Yahoo Finance spoke to analysts and experts about Boeing’s difficult 2024 amid growing safety concerns and government scrutiny.
Boeing’s reputation is undoubtedly tarnished by what happened on Jan. 5. when missing bolts caused a door to blow out midflight. What makes its task more challenging is that its reputation was already bruised before 2024 began.
It had spent the previous five years taking steps to recapture the trust of regulators and the flying public following crashes in 2018 and 2019 that killed all 347 people on board two separate 737 Max 8 planes.
The chaos aboard the Alaska Air flight on Jan. 5 resurfaced the concerns that Boeing had spent half a decade trying to quiet, and now every new revelation or report of other incidents provides Boeing with more damaging headlines.
They include Boeing planes that suddenly plunged mid-flight after a pilot said he lost control of the aircraft, "stuck" rudder pedals, an engine that belched flames midair, and a wheel that fell off after takeoff.
There was also news that a Boeing whistleblower died on the day he was scheduled to give testimony about safety concerns.
To make matters worse, in February, Boeing entered into a $51 million civil settlement over State Department claims that the company committed 199 violations of the Arms Export Control Act and International Traffic in Arms Regulations.
The government said Boeing employees in China illegally downloaded data from Boeing defense aircraft and missiles, resulting in unauthorized exports of technical data to the People’s Republic of China.
Boeing agreed to a corporate monitor to oversee its ongoing security practices.
Declining investor confidence
Another problem for Boeing is that investors are uncertain that Boeing and its management team can work their way out of the current mess.
The stock of Boeing is suffering. It has lost roughly a quarter of its value this year, shaving tens of billions off the company’s market valuation.
The company made a dramatic move to restore some confidence in its governance by announcing the exit of its CEO, Calhoun, who had served on the board since 2009 and was installed as CEO after the earlier crashes in 2018 and 2019.
The company also announced that Larry Kellner, chairman of its board, will not stand for reelection at the company’s upcoming annual shareholders meeting. Steve Mollenkopf, the former CEO of Qualcomm, will replace Kellner and lead the company’s search for its next CEO.
In a letter to employees, Calhoun said the Alaska Air incident "was a watershed moment for Boeing."
"The eyes of the world are on us," Calhoun added, "and I know we will come through this moment a better company, building on all the learnings we accumulated as we worked together to rebuild Boeing over the last number of years."
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Boeing also said Stan Deal, currently CEO of its Commercial Airplanes segment, will retire.
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