More fallout from Boeing blown door
Criminal charges, Annual Meeting, and green shoots?
It is usually not good news when Saturday Night Live makes your company the center of a joke. That’s how bad things have gotten for Boeing.
During the Weekend Update segment on the NBC program, Michael Che delivered the biting commentary with a jab at Boeing and Donald Trump. “The FAA revealed that Donald Trump’s Boeing 757 clipped a parked plane when it landed in Florida. The good news is Donald Trump flies around in a Boeing,” Che said as he chuckled.
Credit: NBC-Comcast
The joke came at the end of a week that Boeing learned it may face criminal charges after all, and as the CEO delivered a message to shareholders about the terrible condition the company finds itself in. David Calhoun announced earlier this year he will step down at the end of the year. Calhoun fell on his sword after that door blew out of an Alaska Airlines 737 MAX. It turns out that incident could be even more costly for Boeing.
POSSIBLE PROSECUTION
After two Boeing 737 MAX aircraft crashed, killing all on board, the US Department of Justice (DOJ) filed criminal charges against Boeing alleging the company defrauded the Federal Aviation Administration (FAA) by hiding important information about a computer system that could order the aircraft to nose down. But the DOJ offered Boeing a deal- pay $2.5 billion in fines and compensation to airlines and families, install safety programs to avoid prosecution. The deal was close to ending. But the Alaska Airlines door incident apparently was the last straw for the DOJ, which concluded Boeing’s safety programs didn’t meet its requirements.
In a letter the government told Boeing it has violated its deferred prosecution agreement. The DOJ notified family members that they are victims of a crime and may have rights if the case moves forward. However, the DOJ said in its filing with the court that it’s not sure whether it will prosecute Boeing. “The Government is determining how it will proceed in this matter… The Government will inform the Court once it has decided on how to proceed, but no later than July 7, 2024,” the DOJ said in its filing last week.
Boeing will be responding to the DOJ in the coming weeks and says, “We believe that we have honored the terms of that agreement, and look forward to the opportunity to respond to the Department on this issue,” a Boeing spokesperson said in a statement reported by AP.
ANOTHER SPACE DELAY
While all this was going on Boeing again delayed the launch of its spacecraft Starliner. The spacecraft was pulled from the pad because of a rocket issue. There was also a problem in the spacecraft’s service module which Boeing did not report at the time it scrubbed the launch.
The bad news served as a backdrop when Boeing CEO David Calhoun faced shareholders virtually during the company’s annual meeting Friday. He admitted the additional costs to the company of the blown door incident in January. “The Alaska Airlines Flight 1282 accident was a watershed moment for us and a stark reminder that much more work remains.”
Calhoun said the company will meet with the FAA in the coming weeks about its 90 day plan to deal with safety issues and working to make sure everyone is, “100% confident in Boeing.”
The outgoing CEO said he is ensuring that Boeing does, “all we can to get us on the right trajectory and ensure a smooth transition for my successor.” Still, when Calhoun steps down as CEO, Boeing could be on trial for those criminal charges.
GREEN SHOOTS?
The best news Calhoun may have heard recently came Monday when one of his customers, and sometime critic, Ryanair CEO Micheal O’Leary, told CNBC Monday that Boeing is improving.
This is the same Michael O’Leary who in March called for firings at the Boeing Commercial Airplane division. “Thankfully they did. The team in Seattle has changed,” O’Leary exclaimed as he praised the new management at the Boeing division.
He says Ryan Air was promised two 737 MAX aircraft in June and three in July. In recent weeks the airline CEO says he’s been told they will get a total of nine jetliners instead of five the next two months.
“There are green shoots of recovery here. We are seeing fuselages being moved from Wichita to Seattle with no defects. That’s a big improvement,” he said before adding, “I think they are getting there.” That is the most positive thing an airline executive has said about Boeing in some time.
Boeing may be improving. But its troubles with the government and other customers remain. Which means there may be even more jokes about the jet maker on late night television.
I fly only when I absolutely have to. I would take a covered wagon if I could to avoid it! Not much in your report changes my mind. Very informative piece! Keep up the great reporting.