Boeing's nearly $14 billion contract to sell Singapore Airlines 39 planes is clearly a major deal. But is President Donald Trump right that 70,000 or so U.S. jobs will flow from the contract? Depends on how you look at it.
Boeing says the order will "sustain" more than 70,000 direct and indirect U.S. jobs for the company, its suppliers and others. The company did not say they were new jobs.
Trump witnessed a "certificate of purchase" signing at the White House this week by Boeing and Singapore Airlines executives. "In terms of the orders it's about $13.8 billion and most importantly it's about 70,000 jobs," Trump said, patting Boeing's Kevin McAllister on the back. "So those are all jobs in this country."
The president correctly cited the value of the order for 39 airplanes, but it's unlikely to yield $13.8 billion.
Boeing says the contract is worth that much at "current list prices." But airlines routinely receive deep discounts from the list price of planes. Boeing declined to provide financial terms of the order.
Boeing arrived at the job estimate by using a Commerce Department formula that supposes every $1 billion in U.S. exports supports 5,200 U.S. jobs, said Boeing spokesman Dan Curran.
The Boeing calculation is based on the list price of the planes, while Singapore Airlines probably is paying far less. "It's definitely an imperfect formula," Curran said. He called the 70,000-job figure the best estimate that doesn't involve Boeing disclosing confidential information.
The company also notes that the announcement was an order "previously attributed to an unidentified customer," meaning it happened earlier.
Singapore Airlines announced Feb. 9 that it signed a letter of intent to order the 39 planes from a U.S. manufacturer. Boeing booked the order in June but did not identify the buyer until this week. Boeing and competitor Airbus sometimes let airlines announce such orders first.
The announcement of major aircraft orders usually follows lengthy negotiations. So the Boeing order primarily came together while Barack Obama was president. It was announced less than three weeks after Trump was sworn in. It's unlikely any president had much to do with it.
The order is for 20 777-9s and 19 787-10s, with an option for Singapore Airlines to buy six more of each type.