Earlier today, Boeing announced Commercial Airplanes Chief Leaving Amid 737 MAX Crisis.
Boeing Co. shuffled the ranks of top management on Tuesday, replacing the head of its jetliner business as it struggles to shore up confidence among customers, investors and lawmakers in the company’s handling of the 737 MAX crisis.
The management change, with Boeing services chief Stan Deal succeeding Mr. McAllister, comes just days after the disclosure of internal messages by a former Boeing pilot that suggested he unknowingly misled regulators in his work on the MAX. The messages angered regulators and lawmakers, driving fresh calls for leadership changes.
Boeing’s board met on Sunday and Monday as the pressure intensified. The disclosure of the internal messages sent Boeing’s stock tumbling, spurred analyst downgrades and sparked a firestorm that threatened to further delay the grounded 737 MAX’s return to passenger service.
In an interview in June, Air Force procurement chief Will Roper called out a Boeing commercial facility in the Seattle area as particularly beset by problems.
“We’ve seen issues across Boeing but the Everett facility, I would say, is the most advanced of those,” Mr. Roper said. “But we’ve seen issues across Boeing and that just tells me that there’s a lapse of culture.”
Global Groundings
Planes and Lawsuits Piling Up
Boeing has continued producing the planes, albeit at a reduced pace. Those planes are stockpiling and will need modifications once the FAA reaches conclusion as to a proper fix.
But that won’t be the end of it. Europe and Asia delays are likely to be longer. Europe no longer trusts the FAA which clearly has been in bed with Boeing.
Recall that Boeing asked Trump to not suspend the flights. Trump got that one right.
Trust is gone. Meanwhile, lawsuits over deaths, damages, lost earnings, and cancelled flights continue to mount.
Mike “Mish” Shedlock
No one at the FAA is being held accountable
Not incompetence and greed. These are easy sins to admit when not doing so would be worse. Fraud and the rule of law is what should be being discussed.
I travel a lot and I have options. I will NEVER book a flight on a 737MAX and I’m certain there’s millions of others out there just like me.
This aircraft is dead. Dismantle them for parts.
I thought this would blow over after a few months. I was wrong.
3 other CEOs announced their departures. This usually happens when the music is about to stop and people head for the exits.
The government can’t be too harsh on Boeing. Imagine the economic downturn that would rip through the country. Boeing is also a big player in space exploration, and space has military advantages.
Good bank bad bank. The military/government part can stay, they are subsidized anyways, maybe they can nationalize it, the taxpayer is the rightful owner anyways.
And the rest can go the way private corporations go that get it wrong. Or another too big to fail, only little people, home owners, and deplorables are permitted to fail, o yeah, and black folk with drugs.
““We’ve seen issues across Boeing but the Everett facility, I would say, is the most advanced of those,” Mr. Roper said. “But we’ve seen issues across Boeing and that just tells me that there’s a lapse of culture.””
BTW, the 737Max’s aren’t produced at Everett, but are rather produced at Renton. Everett is where the 747/767/KC-46/777/787s are produced.
Well, if you read the piece again you’ll note that Will Roper is the Air Force procurement chief therefore not much to do with the 737Max I’d say …
Hard to believe Boeing could screw that up so badly. I have flown on the 737-700 & 800 many times and like them.
The max isnt the same plane as its predecessors. It was a new design that got passed off as a design change by Boeing and the FAA.
Boeing is just the most publicly visible tip of a decaying iceberg.
When wealth redistribution by way of Fed debasement reaches proportions so outsized, that almost all that “increasing shareholder value” effectively boils down to, is lining up at the Fed welfare counter, any competence which may have been built up over time, will wither on the vine.
Management, and ownership, of virtually all US companies, consist primarily of at best semicompetent middlebrows by now: Self promoting clowns with little in the way of any talent nor aptitude. Promoted not on account of having delivered anything of real value nor having the aptitude to ever do so, but instead simply on account of appearing above average at licking the butts of the even less talented clowns The Fed has enabled and promoted on “Wall Street,” as well as the clueless dunces who “made money from their home” and “their portfolio.”
There’s simply very little left of the culture that delivered The Wright brothers, Manhattan Project, Moon Landing and Microchip. Instead, what we now have is just a layercake of incompetents, beating their clueless chests while living large off of massive Fed welfare stolen from the increasingly few and far between who are still able and willing to bother doing anything of value. That describes virtually every boardroom, every C-suite, and every shareholder meeting. There’s nothing unusual about Boeing, aside from their onetime business being a highly publicly visible one.
Also, since one of the most problematic failings of incompetents, is their inevitable inability to differentiate competence from incompetence in others, those who are hired by incompetents at the top, will likely be incompetent as well. And those will again hire incompetents. And so on, and s on. Until even the guy sweeping the floor, is no longer sufficiently competent to do his job properly.
That is the America which current day Boeing is a typical example of.
Boeing… boing, boing, boing. Going South-west- Airlines.
I wonder which of the institutional investors demanded heads must roll to get this done? Vanguard is my guess, they may not be very sincere but as one of the largest shareholders on the planet they are sensitive to both losses through falling share price and their public image in how they wield their power.
Top 5 shareholders in Boeing….
Stockholder Stake Shares
owned Total value ($) Shares
bought / sold Total
change
The Vanguard Group, Inc. 7.02% 39,482,204 15,021,794,156 +279,683 +0.71%
T. Rowe Price Associates, Inc. 6.35% 35,740,551 13,598,207,439 +2,607,364 +7.87%
Newport Trust Co. 5.45% 30,669,091 11,668,669,053 +298,466 +0.98%
SSgA Funds Management, Inc. 4.64% 26,128,035 9,940,933,476 -151,127 -0.58%
BlackRock Fund Advisors 4.46% 25,089,817 9,545,922,674 +449,530 +1.82%
Between them they hold 156 million shares, what they say is the law at Boeing, so it seems to me they were part of the problem of putting profits ahead of safety, and they are also among those that have the most responsibility to see the culture at Boeing changes. We should not have to wait years for findings from federal bureaucracy, if capitalism was working the way it was supposed to government would not even need to be involved.
If capitalism was working the way it is supposed to government bureaucracy need not take years to get involved and fix the mess, but it doesn’t, and it never has, the republican, laissez faire, unregulated capitalism so many here advocate will gives us much worse than jets flying nose first into the dirt, remember the company store, being paid in scrip that could only be spent there? When corporations were monopolies that covered up everything? Hired Brinks and other private armies to kill people and get their workers back in line? Melamine in the goddamned baby formula?
Nah, you want a perfect world you start punishing shareholders for putting greed ahead of safety. These shareholders should be fined about half the share price of Boeing and see if they do not take a much more attentive stance on future corporate dealings. Profit is good, it employs people, greed is bad, it kills people.
The shareholders WILL be fined at least half of their share’s value before this is over, when the stock goes down that much. None of those shareholders are airplane engineers; I’m sure they just expected Boeing to continue making good planes as before. The market is working; who would ever want to fly in a MAX now, even if they ever do fly again?
“The market is working; who would ever want to fly in a MAX now, even if they ever do fly again?”
Exactly, but let’s create a bloated bureaucracy to monitor that industry anyways.
/sarc off
I hear you StillJ, I know I never want to get on a Max, though I think I did fly from Brisbane to Sydney on one, but what choice do we have, they do not tell you what you will be flying on when you book your tickets and most tickets are non refundable. You show up at the airport and go to your gate, and get on what is provided. I am not saying the imminent threat of the MCAS system can’t be fixed, they can and likely will before it is allowed in the air again, but, the structural issues that made MCAS mandatory are still in the design and cannot be fixed, because the body/wings are too low to the ground to accommodate the swapped out larger engines. That new placement is what made stalling a problem which was “remedied” by installing MCAS. So they fix the confusing MCAS system, how are pilots going to handle a real stall when that happens?
Vanguard? Really? The passive asset manager? They’re not exactly known as being activist in anything to do with corporate governance. The MER of their funds and the associated mandate doesn’t leave a lot of money for the sort of people required to do that.
If they are passive they are so by choice and that refusal to exercise the power of the proxy vote contributes to corporate greed when it could be used to temper the worst tendencies of company management, in other words, looking the other way is no excuse. How hard can it be to install one person on a company board like Boeing that is watching out for your investment? It is not like board meetings are daily, some people serve on a dozen boards. Three or four days per year, one Vanguard employee/representative can administer the will of the shareholders on many companies, it is not like Vanguard, one of the planets largest investment companies is going to go broke because they have a small proxy department looking out for their interests.
Tell me, do Vanguard own the shares, or do they steward them on behalf of other investors?
My guess is the latter.
This is a key point in the corruption of capitalism, because whilst Vanguard isnt a person but a company, and whilst those shares do not belong to Vanguard really, someone gets to vote on all of those shares even though they are not the beneficial owner of said shares. Do you see how easy it is to corrupt the voting process and make it so the votes cast are done so in the interests of the board rather than the shareholders?
Vanguard holds/owns the shares they bought with other people’s investment money. They have sub categories different investors can pick from for different goals and risk tolerances, some people want bonds, or high dividends so they buy into REITS or utilities and Vanguard has funds for almost anyone out there. Maybe you are young and want your money managed in a growth portfolio of just equities. Maybe you want a 50/50 balanced account or you need tax breaks by owning munis, there are a lot of ways to go, but you are investing in that Vanguard index not owning the stocks yourself.
On the bright side, these funds didn’t outsource Boeing like some other companies. It must be patriotism, or something else like the defense thing poison pill. On second thought: they outsourced everything else but the final assembly. And if the rumour of ten bucks an hour H1B programmers is true, then they managed to squeezed the blood out of stone. /s
The largest institutional investor is Vanguard at a little over 7% of the company, that is not enough to make operational decisions on their own, but, the 5 largest institutional investors can present a united front to the company on issues which involve things like safety and will impact the shareholder returns. I say they have a moral duty to do so and not just a financial motive.