Aerospace giant Boeing started this year in the news, as a plug-in door on a 737 model blew out mid-air on an Alaska Airline flight, prompting a safety investigation in the company’s manufacturing process.
Things have only gone downhill since and now the manufacturer has reported a $1.4 billion loss in the second quarter of 2024 (the months of April, May and June). With revenues 15% below last year’s second quarter, $16.9 billion compared to $19.8 billion in 2023, the company’s losses widely increased compared to the just $149 million in last year’s second quarter.
Amid the worsening financials, the company has also announced the new President and CEO, Kelly Ortberg, who will take over from Dave Calhoun on 8 August. Faced with a disastrous year, Calhoun announced in March he would be leaving the company at the end of the year, but it seems he is being replaced a few months ahead.
On 8 July the manufacturer pleaded guilty to avoid trial for two deadly crashes that took place within 6 months of each other in 2018 and 2019 that killed 346 people. Following an investigation into the crashes, Boeing and the US Department of Justice (DOJ) agreed on a $2.5 billion settlement, including the $243.6 million fine, in 2021. The settlement also gave the manufacturer 3 years to reach full compliance with anti-fraud laws. In exchange, the DOJ halted the prosecution.
Since the review after the 3-year deadline found that Boeing did not keep up their end of the bargain, the case was opened again. To avoid trial, again, Boeing agreed to plead guilty, pay another $243.6 million fine and invest at least $455 million in its compliance and safety programs over the next 3 years, with an independent monitor appointed to oversee the company’s compliance with the terms.
Regardless of whether it is approved or not, the deal, and case overall, only covers Boeing behaviour up to the crashes and does not protect the company from prosecution on other incidents that have started coming to light this year. Neither does it protect individuals, i.e. company management, from prosecution related to the crashes or any other investigation.
The 2021 deal expired just days after a plug-in panel fell off a 737 Max 9 plane during an Alaska Airlines flight in January this year. The 737 Max production is still limited pending FAA investigation into the incident, while the FBI has since indicated it is also looking into the issue as a possible crime.
Meanwhile, two former Boeing employees have come forward as whistleblowers, reporting serious structural flows and oversight in the production of the company’s 787 Dreamliner aircraft, one of its most ordered planes. One of the two men was found dead in his car while in the middle of making depositions against the manufacturer in March, which a police investigation ruled out as suicide. Following these reports, the FAA has also launched an investigation into the 787 Dreamliner production.
