Bet you Boeing wishes it had back the $43.4 billion it has spent buying its own shares since 2013. From Moon of Alabama at moonofalabama.com:
On top of the damage that misguided shareholder value policy caused to Boeing’s will now come the effects of an unprecedented pandemic. Together they may well signal the end of a once great company.
On March 10 2019 Ethiopian Airlines Flight 302 crashed shortly after taking off in Addis Adaba. All 157 people on board died. It was the second crash of a Boeing 737 MAX airplane six month after Lion Air Flight 610 had crashed and killed all 189 people on board.
Exactly a year ago Moon of Alabama published its first piece about the MAX. At that time all MAX planes were grounded except in the United States. We described Boeing’s shoddy implementation of the plane’s maneuvering characteristics augmentation system (MCAS) and concluded:
Today Boeing’s share price dropped some 7.5%. I doubt that it is enough to reflect the liability issues at hand. Every airline that now had to ground its planes will ask for compensation. More than 330 people died and their families deserve redress. Orders for 737 MAX will be canceled as passengers will avoid that type.Boeing will fix the MCAS problem by using more sensors or by otherwise changing the procedures. But the bigger issue for the U.S. aircraft industry might be the damage done to the FAA’s reputation. If the FAA is internationally seen as a lobbying agency for the U.S. airline industry it will no longer be trusted and the industry will suffer from it. It will have to run future certification processes through a jungle of foreign agencies.
Congress should take up the FAA issue and ask why it failed.
The MAX was developed and built as cheap as possible and not as safe as possible. Boeing cut corners and deceived its customers and regulators. Its management had only one thing in mind – the stock price of Boeing and its so called shareholder value.
