Boeing HQ
Today’s key stories about Boeing center on the annual shareholder’s meeting last Friday and the implication of actions taken, including the re-election of David Calhoun to the board and approval of his pay package before his retirement. While we think neither approval was in the interest of stakeholders of the company, this was to be expected with institutional investors voting with management.
Boeing’s current board chair, who is also heading the search committee for the next CEO, is now in the spotlight and has been mentioned as a potential candidate for the position himself in some reports. Steve Mollenkopf, former CEO at Qualcomm, is suddenly facing more scrutiny over a leadership decision that could make or break the company’s future.
The potential legal actions for fraud are giving some victim’s hope that Boeing will face consequences for the MAX crashes in 2018 and 2019. Many felt the 2021 deferred prosecution agreement with Boeing was insufficient, and since that agreement has now been breached, justice may now be served. Boeing has until June 13th to respond, and the DOJ until July 7th to determine its next course of action. We expect a negotiated solution and additional fines and sanctions on Boeing to result from their breach of the prior agreement.
Links to today’s key stories follow:
- For Boeing MAX crash victim’s mom, years of despair, and then, last week, hope – Seattle Times
- NASA delays Boeing Starliner crewed launch again over helium leak – Aerotime Hub
- Whistleblower John Barnett demanded ‘Boeing pay’ in eerie note before he was found dead in car park – Mirror UK
- The law may be coming for Boeing’s fraud – Jacobin
- Boeing Board approves $32.8 million compensation, re-elects CEO Calhoun – Aviation A2Z
- Boeing’s low-key board chair steps into the spotlight with CEO hunt – Seattle Times
- Boeing supplier’s workers face the consequences of 737 MAX hiccups – The State
- How Spirit AeroSystems fits into Boeing’s rebound plan – CNBC
- The problems with Spirit AeroSystems’s layoff announcement – Nasdaq
An apparent suicide note from Boeing whistleblower John Barrett was released, and is somewhat convoluted, reflecting a troubled mental state. In addition, another delay of a few days to the crewed Starliner launch has pushed the schedule back again, while the less experienced competitor beginning the process has made successful launches routine. Why Boeing can’t come close to matching Elon Musk and a new entrant to space, when McDonnell, acquired by Boeing, effectively ran the Apollo program seems astounding, and a reflection of a culture that supports failure through financial shortcuts.
Finally, the impact of Boeing’s production cuts are being felt throughout the industry, including layoffs announced by Spirit AeroSystems prior to their acquisition by Boeing. One story highlights the optics of the move, which appear all wrong given the quality issues and problems at Spirit Aero. The layoffs are, of nothing else, very poorly timed and an image that reflects a lack of concern for safety rather than a future Boeing subsidiary staffing up to actually solve quality problems. Optics can, and often are, unfair, but need consideration and a non-myopic management in the light of current circumstances.
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After the Apollo 1 tragedy, Boeing was brought in to straighten out the mess and managed the program through the moon landings. McDonnell did not do this.