been barreling toward a reckoning for a few years, but 2022 has accelerated the industry’s reality check. Tech stocks are now in their worst rout in a decade, starved of the easy money from the Fed’s pandemic-era stimulus program that fueled those companies’ recent highs. Companies are laying off staff.
As my colleague Catherine Thorbecke writes, investors and industry vets have been sounding the alarm for weeks.
- “The boom times of the last decade are unambiguously over,” venture capital firm Lightspeed said in a blog post.
- “No one can predict how bad the economy will get, but things don’t look good,” tech startup accelerator Y Combinator warned. “The safe move is to plan for the worst.”
- Bill Gurley, a prominent venture capitalist, summed up the shifting mood in a tweet last month seemingly directed at tech startups who may be in denial: “The cost of capital has changed materially, and if you think things are like they were, then you are headed off a cliff like Thelma and Louise.”
Virtually every sector, minus energy and utility stocks, is struggling with high inflation, rising interest rates and general gloominess that has economists and analysts speculating about a recession. But tech — along with other high-risk investments like SPACs and cryptocurrencies — has been hit especially hard.
Even tech giants like Facebook, Amazon, Apple, Netflix and Google (the so-called FAANG stocks) are down by double digits, faring worse than the broader market. It’s enough to remind more seasoned investors of the 2000 Dot-Com Bubble.
“For years, startups generally followed the same playbook, which was grow as fast as possible at whatever the burn rate,” says Matt Kennedy, the senior IPO market strategist at Renaissance Capital, a provider of pre-IPO research and IPO-focused ETFs. “That’s what their investors wanted to see. Capital was cheap, so losses didn’t matter.”
“But that’s changed. Once again, profits matter,” he added.
While many comparisons have been made to the anguish wrought by the burst of the Dot-Com bubble, Catherine explains, the tech sector is far more developed now than it was in the past.
“Large tech companies, even though they’re tightening their belts, are still in a financially advantageous position,” said Dan Wang, an associate professor at Columbia Business School. And unlike 2000, Big Tech’s products are indispensable — consider the phone or laptop you’re reading this on right now.
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