• Boeing’s Air Force One project has fallen years behind schedule and billions of dollars over budget amid continued labor and design hiccups. The Government Accountability Office said in a report this week “ongoing design issues, modification rework, and workforce challenges” are still plaguing the manufacturer. The Trump administration has resorted to procuring a $400 million jet from Qatar to serve as the interim Air Force One.

Boeing is continuing to battle production issues plaguing the jets that will serve as Air Force One, according to the Government Accountability Office (GAO).

The Pentagon told the congressional auditors that “ongoing design issues, modification rework, and workforce challenges slowed the progress toward modifying two Boeing 747-8 aircraft into presidential aircraft,” a report released Wednesday said.

The United States, under President Donald Trump, signed a $3.9 billion contract with Boeing in 2018 to have two planes designed, modified, and tested to serve as Air Force One by 2024, but persistent delays have pushed the project past its delivery date.

In order for the aircraft to meet Air Force One specifications, Boeing needs to heavily modify the jets to meet travel and top-level security needs, which has slowed down the production process considerably. Trump has dropped a requirement for the VC-25B planes to have air-to-air flying capabilities, which would allow them to receive fuel from a tanker aircraft while in flight.

Progress on the aircraft has stalled as a result of issues around decompression and the environmental control system design, and Boeing’s incomplete certification plans and aircraft design have also pushed back the timetable for testing, the GAO said. The aircraft manufacturer has also been unable to keep a steady workforce for the project.

“Boeing still faces challenges hiring and retaining qualified mechanics due to ongoing market conditions, according to VC-25B officials,” the report said. “Program officials said that approval rates for mechanics to acquire necessary clearances remain a workforce limitation.”

Last fall, Boeing announced plans to lay off 10% of its workforce, despite industry-wide talent shortages.

As Boeing tries to push through its scheduling woes, Trump has instead procured a $400 million Boeing 474 from Qatar after threatening in February to find alternatives to the VC-25B project. The gifted Qatari jet has not only raised ethical and security concerns, but it will likely cost taxpayers $1 billion in servicing and updating the jet to Air Force One standards.

The 10-digit chunk of change is on top of the projected development and procurement cost of the two Boeing aircraft, according to GAO, which is nearly $6.2 billion—at least $2 billion more expensive than the cost originally outlined in the contract.

Boeing and the Pentagon did not respond to Fortune’s requests for comment.

Years of delays

Though Trump commissioned Boeing for the new jets during his first term, there’s a good chance the president will likely not fly on the new Air Force One during his administration. In February 2024, Boeing revised its delivery schedule from May 2027 to December 2029, but a Boeing senior official told Reuters in February the program could stretch “years beyond” 2029. 

The issues plaguing Boeing’s production now look similar to the delaying variables from years past. In a June 2022 GAO report, the auditors said Boeing’s aircraft mechanic workforce was limited because of a competitive labor market and that many of the skilled workers needed on the project were unable to get security-clearance approval.

“Employees must meet stringent security requirements to work on the VC-25B program because of its presidential mission,” the report said. “VC-25B officials said that Boeing continues to work with the program office to improve the prescreening process for applicants to ensure timely processing of security clearances.”

Earlier in Trump’s second term, Boeing sought help from Elon Musk, former leader of the Department of Government Efficiency (DOGE). Boeing CEO Kelly Ortberg said at a Barclays conference in February the advisory has helped remove some production bottlenecks. Musk visited Boeing’s San Antonio, Texas, facility in December 2024.

“The president’s clearly not happy with the delivery timing. I think he’s made that well known,” Ortberg said. “And Elon Musk is actually helping us a lot.”

This story was originally featured on Fortune.com

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• Air India flight 171, en route to London from Ahmedabad, India, crashed after takeoff on Thursday, killing more than 200 people. The plane was a Boeing Dreamliner 787-8 jet. Following reports of the crash, Boeing shares toppled about 5%, halting a monthslong stock rally reflecting the aircraft manufacturer’s recovery from years of air-safety scrutiny.

Boeing shares have fallen more than 5% following a deadly crash of an Air India flight on Thursday, which killed more than 200 people.

Air India flight 171 was a Boeing Dreamliner 787-8 jet leaving the Indian city of Ahmedabad en route to London, the airline said. The passenger plane contained 242 individuals, including 230 passengers and 12 crew members. No one is expected to have survived the crash, according to Ahmedabad city police chief G.S. Malik.

Officials have not said the cause of the crash, which could take months or years to determine.

“I would like to express our deep sorrow about this event,” Air India CEO Campbell Wilson said in a video posted on social media. “This is a difficult day for all of us at Air India, and our efforts now are focused entirely on the needs of our passengers, crew members, their families and loved ones.”

“We are in contact with Air India regarding Flight 171 and stand ready to support them,”
a Boeing spokesperson told Fortune in a statement. “Our thoughts are with the passengers, crew, first responders and all affected.” 

The disaster marks the end of a stock rally from the plane maker, which began in April as the company doubled its aircraft deliveries from the year before. Momentum continued to build in May, when Boeing secured more than 300 new orders and produced 38 new 737 MAX jets.

Boeing’s recent share-price climb marked a departure from more than six years of struggles with production and safety concerns. In 2018, Lion Air Flight 610, a Boeing 737 Max 8, crashed into the Java Sea after departing from Jakarta and killed 189 people. Ethiopian Airlines flight 302, the same Boeing jet model, crashed months later and killed 157.

Last month, the Justice Department reached a deal with the plane manufacturer, allowing it to avoid criminal prosecution for allegedly misleading U.S. regulators about the jet model prior to both deadly accidents. The Justice Department will drop its fraud charges so long as Boeing  pays a $1.1 billion fine, as well as $445 million to the crash victims’ families.

The Dreamliner 787 aircraft, until Thursday, had never experienced a fatal crash but has been under scrutiny for years. The Federal Aviation Administration halted production of the aircraft in 2021, just 10 years after the model was introduced, after finding a manufacturing flaw. Though manufacturing resumed the next year, Boeing whistleblowers have raised concerns about the Dreamliner. Longtime Boeing engineer Sam Salehpour filed a complaint to the FAA and told Congress in April 2024 that the skin on the Dreamliner jets were not fastened appropriately, putting them at risk to break apart.

Boeing did not respond to Fortune’s inquiry about the safety of the Dreamliner 787, but last year denied Salehpour’s allegations and defended its safety and quality testing.

“I am doing this not because I want Boeing to fail,” Salehpour previously told reporters, “but because I want it to succeed and prevent crashes from happening.”

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• As Starbucks continues its “get back to Starbucks” plan to revive slumping sales, the company announced it will implement an OpenAI-powered chatbot to remind baristas of drink recipes and assist them with equipment troubleshooting. Analysts told Fortune the move could help streamline hiring and efficiency, but it also carries with it the pitfalls of AI, including the potential for hallucinations and outages. 

Starbucks is betting on AI to give its baristas some extra help behind the counter.

The Seattle-based coffee chain announced Tuesday the launch of “Green Dot Assist,” an AI-powered virtual assistant intended to simplify baristas’ jobs and fulfill orders faster. Starbucks will pilot the technology created with Microsoft Azure’s OpenAI platform at 35 locations and will roll it out nationwide next year.

The AI assistant will pull recipe cards of drinks to show baristas how to make them, as well as suggesting swaps if ingredients run out, the company said. The tech will also suggest food pairings to suggest to customers, provide troubleshooting support for malfunctioning equipment, and help managers find employees to backfill shifts should a store be short-staffed.

“It’s just another example of how innovation technology is coming into service of our partners and making sure that we’re doing all we can to simplify the operations, make their jobs just a little bit easier—maybe a little bit more fun—so that they can do what they do best,” Starbucks chief technology officer Deb Hall Lefevre told CNBC. 

Starbucks first announced the tech at its Leadership Experience event on Tuesday, when it also unveiled plans to expand the position of assistant manager by adding the role to “most company-operated stores in the U.S,” hiring about 90% of the new management internally.

The swath of labor changes are the latest in CEO Brian Niccol’s efforts for the company to “get back to Starbucks” and revive its cozy-coffeehouse reputation amid slumping sales. The company reported in April its fourth straight quarter of same-store sales declines, in part a result of economic uncertainty putting a damper on demand.

As part of the turnaround efforts, Starbucks will have to draw on its big brand name and past goodwill from customers to refocus on what made the chain popular to begin with.

“All brands drift over time, and I have pattern recognition,” Starbucks CFO Cathy Smith told Fortune in April. “I’ve seen this with a number of brands, and the great ones recapture what made them great.” 

AI behind the counter

The move follows the lead of other restaurant chains deploying AI. Yum! Brands, the conglomerate behind KFC and Taco Bell, has partnered with Nvidia to take drive-thru and digital orders. McDonald’s, however, cancelled its contract with IBM after two years and returned humans to drive-thru order-taking.

While restaurants have had mixed results with AI, analysts see Starbucks’ recent moves to leverage the technology as largely positive, so long as the company uses it effectively.

Logan Reich, an analyst at RBC Capital, told Fortune that while the introduction of an AI chatbot won’t be instrumental in increasing revenue, it can help train and onboard staff more efficiently, particularly as the company invests in internal promotions and giving employees more hours. Announcing new management opportunities alongside implementation of AI tools also sends the signal to workers that AI won’t be taking their jobs anytimes soon, according to Gadjo Sevilla, a senior AI and tech analyst at eMarketer.

“What they’re trying to show here is that, with regard to adoption, is that they can make it work with longtime staff,” Sevilla told Fortune. “So it’s not replacing jobs, it’s enhancing jobs, with regards to the new hires.”

But as with any rollout including AI, Starbucks may experience hiccups like hallucinations.

“Making sure that the chatbot is accurate and providing in an accurate way and not causing more issues—I think that’s going to be a critical aspect of rolling out to a broad storebase,” Reich said.

Sevilla warned the tech may experience more profound problems, from security breaches to outages—like the one ChatGPT experienced Tuesday—that are associated with a company using tools outside its immediate premises. As more restaurants figure out how to integrate AI into their point of sale, they may look to see how effective Starbucks was in leveraging the tech.

 “This is going to be a litmus test for AI integration at this scale,” Sevilla said.

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• As more Waymos and self-driving Teslas hit U.S. roads, insurance companies must reassess how to cover these autonomous vehicles. Goldman Sachs predicts insurance costs will be cut in half as there’s fewer human-caused accidents. But liability may switch to car manufacturers, whose tech may malfunction or experience security breaches.

More autonomous vehicles are hitting the road, and it’s leading to a reassessment of insurance costs and coverage, as well as who is to blame for fender-benders and crashes. The $432 billion insurance industry must adapt to more self-driving cars ostensibly leading to fewer human-caused accidents, according to a Goldman Sachs analyst note sent to investors on Monday.

“Autonomy has the potential to significantly reduce accident frequency longer-term and reshape the underlying claim cost distribution and legal liability for accidents,” analyst Mark Delaney and colleagues said in the note.

Tech companies are already pouring money into self-driving tech investment. Alphabet has raised $11 billion in funding for Waymo, including $5.6 billion in its latest funding round in October 2024. Tesla CEO Elon Musk said in May he expects his autonomous robotaxis to drive on the streets of Austin, Texas, this month.

Goldman Sachs estimates the rideshare market of autonomous vehicles will reach $7 billion— about 8% of the market—by 2030, while trucks with virtual drivers will grow to a $5 billion industry in the same time frame. While there may be increased ubiquity of self-driving cars as rideshare vehicles, Goldman Sachs does not expect to see a significant increase in autonomous vehicles as personal cars in the near future, but said it expects costs associated with the vehicle to fall.

Early evidence suggests the technology is effective at improving road safety by mitigating crashes, potentially contributing to lower insurance costs. A December 2024 study from insurance company Swiss Re commissioned by Waymo found in a liability claims analysis a 92% reduction in bodily injury claims and 88% reduction in property damage claims compared to human-operated cars.

Goldman Sachs predicts insurance costs will decrease more than 50% over the next 15 years, from around $0.50 per mile in 2025 to $0.23 in 2040.

But Scott Holeman, director of media relations at the Insurance Information Institute, warns that just because insurance costs are cut doesn’t mean consumers will be padding their wallets.

“While there could be lower cost on insurance products, this technology costs money, so there’s a shift in where you pay the money,” Holeman told Fortune.

Who’s behind the wheel?

Because of the potential for fewer accidents, Goldman Sachs predicts auto insurance will shift insurance products to being more focused on severity of an accident and less about accident frequency. The shift also raises questions of who is liable for accidents.

“It’s possible that the legal liability of accidents may shift, potentially changing the underlying claim costs distributions between physical damage and liability coverages as well,” the note said.

Analysts suggested an increased focus from the insurance pool on product liability and cyber coverage. Instead of human error causing most car accidents, technology woes may be responsible for crashes as a result of data or security breaches. That shifts the onus from the driver to the manufacturer or technology company partnering with the manufacturer.

“There’s more and more concern for cyber threats or security risks that someone could manipulate vehicles—bad actors,” Holeman said.

Though automated technologies appear to reduce accidents, they are still not perfect, and accidents could also be caused by technological shortcomings. In October 2024, the National Highway Traffic Safety Administration (NHTSA) opened up a probe on Tesla after the EV company reported four accidents caused by Tesla’s “Full Self-Driving” system coming into contact with sun glare, fog, and airborne dust.

The vehicles still face differing levels of regulation, depending on the state in which they operate. Transportation Secretary Sean Duffy announced in April intentions to create federal standards for autonomous vehicles.

Waymo has offered some indication of what the future of insurance would look like with more of its cars on the road. Tilia Gode, Waymo’s head of risk and insurance, told MarketWatch last year the company’s insurance for its Level-4 vehicles—those that are self-driving, but only in designated areas—are similar to a taxi company’s model of fleet insurance where vehicles are insured as a group, not individually.

“Just like any commercial entity, we have insurance coverage in place that covers the Waymo driver over the course of the driving task,” Gode said. “Essentially, there’s a shift from human being drivers to the autonomous system being the driver—Waymo is the driver.”

This story was originally featured on Fortune.com

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• Senate Republicans are proposing the elimination of penalties for not abiding by certain fuel efficiency standards. These penalties would render regulatory credits, an incentive for auto companies to abide by the standards, essentially useless. Tesla relies on these credits for a chunk of its revenue, racking up $2.67 billion from them in 2024.

As Tesla stock sputters following CEO Elon Musk’s feud with President Donald Trump, the EV maker is facing yet another threat from the administration. Republicans are doubling down on efforts to weaken carbon emission standards for the auto industry, which have provided opportunities for companies producing eco-friendly vehicles, such as Tesla, to receive and sell regulatory credits for profit.

The Senate Committee on Commerce, Science, and Transportation proposed last week eliminating penalties for companies not meeting certain economy fuel standards set to mitigate carbon emissions. The proposal is included in the committee’s portion of Trump’s sweeping budget bill. 

After Corporate Average Fuel Economy (CAFE) standards were introduced in 1975 as a means of setting standards for fuel efficiency, a credits program emerged following lobbying efforts from auto companies looking to be paid to produce lower emission vehicles. Auto companies that produce a certain amount of energy-efficient cars are given a number of credits, depending on how eco-friendly their manufactured vehicles are. Companies are required to have a certain number of credits annually.

While Tesla is able to easily attain these credits as a producer of cars that don’t run on gas, other manufacturers, like Ford and Stellantis, are not. Therefore, they buy credits from Tesla, who can sell those credits for practically 100% profit. 

The Senate committee’s proposal would eliminate certain CAFE penalties, rendering the need to have credits useless, Chris Harto, senior policy analyst at Consumer Reports, told Fortune in an email. 

“It also would essentially turn the CAFE standards into nothing more than a reporting requirement with no consequences for automakers who fail to improve the efficiency of the vehicles they sell,” he said.

The committee argued the provision would “modestly” bring down the cost of cars by eliminating CAFE penalties.

These CAFE credits have been a boon for Tesla, which has been battered by CEO Musk’s controversial involvement in—and departure from—the Trump administration. The EV-maker made $2.76 billion from regulatory credits in fiscal 2024 and $595 million in the first quarter of 2025, according to earnings reports. Tesla reported $420 million in net income the same quarter, meaning without the regulatory credit, the company would not have been profitable.

“A key element of Tesla’s profitability has been its ability to generate credits because it makes zero emissions, and sell those credits to more polluting car companies like GM and Ford and Stellantis—primarily gas-guzzlers that don’t really want to make clean cars,” Dan Becker, director of the Safe Climate Transport Campaign at the Center for Biological Diversity, told Fortune.

“By taking away these credits, they’re taking away a key element of Tesla’s profitability,” he added.

Tesla did not respond to Fortune’s request for comment.

Tesla’s credit headaches

The Senate committee’s proposal is one of several efforts by the Trump administration to cut auto sustainability standards. Last month the Senate passed legislation blocking a California effort to ban gas-powered vehicles and mandate sales of only zero-emission cars and light trucks by 2035. The bill, should it be signed by the president, would take a $2 billion bite out of Tesla’s revenue, according to JPMorgan analysts.

Also in Trump’s massive budget bill is the elimination at the end of this year of tax credits up to $7,500 for buyers of certain Tesla and other EV models, which would cost $1.2 billion of Tesla’s full-year profit, the analysts calculated. 

Tesla’s credit headaches extend across the Atlantic Ocean. Regulatory credits are common in Europe and Asia, and the European Union, for example, gives credits to European automakers who sell a certain number of zero-emission cars.

But as Tesla sales crater overseas—including falling by 49% in April—the EV maker may not be able to reach the number of sales necessary to gain credits. As of April, Tesla—grouped with Ford and Stellantis in a manufacturing pool to achieve the EU’s emission standards—are still short of the target, according to a report from the International Council on Clean Transportation. Poor sales could jeopardize Tesla’s ability to rack up credits.

“If things go bad for Tesla and they don’t sell enough cars this year, they might not have enough credits for what they promised Stellantis and the others,” ICCT managing director Peter Mock told Politico in March. “Tesla is under pressure.”

This story was originally featured on Fortune.com

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