Air Force One Contractor Files For Bankruptcy

Earlier this month, Boeing filed a lawsuit against major aircraft modification specialist GDC Technics and canceled the firm’s contracts for the Air Force One program. On the back of this move, GDC countersued Boeing. Now, in another twist, the Fort Worth-based business is filing for Chapter 11 protection.

Air Force One
The first aircraft to replace the current Air Force One was planned for a 2024 delivery, but could the current dispute cause notable delays? Photo: Getty Images

Operational concerns

Boeing has been assigned to design and manufacture the next pair of planes that will serve the United States President. It has been three years since a $3.9 billion contract was agreed to convert the 747-8s to replace the present modified 747-200s in action. To help with the interiors of the executive aircraft, the planemaker subcontracted GDC.

In a twist of events, on April 7th, Boeing canceled the related contracts and sued GDC amid claims that the Texan outfit was 12 months behind schedule. Boeing shared that it ultimately had no choice due to the alleged failure of meeting obligations.

Air Force One
Boeing VC-25, which currently serves as Air Force One, first entered service in 1990.  Photo: Getty Images

Stay informed: Sign up for our daily and weekly aviation news digests.

A swift reply

However, GDC soon hit back and expressed that Boeing was making it a scapegoat. It alleges that the aircraft manufacturer had been mismanaging the program, which has caused delays. Notably, there could be over 200 employees laid off after the contract cancellation.

According to The Wall Street Journal, GDC said the following in the lawsuit.

“GDC’s financial stress resulted from Boeing holding up in excess of $20 million in payments that should be paid to GDC from Boeing for changes directed by Boeing and performance under the subcontracts.”

GDC Technics handles modifications and completions of commercial, VIP/VVIP, head of state, and military aircraft all across the globe. It has experience with both narrowbody and business planes. It even recently worked on another Boeing-related government project, relating to the completion of a pair of 777-3000ERs for India.

Despite having a presence across the aviation spectrum, a grand job such as the Air Force One program would have been a prime focus for the company over the next few years. So, it’s natural that there would be plenty lost following the cancellation of the contract.

Lufthansa 747-8
The 747-8 is the final model in the long-lasting 747 family. Photo: Getty Images

There is still hope

Regardless of the present difficulties, GDC’s leadership remains determined to come back from the current struggles. The company’s parent, Oriole Capital Group, plans to remain in service while it sorts out the financial challenges. It also looks to emerge strongly for a bright future

Boeing told Simple Flying that the manufacturer is making steady progress on the Air Force One program. It is also working closely with the Air Force on updating the schedule of the project.

A Boeing spokesperson shared the following:

Boeing is working to mitigate any impact to these programs as well as to any of the sub-tier suppliers. We have been working with several small businesses that are key sub-tier suppliers to GDC Technics, and are engaging with all 52 small business sub tiers that contribute to these Boeing programs, in the immediate future.

“Additionally, we are coordinating closely with our customers. GDC Technics’ work statement will be moved to new qualified suppliers and/or performed in house by Boeing. No decisions have been made at this time.

The next Air Force One role will still be taken on by the Queen of the Skies. The 747-8 hasn’t been considerably popular in the commercial passenger realm, but it’s still warming to see that the jumbo will hold such an important position in the next chapter of presidential transport.

Amid the saga with GDC, perhaps another executive travel specialist will need to take on the interiors. Undoubtedly, the likes of Comlux will be keeping a close eye on the situation.

What are your thoughts about this situation with Boeing and GDC Technics? How do you see the situation panning out? Let us know what you think in the comment section.

61 Shares: