Boeing on Wednesday announced a $355 million loss due to lower revenue in the first quarter, another sign of the crisis facing the aircraft maker. Enhanced monitoring Aircraft safety and a growing number of whistleblowers alleging sloppy work.
CEO David Calhoun The company said it was going through a “tough time” and was focused on resolving manufacturing issues rather than performance.
Since the door stopper incident, company executives are forced to talk about safety, not finances. blown off a Boeing 737 Max A large hole was found in the plane on an Alaska Airlines flight in January.
The accident halted the progress that Boeing seemed to be making during its recovery. two fatal crashes The crashes in Indonesia and Ethiopia that killed 346 people are now in the spotlight again.
More than a dozen passenger's relatives The man, who died in the second crash, met with government officials for several hours in Washington on Wednesday. They asked authorities to determine that Boeing violated the terms of the 2021 settlement and reinstate criminal fraud charges against the company, but were left disappointed.
Boeing officials did not discuss the meeting, but they met repeatedly to discuss quarterly earnings from a new focus on safety.
“As we report our first quarter financial results today, we remain focused on the drastic actions we are taking in response to the Alaska Airlines Flight 1282 incident,” Calhoun told employees in a memo Wednesday. ” he said.
Calhoun listed a series of steps the company is taking and reported “significant progress” in improving manufacturing quality. Much of that is due to a slowdown in production, which means fewer aircraft for airline customers. Calhoun told CNBC that more rigorous inspections have resulted in an 80% reduction in defects in aircraft from major suppliers. Spirit Aero Systems.
“We certainly face tough times in the near future,” he wrote to employees. “Shortening delivery times can be difficult for customers and financially. But safety and quality must come first.”
Calhoun, who will do it? get off At the end of the year, he reiterated that he was fully confident the company would recover.
Mr. Calhoun took over as CEO in early 2020 as Boeing struggled to recover from the Max crashes and regulators grounded the planes around the world for nearly two years. The company believed it had avoided the risk of criminal prosecution. The Department of Justice agreed. If the company complies with U.S. anti-fraud laws, it won't be sued for fraud for three years, a period that ended in January.
Boeing has reached a private settlement with the families of the passengers killed in the Ethiopia crash, but the families of those killed in the Ethiopian crash are pressuring the Justice Department to prosecute the company in federal district court in Texas, where the settlement was filed. continues to apply. On Wednesday, department officials told relatives the agency was still reviewing the matter.
Paul Cassel, a lawyer for the family, said after the interview, “It's all a sham.'' He said the Justice Department appears determined to honor the deal it secretly brokered with Boeing.
“We just want to move forward with the case and let the jury decide whether Boeing is the culprit,” he said.
It was a touching encounter, said Nadia Milleron, who lost her daughter Samiya Sumo in the 2019 accident.
“People are angry. People are screaming. People are starting to worry about other people,” said Milleron, who watched online from her home in Massachusetts while her husband attended in person. Her relatives believe the Justice Department “missed vast amounts of evidence against Boeing.” It's mysterious,” she said.
Milleron said Glenn Leon, head of the Justice Department's criminal division's fraud division, will decide whether the Justice Department will extend its review beyond this summer or pursue a trial against Boeing on charges of defrauding the regulators that approved the Max. He reportedly said that he may ask the Justice Department for questioning. The judge dismisses the charges. She said Leon made no promises.
The Justice Department declined to comment.
A federal judge and an appeals court ruled last year that they did not have the authority to overturn the Boeing settlement. Families of crash victims hope the government will reconsider charges against Boeing after a door plug exploded on an Alaska Airlines jetliner flying over Oregon on January 5. was.
Investigators investigating the Alaska flight said the bolt that holds the door plug in place had broken. Missing after repair work At the Boeing factory. The FBI told the passengers: crime victim.
Boeing's stock price has fallen by about a third since the crash. Federal Aviation Administration has increased oversight and given Boeing until late May to develop a plan to resolve manufacturing issues with the 737 Max jet. Airline customers are frustrated that all the new planes they ordered are not arriving due to shipping disruptions.
The airline announced it has paid $443 million in compensation to airlines for grounding its Max 9 planes following the Alaska crash.
Several former managers and one current manager reported various problems in the production of Boeing 737 and 787 jetliners. Most recently, a quality engineer told Congress last week that Boeing was cutting corners in manufacturing that could ultimately cause the 787 Dreamliner to disintegrate. Boeing pushed back actively opposed his claims.
But Boeing has some advantages.
Boeing, along with Airbus, forms one half of a duopoly that controls the production of large passenger planes. Both companies have years of backlogs of orders from airlines seeking new, more fuel-efficient aircraft. And Boeing is a major defense contractor for the Department of Defense and governments around the world.
Richard Aboulafia, a longtime industry analyst and consultant at Aerodynamic Advisory, said that despite all the setbacks, Boeing still has a strong combination of products, technology and talent that are in high demand.
“Even if you're No. 2 and you're in big trouble, you're still in a very strong market, and it's an industry with very high barriers to entry,” he said.
And despite massive losses of about $24 billion over the past five years, Aboulafia said the company is in no danger of going bankrupt.
“This is not General Motors in 2008 or Lockheed in 1971,” Aboulafia said, referring to two iconic companies that required massive government bailouts and loan guarantees to survive.
All of these factors explain why 20 analysts surveyed by FactSet rate Boeing stock a “buy” or “overweight,” while only two rate it a “sell.” useful for. (Five are “pending” ratings.)
Boeing said its first-quarter loss excluding special items was $1.13 per share, better than the $1.63 per share loss that analysts had expected, according to FactSet research.
Sales decreased 7.5% to $16.57 billion.
Moody's downgraded Boeing's unsecured debt by one notch to Baa3, the lowest investment grade rating, citing poor performance in the commercial aircraft business.
Boeing shares closed 3% lower. It has fallen 34% since the Alaskan eruption.
