Boeing’s safety, labor battles heat up while CEO will walk with $34m payout

By Scott Hamilton

May 16, 2024, © Leeham News: Even as Boeing is under fire for safety issues, the company’s battles heat up.

  • Boeing remains at an impasse with its engineers and technicians union over creating a new safety program. The company has doubled down, the union says. SPEEA has turned to lawyers for legal advice.
  • The US Department of Justice on Tuesday notified Boeing that it concluded the company failed to live up to terms of a 2021 Deferred Prosecution Agreement (DPA) intended to put to rest all criminal liabilities stemming from the 2018-19 737 MAX crashes that killed 346 people. DOJ may go ahead with criminal prosecutions now.
  • The firefighters union was locked out by Boeing over contract negotiations, bringing in replacement workers. The union says Boeing’s actions threaten safety at its plants. SPEEA and its powerful touch labor union, the IAM 751, are picketing with the firefighters in support.
  • IAM 751 apparently is using the firefighters’ strike as a training ground in anticipation of its own possible strike in September when its current contract expires.

SPEEA and Boeing

LNA reported that SPEEA on Jan. 31 proposed to Boeing the creation of an Aviation Safety Action Program (ASAP). ASAP is based on decades-long programs used by US airlines. Safety concerns may be reported without fear of retaliation or retribution. Boeing’s culture became known for engaging in retaliation when union employees brought safety concerns to the attention of managers.

This culture came to the forefront in the aftermath of the two MAX crashes in 2018 and 2019. Despite creating new safety programs intended to encourage employees to come forward without fearing for their jobs, called Speak Up, a year-long study by an expert panel concluded retaliation, retribution and job security fears remained. SPEEA recently filed another complaint about retaliation and pressure on Boeing employees who represent the Federal Aviation Administration.

ASAP was adopted last year by the IAM 751 and Boeing. Its implementation is in its infancy. It’s too early to gauge how it’s working.

Boeing proposes using the IAM 751 contract for SPEEA. The trouble, from SPEEA’s perspective, is that the 751 process provides that Boeing decides what reports get sent to a three-member committee comprised of the union, the company, and the FAA to assess the information. SPEEA objects to Boeing being the decider on what the committee sees.

But Boeing isn’t backing down. So SPEEA this week teamed with the law firm Katz Banks Kumin to provide whistleblower training at Boeing facilities in the Pacific Northwest and at Spirit AeroSystems in Kansas. SPEEA also represents the Spirit engineers. Spirit builds the 737 fuselage and the nose sections on Boeing’s 767/KC-46A, 777 and 787. Quality control has been major problems at Boeing and Spirit.

The first meetings with the law firm are tomorrow.

Department of Justice and Boeing

On May 14, the DOJ notified Boeing it may pursue criminal prosecution dating to the MAX crashes, alleging the company failed to live up to the 2021 DPA. In a letter to the federal court in Texas that approved the DPA, Justice wrote:

The United States of America respectfully submits this letter to update the Court on the status of the Deferred Prosecution Agreement (ECF No. 4) (the “DPA”). Today…the Government notified Defendant The Boeing Company that the Government has determined that Boeing breached its obligations under [the] DPA…by failing to design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws throughout its operations.

Boeing has 30 days to reply to the court, but in a statement said it believes it has complied with the DPA’s terms.

Firefighters and Boeing

Boeing has its own fire department. It’s on-site and performs functions typical of any fire department: safety inspections and responding to fires and medical emergencies. In addition, this fire department stands by for airplane-related events, fuel spills, etc., within Boeing’s operations.

Firefighters twice rejected Boeing’s contract offers. After the second rejection, Boeing chose to lock the union out before it could strike on May 4. The firefighters are asking for amounts amounting to an additional $3m to $3.5m a year. This is about one-tenth of what Boeing will pay CEO David Calhoun ($34m) when he retires on Dec. 31. (Tomorrow is Boeing’s annual shareholders’ meeting, Calhoun’s last as CEO. An advisory vote is on the ballot for compensation.) The pay hike request amounts to 40% over the current contract. Calhoun’s exit package is for performance and vested stock during his 2020-2023 tenure. SPEEA and the IAM 751 are prevented from honoring the firefighters’ picket lines under the terms of their contracts. But both unions are supporting the firefighters through picketing.

IAM 751 and Boeing

Boeing and the IAM entered contract negotiations on March 8. The contract expires in September. District president Jon Holden wants a 40% pay hike for his members over four years, plus improvements in health and pension benefits. 751’s current contract dates back 10 years, with several “givebacks” on health and pension benefits demanded and won by Boeing. Pay raises were small, given the economic and company conditions at the time. Holden wants to recoup some of these despite Boeing’s current financial disarray and production issues.

Boeing may not want to give a 40% pay increase right now to the firefighters because Holden is watching. SPEEA also had a minor contract in play (its main contract expires next year) for its Tech & Safety pilots in February. Paying them what Boeing’s own comps said they were worth would have cost the company a little over $1m in Year One of the contract. (Roughly $50K raises for 23 people.) Their cost savings for playing hardball was $600K to $700K, or basically a rounding error.

The IAM 751 presence on the firefighters’ picket lines refreshes the union’s strike process. 751 last struck in 2008, for 57 days. This may be viewed as a dress rehearsal by 751.

106 Comments on “Boeing’s safety, labor battles heat up while CEO will walk with $34m payout

  1. Greed at the highest level.
    The DoJ should request arrest warrants for top leadership. This is all they deserve for the killing of all of the innocent people.

    • Normand:

      Good laugh to start my morning. Boeing is in a bind, its got nothing to do with shareholders though.

      It has all to do with gutting the company to buy shareholders off. Any shareholder in Boeing deserves what they get and when was the last time a suing shareholder had an impact on a company?

      Compared to what management has done to Boeing its peanuts.

      Seems more than fair for Workers to have their own lawyers.

      Boeing can unbind itself. Claw back Calhouns ill gotten gains for total failure that he is.

      Anyone else that failed like he did would be cleaning floors (though I doubt Calhoun can even do that)

      The CEO issue is that the board is letting Calhoun play games with Pope as his anointed heir. You mess up beyond belief and then you want to decide who replaces you.

      It would be a violation to say what that is but the mild version is he is out of his mind and the sad version is the board did not can him immediately.

      He has less than nothing to offer even a guy scrapping rust let alone Boeing.

      If he was military he would be on latrine duty in Levenworth.

      • ” Boeing can unbind itself. Claw back Calhouns ill gotten gains for total failure that he is.Anyone else that failed like he did would be cleaning floors (though I doubt Calhoun can even do that)..

        years ago the comment would have been – ” he would need shovel training for the stalls at longacres to handle his product “

      • Well today friday 17- The shareholders that matter approved/reelected all those up for election, including calhoun- and approved compensation issues plus auditor. And defeated all shareholder proposals
        ‘Answered” a few carefully chosen questions submitted.

        Of course as the meeting started- they had a ‘ quality escape’ with the audio which lasted about 2 minutes.

        IMHO- the meeting comments and speeches etc produced the digital equivalent of several truckloads of miracle grow compost replacement.

        • Just clarifying: The failed CEO will still be on the Board. I am just wondering outloud, in the history of corporate blundering has something as egregious as this happened before… Is there more blood to get from this stone…

          • a runnerup might be

            James R Milsap, v McDonnell Douglas Corp. Case No 94-C-633-H Filed Sept 5, 2001 U.S District Court, Northern District of Oklahoma..

            The facts are undisputed.   Defendant manufactured and assembled military aircraft at a plant in Tulsa, Oklahoma.   Defendant’s employees at the plant participated in pension and/or health care plans qualified under ERISA.  …..According to the complaint, Defendant closed the Tulsa plant to prevent Plaintiffs from attaining eligibility for benefits under their pension and health care plans.   Plaintiffs requested damages, an order requiring Defendant to make restitution to their benefit plans, and any other equitable or remedial relief…..
            **** This is one of the rare times the CEO of a major company has been caught in a major lie, and found responsible for destroying evidence and violation of almost all Federal laws…

            Not only did he and his executives lie to public officials, but played games with the DOD…

            231. The fact finder’s disbelief of the reasons put forward by a defendant “may be quite persuasive” of intentional discrimination “particularly if disbelief is accompanied by a suspicion of mendacity.”[cite ] {cite] – . Here, Defendant’s mendacity is manifest Specifically, as identified in the Findings of Fact, MDC’S mendacity is established by the untruthful and misleading answers provided to Plaintiffs under oath in its discovery responses, its depositions and in its trial testimony.

            232. The record further reflects a corporate culture of mendacity, as evidenced by the testimony of plant manager Mr. Bittle and the disregard for the truth evidenced by the testimony of CEO John McDonnell. As the Court observed during the trial:

            We have sat here for two weeks and listened to testimony that I think at some places is almost knee buckling in the way in which it evidences an abject disregard for people’s representations, people’s representations to their employees, their teammates, people’s representations to the public, people’s representations to public officials. We have other kinds of testimony: Mr. Bittle himself indicating he believed himself to be an unwitting instrument of fraud on the employees and the public; I think that the notion of engaging in negotiations that are known to not to mean to go to anything; and the ultimate question of closing a plant, recognizing the broad latitude the company has under the law, it’s entirely appropriate to review the numbers as long as improper numbers are not considered; but to hear testimony that there was never even consideration as to whether there were commitments, express or implied, to employees, to the public, to public officials…
            …Tr, 1243.

            233. The Court finds that the testimony of Defendant’s key witness at trial on the reasons for the Tulsa plant closing, Project M Team leader Peter Juliano, was clearly untrue, not . . . . . .

            The above was over a decade ago

            *** perhaps the mcdummy virus is catching ??

          • These “men” will bring this country to its knees. Such small people…

    • Worth mentioning that Calhoun intends to remain on the board of directors. He resigned as CEO, but not as a member of the board. He has not given up on trying to control the direction of the company and its cash flow. He will use his power on the board to continue buying off the shareholders by disinvesting in the future.
      He wants Pope as CEO to block development of any new aircraft.
      He has not given up.

  2. Boeing are in a bind. They must satisfy their shareholders because if they don’t they might be sued. But the various unions are also working with lawyers, while at the same time Boeing have the FAA on their back. We can add to this the various airlines that won’t receive their airplanes when they were supposed to. So what we are about to see is Boeing being sued simultaneously by their employees, their customers and their shareholders. All this while being restricted by the FAA. And on top of that they are apparently under investigation by the FBI as well. When we put it all together it helps to explain why no one wants to become the new CEO of Boeing.

    • I don’t think this is necessarily true. There would the the issues of standing and which court in which to make a filing. Per GAAP, the shareholders have owed the company (net negative equity section of the balance sheet) since sometime around 2012 at a minimum. A reasonable argument can be made for 2007. Keeping the deferred development costs as the phony asset that it is, even by their own accounting equity has been a net negative since 2018. So to have standing, a shareholder would have to answer a motion to challenge their standing. That might be a tough argument to make, which gets us to the court.

      What would be the proper venue for such a filing? Maybe a superior court in the state of Delaware? It was Delaware the issued the charter. Or maybe one could argue for a federal court on the basis that it is a publicly traded company that has to conform to SEC regulations, but that probably makes the standing issue an even tougher argument to win. I don’t think the fiduciary responsibilities include the shareholders at this point, but it would be a very interesting set of arguments.

    • This should have gone here


      Good laugh to start my morning. Boeing is in a bind, its got nothing to do with shareholders though.

      It has all to do with gutting the company to buy shareholders off. Any shareholder in Boeing deserves what they get and when was the last time a suing shareholder had an impact on a company?

      Compared to what management has done to Boeing its peanuts.

      Seems more than fair for Workers to have their own lawyers.

      Boeing can unbind itself. Claw back Calhouns ill gotten gains for total failure that he is.

      Anyone else that failed like he did would be cleaning floors (though I doubt Calhoun can even do that)

      The CEO issue is that the board is letting Calhoun play games with Pope as his anointed heir. You mess up beyond belief and then you want to decide who replaces you.

      It would be a violation to say what that is but the mild version is he is out of his mind and the sad version is the board did not can him immediately.

      He has less than nothing to offer even a guy scrapping rust let alone Boeing.

      If he was military he would be on latrine duty in Levenworth.

  3. Calhoun will leave Boeing as its worst ever CEO & COB. The rot he has instilled is almost unfathomable.

    • Calhoun inherited the mess left by McNearny and Mullinberg. Granted, he hasn’t done much to fix it, but that [Edited] Mullinberg was the worst.

      • Pretty subjective assumption. This Hedge Fund-type leadership at Boeing these past three decades has many failures, but it still comes down to so many intangibles.

        But I know this, there are still plenty of candidates that would love to spend a year or two at the helm of Boeing Corporation. It will be written into their contract that if planes crash, if doors fly off of month-old planes, if debt increases by 10s of billions of dollars – they still will be entitled to a “King’s Ransom,” for being shown “The Door.”

        As pointed out, Boeing is a sick organization on too many levels. She just might go the way of GE: Languish for two decades, get parted out like a 58 Chevy, and then finally rise a shadow of her former self and show how a $10,000 investment in 1995 is now worth $8,000 today – that’s not accounting for inflation. But GE-type business school principles were followed to a “T.”

      • Dennis has a lot to answer for but he wasn’t the one that made the strategic decisions about the max. He wasn’t the one who approved spending tens of billions of dollars on stock buybacks.

        • Who kept it flying knowing perfectly well what caused the first crash?

        • Under Dennis, Boeing massively increased share buyback, to almost $30 billion.

    • I would say more the end string of 3 truly horrid CEO and he was the one holding the bag when the thing came crashing down.

      No sympathy, that is the game, get out while the getting is good and leave the mess to the next person.

    • Calhoun is leaving as CEO but staying on the board, not as chairman but as a typical director.

      • Typical Boeing. Continues to shoot themselves in their feet by keeping on incompetent people.

  4. Apparently you can get CEO, survive for a few years and leave with ten of millions if you keep up perceptions with shareholder & serve the other EVP’s benefiting for the same self destructing incentive / bonuses payment scheme. Just like the previous 2 CEO’s.

    IMO change from the top (& incentive packages) is needed, not another smart CEO who survives a few years by pushing out investment /change and telling half truths people love to hear.

    • Remember when you got paid for performance?

      The system has been totally corrupted

      • The CEOs get paid for quarterly results in a business with decade long cycles. The shareholders get what they paid for. They ruined their own business.

  5. In the 2024 Proxy- lower left corner page number 79 (page numbers somehow get shifted by 7 pages when displayed so search shows page 79 as page 86 )
    we find by searching on ‘ clawback ‘ – the following

    ” Layoff Plan benefits are subject to forfeiture and clawback for five years following an executive’s termination of employment if the executive (1) engages in an activity that is determined to be in competition with a significant aspect of our business, (2) commits certain criminal acts, (3) solicits or attempts to solicit our employees, representatives or consultants to work for the executive or a third party without our consent, (4) disparages us, our products or our employees, or (5) uses or discloses the Company’s proprietary or confidential information.”

    and clawback can be found on other pages via search page 85,84,76,77,57,56,52, and 14.

    Now what are ‘ certain criminal acts ‘ ? Hopefully they are more than
    jaywalking or fishing off the company pier ?

    The provision seems to have a 5 year limit after termination.

    means harry and athers McNearney get off free ?
    on page 69 we find

    ” The policy also incorporates our pre-existing clawback requirements relating to certain types of misconduct, including relating to safety. Even absent a financial restatement, the Board or the Compensation Committee may recoup incentive compensation from any executive officer or any other executive who has engaged in fraud, bribery or illegal acts like fraud or bribery, or knowingly failed to report such acts of an employee over whom such officer had direct supervisory responsibility. The Compensation Committee, in consultation with the Aerospace Safety Committee, also may recoup incentive compensation from any executive who has violated, or engaged in negligent conduct in connection with the supervision of someone who violated, any Company policy, law or regulation that has compromised the safety of the Company’s products or services and has (or could reasonably be expected to have) a material adverse effect on the Company, our customers or the public. The Board has the flexibility under this policy to direct the Company to publicly disclose any recoupment made pursuant to the policy. Our clawback policy is available at”

  6. I wonder if there will be any significant prosection of Boeing for
    not living up to their Deferred Production Agreement.
    A falsifiable prediction: No (are you kidding?).

  7. With regard to the DPA/DOJ issue, the following article contains much interesting information/opinion.

    Of particular interest:


    “Professor Coffee argues that there is a political dimension to the case, and that the company has demonstrably received tougher handling at the hands of President Joe Biden’s DOJ than it witnessed during Donald Trump’s presidency.

    ““Boeing is going to be sitting there saying, do I negotiate with Justice today, or do I wait and see what happens in November, in which case I can possibly negotiate with Donald Trump again and get a much easier settlement than I would with the Biden administration. That’s the political calculus here,” he says.”

    ## This political dimension makes a farce of the motto “Equal Justice Under Law” inscribed on the facade of the U.S. Supreme Court in D.C.


    “Many analysts believe that Boeing remains “too big to fail”, and that America’s governing and investigative institutions will take steps wherever possible to shore up the company in order to protect jobs and the company’s contribution to the broader economy. But some observers increasingly argue that the company is also becoming “too weak to succeed” in its global competition with Europe’s Airbus.

    ““I don’t think the aviation industry wants Boeing to fail,” says Professor Coffee, who says major airlines “desperately want Boeing to survive. But they also are aware that there is a consumer backlash. People don’t like the name Boeing, and they don’t trust it.””

    ## The idea of “too weak to succeed” is already manifesting itself on many fronts — most recently the fact that Boeing got only 7 orders in April (and 33 cancellations)


    • Let me suggest a broad outline of a plan for putting Boeing back together, which I think can set aside the “too weak to succeed” argument.

      First, yank the charter and set up a new kind of corporate charter at the national level. The state of Delaware is totally hopeless as a charter administrator in a situation like this. To qualify for a national charter, an act of Congress would be required much like the routine legislation that approves officer promotions in the military.

      Require all leaders who have a personal services contract, as opposed to being regular salaried employees, to be licensed professionals – a new kind of license similar to what we have for doctors, lawyers, and accountants, with a code of professional ethics, which if violated can result in a license being yanked.

      Next, call for volunteers from the retiree community to serve on mentoring and advisory team embedded at every level. Buy their lunches, and maybe make some additional contributions to their pension plans. The volunteer would come out of the woodwork. This is NOT a problem.

      Next, commit to quality first in all things. This needs to be absolutely uncompromising.

      Restore the twin ethics of delivery commitments being sacrosanct, and requiring and rewarding openness in status reporting. Punish inadequate status reporting quite severely.

      Finally, while good technical leadership and vision setting at the major division level is a critical necessity (it needs to be an engineering company once again), this is NOT the paramount requirement at the corporate level. Rather, leaders who set a very clear ethical example in the way they go about their daily work has to be the paramount quality. This need to be driven to a fine level of detail – the William Allen example is a great one. The CEO as some sort of medieval prince being followed by a gaggle of fawning suck-ups has to go. That personality and behavior type simply must not be tolerated.

      Oh, and how to pay for it is also fairly simple. Do it the way the last two advances from the Fed were done, and keep the US Treasury out of it.

      • And how will any of that cure the fact that Boeing has essentially zero margin on its order book?

        Are you expecting it to go back to customers and demand higher pricing than originally agreed upon?

        If it can’t generate meaningful earnings, it will just continue to drown.

        The (nominal) revenue value of the order book may seem impressive, but its earnings value is insignifcant. Boeing failed to match the sale price of its aircraft to the realities of their development/production costs, and now the company is stuck with the consequences.

        • I did not get into the technical and monetary aspects, just the broad outline. But to answer your question, on the commercial side, the 20xx program needs to be restarted, with a redesign of the interfaces throughout the 787. This would require an army of engineers working with the suppliers to define the new interface standards (I did a pretty thorough discussion of this in my videos – Charlemagne’s Clock on YouTube).

          Any planes that have been delivered that are suspect need to be repurchased or swapped out at no cost to the customers. This would include setting up a line to remanufacture all of the MAXs. That combined flight control systems LRU needs to be scrapped and replaced with a multiple LRU design that makes it possible to power down any misbehaving chunk of software. It would be a good idea to work with AB and the avionics manufacturers to define a new AIRINC standardized backplane for the LRUs, and come up with a new much smaller 1U size. Also, get rid of the old screw-on connectors, and have the backplane design take care of “grabbing and sealing” the back panels of the LRUs, and ensuring the connections in the process. Then apply this to all new designs.

          On defense and space the list of things that need to be done is horrendously long. The tanker program needs to have all of the planes except maybe two, reworked to the old KC-767 configuration and fire every last exec and manager that has been lying about the functionality of the system. The current design doesn’t work and is a piece of crap (that’s my toned down version). Move the special transport program support back to Wichita from OKC and rehire as many of the still living experts on that stuff as can be found. It goes on. The list of stuff that is screwed up on the defense side makes commercial look like it has no issues.

          OK, no let’s be honest here. The decision facing The United States is whether or not it wants to have a company that has the capabilities that Boeing used to have. If the answer is no, then simply keep the government out of it and let it go away. If the country wants this capability, then we are looking at a mess comparable to what was faced at the start of the two world wars. The industrial capability basically needs to be rebuilt from scratch. Or maybe this generation is just a bunch of crybabies that can’t do anything and hasn’t the guts to get off their duffs and make it happen. (I’m struggling here to old down my disgust and anger over the crappy leadership we have – the Dems are bad and the R’s are close to being treasonous). The question is almost never “can something be done” but rather one of whether we’ve got what it takes to get off our duffs and make it happen.

          • re .. “The tanker program needs to have all of the planes except maybe two, reworked to the old KC-767 configuration and fire every last exec and manager that has been lying about the functionality of the system.”

            Agree- but IF memory serves,the whiz bang remote controlled boom system was an Air force requirement..

            Did not help that after a decade, the planners in Everet used the 767 commercial wiring system and arrangement instead of the mil-spec requirements which are much different.

          • The Whix bang RVS system was sold to the Air Force by Harry Stonecipher. Here is how it went down. He asked some folks in St. Louis if they could come up with a way of doing a tanker without the expensive mods to the aft pressure bulkhead and sections 47 and 48 to create the pressurized boom operator’s pod. If anyone wants an up close look at what this mod looks like, the 747 prototype (The City of Everett) located at the Museum of Flight is open and you can walk inside right up to a demo version that was done for a proposed 747 tanker that was never sold. So, the engineers in St. Louis came up with the RVS, and it was sold to the Air Force in a TIM (technical interchange meeting), then the Air Force turned around and fed it back in their RFP. If they had proposed doing a prototype with one or two planes, that would have been ethical and a reasonable thing to do. Then they could have worked on it, or given up , at a reasonable cost. But ego, a seri0us lack of humility, and a continuing lack of honesty on the part of all involved continues, resulting in one of the biggest waste of tax payer dollars ever. This thing makes projects like the bridge (Alaska) and freeway (Texas) to nowhere, look trivial. You don’t do new tech in production until you have thoroughly vetted it in a prototype. And, you have to be honest about your results. These people are all incompetent liars, pure and simple.

            But let’s go one further. Think about the economy as a whole and what a distribution of engineering talent should look like in a rational world. Do you want your best and thus highest cost engineers designing the aerospace equipment that our lives depend on, or video games and social media platforms that drive lots of advertising revenue? The greed and stupidity of what we have done is unconscionable. Yeah Muilenburg was bad, but in my book Harry Stonecipher and Prince Him McNerney are mass murderers, and should be rotting in some super max. At this point one of my friends would usually say “why don’t you tell us what you really think Craig?”

          • A bit more on 767 tanker history re
            ” The Whix bang RVS system was sold to the Air Force by Harry Stonecipher. ”

            Starting in 2000- 2001 the 767 tanker was aborning. Airfsrame was mil spec certified. etc. Italian and Japan were interested and Boeing brought in Rudy De leon (prior dep sec of defense and long term political hack ) in mid 2001 to push that and other related. But the game changed a bit on 911. Among various problelms was the then downturn in 767 production. So the (in)famous lease game was concieved ( and later screwed up by Dryun and Sears ). But the McDummy gang were insistant that somehow they needed a way to add their’ expertise ‘. argued against completing and delivering an operable tanker from Everett- due to military classified issues, etc. So their proposal was for ‘ commercial ‘ to build a flyable ‘green ‘ 767 with some basic tanker mods and deliver it to ‘ military’ at everett.
            Then to be flown to Wichita – or maybe St louis or ?, and essentially taken apart to fit tanker boom and electronics etc and then deliver it to military. The commerciial $$ involved were to be minimal and the real pork would accrue to military.

            if the above sounds idiotic it was- is it true yep – i was present at a meeting where Rudy sort of broad brushed the game- and also knew someone who filled in several of the ‘ details ‘

            Thus we have the 767 F (ubar) tanker of 2 decades later.

          • Yet more on the tanker – the one where we were going to do a long term lease on them to make the budget work for the Pentagon, and which got killed due to the Sears/Druyan scandal was a significantly better plane. It had the -400 wing which was developed as a part of the Stretch 2000 program. That wing was a lot more efficient than the standard wing. But, it was longer, so once the program was consolidated and their final assembly tooling was moved into the 40-32 building in Everett, after tearing down half of the structures tooling, and putting big doors on the back of the building, a plane with the -400 wings would not fit around the end of the building without doing more demo work on the 40-56 which had the power pack and strut stuff that was moved up from the Thompson site, or moving the utilities that are on the south end of the 40-10/11 building. So, they went back to the old wing for the second go-round. A single structure was built with the better wing (L/N 923), which was used as a paint article for a while before being scrapped.

            Sorry about the typos. This whole mess really makes me angry. Instead of making each new plane better than the ones that went before, and taking advantage of all we had learned, we just started cutting every corner we could and pump out the crappiest products we could get away with.

          • These CEOs at Boeing, their VPs and the BODs are crooks. Plain and simple. They have instigated a fraud and operate with impunity. There’s nothing on the horizon that suggests things will be different. At some point they could start using bankruptcy courts to continue stripping assets from the company. Municipalities and business schools will erect statues and have scholarships in their names. It’s a sign of the times.

      • RTF:

        The massive changes that your solution would require simply are not going to happen.

        Over time some might, while Boeing is being focused on the issue is Corporations wide and they have the money to stop any action let alone in a Political Climate we have.

      • ***Short Version***

        The folk who decide whether Boeing is too big to fail, or too weak to succeed, are not Boeing, the FAA, the US goverment, or US politicians. It’s the international airliner market that decides, and at the moment they’re voting with their feet.

        If the USA has any ambitions to retain a presence in the airliner business, it needs to act pretty damn quickly, and the time to act is likely pretty close at hand. It’s the international airliner market that holds the power as to whether or not Airbus becomes a global monopoly (not even Airbus), and they’re currently voting with their feet. Attracting a bigger slice of that monopoly to the USA is likely a key component to staying in the business.

        Boeing’s large order book is of zero value if it cannot be safely and profitably turned into product, and at the momet there’s very few reasons for buyers to believe it can. Not even US based airlines believe that anymore.

        ***Long Version***

        The tricky thing is understanding whether the plan’s starting point aligns with the company’s true position. The question of whether Boeing is too big to fail, or too weak to succeed therefore becomes very important.

        There’s a lot to suggest that they’re too weak to succeed. They have no current models that are trouble free. They have enormous difficulties actually building, well, anything. They are losing market share hand over fist. There is no positive trend anywhere in the BCA company. And there’s a significant possibility that the FAA will be forced to close down production.

        Whether they’re too big to fail is a political matter. Does the US Gov want Boeing to survive on the military front? Likely yes, and those business units can probably be foisted off onto the likes of LM and NG.

        On the civil airliner front? Well, that’s a bit more nuanced, and mixed up with domestic and international politics. The US businesspeople, politicians and gov can strive all they want, but if the rest of the world concludes, “Airbus has won”, then Airbus has indeed won. All that Boeing are accomplishing at the moment is reinforcement of that view. There’s then pretty much nothing the US Gov can do to change their minds or change that fact. At least, not in the short term, and probably not the medium term. At present, no one seems to be able to convince even the most loyal of US based airlines that Boeing has a future.

        It’s almost certainly the case that the US Gov wants the USA to stay in the airliner market, and it’s almost certainly the case that the aviation industry wants them to do so. The trick is to come up with something credible. To do that, one has to come up with plans, and trade them off.

        Thing is, when one does that all plans that are entirely self-contained within the USA (e.g. save Boeing, or get someone else like LM to buy Boeing, or get someone like LM to set up in competition to replace Boeing, etc) are slow. During that time, it’s almost inevitable that Airbus would be able to make themselves into a global monopoly, and the market may do that for them anyway.

        This would be especially so if the US plan was to replace Boeing; the Boeing order book would get cancelled overnight by customers, and Airbus would have to bring in riot control to manage the queues at their Toulouse office.

        And as things stand, any US plan to preserve its position in the airliner industry that falls short of “total, guaranteed certainty” is likely accelerate Airbus’s journey towards being a global monoply, whether Airbus likes it or not. The phrases “total, guaranteed certainty” and “fast” are unlikely to be combined together in a save-Boeing plan. Any perceivable implausibility to a “save Boeing” plan could simply panic Boeing’s customers further, and cause the rush to Toulouse to get more urgent.

        So the USA may do better to plan for a future when there is only Airbus.

        Airbus almost certainly won’t enjoy the experience of becoming a global monopoly, whether by accident or design. Having US Gov blessing to become a global monopoly would be a great comfort, and I’d guess that a deal to set up in the USA in a much bigger way, increase US jobs, transfer of designs, etc, could be reached fairly easily. An orderly and accelerated build up of Airbus’s operations in the USA with US Gov backing would be far, far preferable for everyone around the world than a disorderly US exit from the industry, is about the only thing that’d stop the Chinese filling a Boeing-shaped hole, and is probably the only plan that is likely quick(ish) and certain.

        I don’t know what conditions it’d take to make it clear to US politicians / government that Boeing was a lost cause and to consider such a strategy, but Boeing are laying on a fair few reasons for them to reach such a conclusion. It’ll be very interest if the FAA does withdraw Boeing’s production certificate; will the politicians back up the FAA? Won’t they?

        I’ve not mentioned engine manufacturers. If Airbus did become a global monopoly, they’d likely have to open up more of their airframes to GE. What actually matters (from a healthy competition point of view) is that the engine manufacturers compete and progress.

        I think this makes sense. What we’ve effectively seen in Boeing’s demise is that there is no longer enough fat in fuselage / wing systems design to be able to make market-changing advances. That game is effectively done, and it’s reached a point where allowing continued competition in “who can make the cheapest fuselage / wings?” may now be counter to the safety goals of the entire industry. Boeing clearly cannot as a listed company do it safely any longer in the USA corporate environment. There’s room for small increments, but no one is going to steal the market by making a fuselage 1kg lighter than the other guy.

        Letting Airbus become a global monopoly would be a simple acknowledgement of that fact. But there’s still fat in the engine design, so let the improvements come from engine manufacturers.

        • Sorry, why does airbus have to get more deeply involved with corporate America (design transfers, GE etc) when it’s corporate America that has screwed Boeing up?

          If Americans want to fly safe aircraft 7000 miles, they’ve no choice but to accept buying an aircraft produced under a less “profit at all costs” business model.

  8. Does Boeing get a choice on whether to negotiate? If the DoJ determine Boeing is in breach and will proceed with prosecutions and Boeing disagrees with this, I guess Boeing could sue the DoJ under the terms of the agreement? I kind of feel, good luck with that!

    The whole point of DPAs you are very humble for a period of time, do everything that’s required of you and get out from under the threat. That Boeing hasn’t done any of this is another charge against Calhoun

    • not a lawyer- but Civil acts are about $$$$ and criminal acts are about $$$ and 3 hots and a cot but often in a minimum security situation like Lompoc Gardens with white fences and a cattle guard.

      And to get there, usually requires a trial or a guilty plea of some kind ( a least according to long standing ‘ law’ and that old document called the constitution )

      IMHO- the chances of finding Calhoun in a Martha Stewart style decorated facility are slim to none. At best a minimum clawback, and a 100K fine. But the Janitor ( er lamb) ” 20 years in SuperMax ” as an example for the grunts..

    • Prosecutor that had created the DPA joined Boeing’s law firm shortly after the DPA went into effective. So yes, I think will Boeing will get a chance to negotiate – something like „does this nice corner office and cushy job is enough to make it go away, or do we need to drain then slush fund a bit more?”


    • That should be a suddenly reduced heat count.

      Diluted would be adding more bodies to existing.

    • True enough, but ask yourself if any company under any leadership could be healthy if 80% of its revenue came from Boeing and was whipsawed by the Max disasters and covid shutdown.
      Look at what Boeing has done to Spirit and other suppliers over the last decade or so:
      1. Took their profit margins by forcing them to cut prices 15% under McNerny’s “Partnering for Success” program.
      2. Increase payment time from 60 to 120 days, meaning Boeing gets to use Spirit’s money for 4 months free of charge.
      3. Suddenly drop production rates due to the Max crashes
      4. Drop production rates again due to covid
      Conclusion: if Spirit is on death’s door it is largely because Boeing put it there.
      Remember that Boeing sold off Spirit in 2004. Why? Because CEO Stonecipher had the acronym “RONA” tattooed on his knuckles!
      What a wingnut!
      He and Calhoun are cut from the same cloth. Both are from the GE Jack Welch cult.

  10. One of the most daunting task of the new CEO, if they ever find one willing to take the challenge, will be to restructure the company. But not necessarily under protection of the law. It can be done before the situation further deteriorates. What I am getting at is that in order to save Boeing a split between civilian activities and the rest of the company will likely be required. That would be an elegant way of bringing back the headquarters of the company to the Seattle area. As for military and aerospace activities they can stay where they are and operate under a different name. As it is right now Boeing is not only too big to fail but is also too big to handle for one person and therefore needs to split.

    • Normand:

      That is why you have divisions. You get a good CEO who then appoints Presidents who have the authority withing their divisions to make them work.

      Not sure if you are suggesting a breakup or what, but having a defense side is not an issue. Its how well run things are. Its not about the size its about slowly liquidating the company one CEO at a time.

      That is the issue and that is what has to stop. P&W spent tons of money on the GTF and had the Corporate Support to do so (at the time part of United Technologies)

      That truly was support as breaking into the market for Single Aisle engines was not considered possible and they were out of the big engine game.

      I continue to say it, Boeing has the pieces to work, it does not have the management needed to make those pieces work and until it does, it keeps going downhill and at some point non recovery.

      What the US Government would do at that point is a major open question. Like the Auto Industry in the crash of 2008, it was not about the robber barons, it was about the people who made cars and parts and actually paid taxes.

      China is bailing out its housing industry right now for the same reason. While that industry is 20% of the economy and that is huge, its also the savings for the citizens and failure there becomes beyond massive.

      Boeing has the pieces, it won’t be what it was as co equal to Airbus in the Single Aisle arena and that means number 2 and not all that close.

      But as long as you are number 2 you still have a very good business. You are a success away from getting to be a pretty good Number 2.

      Airbus has its issues as well, the A220 continues to be a mixed bag. Spirit is in distress and Airbus is going to have to buy it out and the whole complex is a package deal. Then at some point they want to make money on it.

      With its non Airbus control concept, you no longer have that easy move between types. Boeing MAX does not either, but……….. its all one series not two or three (depends on how you assess the A320/A321 as the A321 really is a A320-500.

      And Airbus defense side is not as robust as Boeing.

      Boeing executing in defense is the same aspect. Its got the stuff. I should dump the Space business for sure. Satellites should be on the table. Anything that takes resources and attention that is not a good return should be dumped.

      The core to be kept is the KC-46A, T-7, P-8, P-7 (Wedgetail), Chinook, AH-64, F-15EX, F/A-18. The munitions programs should be looked at and determined if they are to be kept or sold off.

    • I’d love to know how Boeing defines the verb “expect”.

      I suspect that “fantasize” or “blindly assume” would be more accurate in this context.

      • With Calhoun the vote goes for Fantasy.

        He has not only failed but failed miserably. Talking heads at the top and nothing effective where people actually make things and sell for money.

      • No wonder Airbus is ramping up the A350 rate to 12 p/m.

        One wonders who’ll be the first to leave the sinking ship: Lufthansa, Emirates or Cathay? The new Chair of Qatar also seems to be “not amused” by the ongoing delay, so he might also be a candidate for a jump.

    • A fun fact about any program still in development is that the company does not have to set an accounting block until certification. Is Boeing going to take a forward loss upon certification or set an accounting block that is pure fantasy?

  11. Holding Inventory

    This is a killer for Boeing. After a quick search by line number at Planespotters, reveals the following airframes in production:


    There are more. Many more.

    5+ years old, sitting in Renton. Until they are delivered, they not only depreciate by the day, they not only cost money to upkeep and store, but they also cost the company in interest expense because Boeing is borrowing billions and none of the money they have in their bank account…is theirs.

    What a way to run a business.

    • I hear all those ill-starred 737MAXes are going to be delivered posthaste; any day now. China especially is champing at the bit for those very fine, unfairly maligned aircraft. After all, “China needs Boing”. 😉

      what an outfit.

    • So, a whole load of the corroded, ex-China junk out in the parking lot is finally being offloaded to India — no doubt at a stunning discount (to compensate for its age and state).

      Weren’t we told just a few months ago that deliveries to China were on the cusp op re-commencing? Gosh…that panned out well.

      Poor Air India: I wonder if it now regrets signing up for these wrecks?

      • If you take a look at the Planespotters production list for the 737Max, there’s a whole bunch of NTU’s and an even larger group of On Order’s. Quite a few indicate Not Built, which I think means that some parts were ordered and received (given the long lead times), line numbers/production numbers were assigned and then airlines walked away from them.

        I hope they have a really good Inventory/Logistics person working the task.

        I would imagine that until all the inventory backlog is cleared & delivered and airlines get aircraft solely from the production line, there’s a good chance that jet’s being made contain parts that have been ordered for other aircraft, been put on the shelf, then dusted off and installed on yours.

        All those people who said that planes built and inventoried would one day turn into a pot of gold, when deliveries restarted were delusional.

        They have only cost BA money.

        • I wonder how many (penalty-free) cancellations we’ll be seeing in the coming months…I suspect quite a few.
          Who wants to take a MAX, knowing all the shortcuts and shoddiness that have come to light in recent months? It’s essentially Russian Roulette.
          If the canceling parties insist on receiving their paid deposits in cash (as opposed to discounts on other Boeing products), then Boeing will be forking out (at least) $5M per canceled MAX. That will make a nice dent in the balance sheet.
          I wouldn’t be surprised by 787/777X cancelations, either.

          I don’t buy the continuing narrative that all is well as regards flight demand…there are multiple cracks appearing in consumer (and producer) spending. Airlines may soon regret their profligate ordering sprees of late.

  12. The best period for Boeing were the post-war years, right until they sold its soul to MD (McDonnell-Devil). Except for the early years of that period Boeing was then mainly a civilian aircraft company. Instead of buying back shares Boeing should now buy back its soul and get rid of its military division (MD). But the latter goes hand in hand with space activities because both depend on government contracts. It’s a totally different mind game than dealing with airlines. Boeing no longer needs to have diversification because it’s in a duopoly and nowadays there are practically no downturns in commercial aviation because the backlogs far exceed the duration of any downturn. In other words they will never run out of orders and will only face slowdowns once in a while. The essence of what Boeing is (or was) has been diluted by its other activities that are a major distraction from its core business, which is to cary people safely from one place to another.

    • To get rid of Calhoun they would first need to find a replacement. I suspect they can’t because no one wants to work with them since all the board’s members think like Calhoun. What is needed is for the shareholders to replace the entire board. But again they can’t because they themselves think exactly like the board does. It’s an incestuous circle.

    • from Yahoo
      “Shareholders also approved a nearly $33 million executive pay package for Calhoun, covering work done in 2023. The figure exceeded Calhoun’s target compensation of $25.5 million.”

      • Makes you wonder what they (Boing shareholders) know that we don’t. 😉 😉 😉

        • the real votes comes from the airline carriers……..let’s wait and see if there are any new orders before Calhoun leaves CEO office

          • The stunning tally for April:
            7 orders
            33 cancellations

  13. The so called shareholders have me truly baffled.

    This gets into an some murky arena. The guy is responsible for a debacle that is verging on unprecedented.

    And they want him on the board? Clearly its corruption or the good old boy network but that is beyond my understanding.

    Does the Mafia control the shareholders? Literal or figurative.

    • I think the shareholders are behaving rationally, and not that different from someone who buys Bitcoin, or the real classic – tulip bulbs. What is anything worth? It’s what a willing buyer and a willing seller can come to terms on. This may or may not have anything to do with utility or some other reasonable measure of intrinsic value. Let’s say that the current Boeing shareholders are very much aware that as the object of a takeover by Lockheed, that the company has a huge negative equity, and actually had no interest in buying the business, only its assets. If that were to happen in a court supervised liquidation, the shareholders would get nothing. So, the strongest interest of the shareholders is to retain the current management team and keep the company out of receivership as long as possible. That way, they can either exit softly, or be made whole if the Fed just pumps in more money directly (the new fad in corporate bailouts). They know that Kathy Jennings (the AG for the state of Delaware) is not going to force the company into receivership. And, the current dysfunctional Congress is not going to intervene until the doors actually close due to an inability to meet payroll.

      It’s critical that Jerome Powell not authorize any more advances, if the process of rebuilding is to begin. Will he? And if so, how many, how much, and for how long? Meanwhile, the shareholders are betting that the juggling act will continue because from their point of view, they have no choice.

      • The shareholders are mostly institutions.

        They all have analytical divisions that assess things like Boeing and its up or down. Yea, some are simply going to be bad or stupid or both, but not all.

        Boeing can’t pay dividends. It can’t do share buy backs. And has not done so since Covid hit.

        These are not Tulip investors or Bit Coin riskers. And 50.1% at least go with the person who failed miserably in what he was supposed to accomplish.

        For the Government to intervene, Boeing will have to go bankrupt. That means all those shares are toilet paper.

        I don’t believe that.

        The stock keeps going down, not a crash but drifting down.

      • RTF

        That makes some kind of sense, though anything other than buying time to enable a soft exit (i.e. sell the shares at some sort of price to some other mug who hasn’t been reading the papers recently) seems unlikely.

        I can’t see the US gov giving the company sufficient money for it to be able to pay out a handsome dividend, just like that. There’d probably be strings attached to the money, and they’re likely to want to see some sort of progress in the health of the business. So, the shareholders would probably have to knuckle down and get on with saving their company, if they were chasing public money.

        The reason I think that the shareholder strategy is irrational is that it boils down to a practical test of the maxim, “Boeing is too big to fail”. The problem is that what counts is having too big a market share to fail, and one has to measure market share by deliveries, not the order book.

        So, when judging the shareholders’ strategy it’s not a question of “is Boeing is too big to fail?”, or even “is Boeing is too weak to succeed?”. It’ll become (if not already) “is Boeing is too irrelevant to care about?”.

        In effect, Boeing is in a terminal fight to remain relevant and is losing. As it is a fight for relevance, the personal and corporate behaviours of the shareholders then really, really matters. So, what signal does reappointing Calhoun send to Boeing’s customers? How are folk such as Tim Clark or Michael O’Leary supposed to receive the news that Calhoun is still around? Unbridled joy? I think not.

        Irrelevancy beckons.

        • Anyone who regularly watches CNBC will see endless, hyped-up, forced euphoria with regard to the US economy / Wall Street. The almost obligatory credo is that the US economy is forging ahead at record strength — despite all sorts of warning signs, e.g. relating to credit card debt, pawn loans, deferred expenditure on big-ticket items, cooling GDP and ballooning deficits. A lot of this “irrational exhuberence” is being fueled by the AI hype. With tons of cash sitting on the sidelines, and a handful of poster-boy (Magnificent 7) stocks now prohibitively expensive, FOMO is pushing investors to jump into other stocks. Prof. Jeremy Siegel recently likened this to an uninformed mob trying to jump on the “momentum train” — in the hope/assumption that they’ll all make a tidy profit before the train hits a wall. Essentially a huge version of Musical Chairs.
          Even a dead-end stock like Boeing is profiting from this effect. So is Gamestop. So is crypto. So is gold. There’ll come a tipping point — e.g. a failed Treasury auction, or disappointing outlook from Nvidia — and the show will then end very quickly.

  14. There is no ethics in Boeing they do what they want and get away with it. Both on the military and commercial side of building these aircrafts They have been taking parts off of aircrafts and putting them on another get inspection and then remove the part and move it down the line because the manager wants to make his money. Now we are going to give Calhoun a pocket full of money for doing nothing but destroying the company and he gets to live the good life. That’s the definition of insanity.

  15. The subject of Scott’s article is all of the battles Boeing is now fighting, versus:
    1. IAM
    2. SPEEA
    3. Firefighters
    4. DOJ
    One characteristic of the GE-Welch management ethos is combativeness, even to the point of irrationality. These guys pick fights even when some kind of peaceful accommodation would be in their own self interest.
    Is their top priority maximizing profit ( a rational objective) or is it inflicting as much pain as possible on suppliers, employees, labor, airline customers, etc, etc.
    It’s like the CEO wakes up in the morning thinking, who can we kick in the nuts today?….and if a few planes get built in the process, that’s just a bonus.

  16. “Who was John Barnett? Chilling suicide note of Boeing whistleblower revealed”
    (Source: New York Post)

    ““I can’t do this any longer! Enough! F*** Boeing,” New York Post cited the note penned by Barnett before he killed himself in the front seat of his Dodge Ram truck.”

    ““America, come together or die!! I pray the motherf***** that destroyed my life pay!!! I pray Boeing pays!!! Bury me face down so Boeing and their lying-ass leaders can kiss my a**,” he wrote.”

    “Barnett hit the headlines after he raised concerns about Boeing’s production standards, alleging issues with the aircraft’s oxygen systems. The company has denied Barnett’s allegations, claiming that “safety, quality and integrity are at the core of Boeing’s values”.”


    With all that we’ve found out in the past few years, it’s hard to imagine that Boeing still expects the world to believe that “safety, quality and integrity are at the core of Boeing’s values”.

    • Boeing is also increasingly in a negative spotlight because of its arms sales to Israel. This may see Muslim-majority countries move away from doing more business with Boeing. Keep an eye on coming Turkish and Saudi orders, for example.

      Also wouldn’t be surprised to see Iran ordering new Chinese helicopters some time soon.

      • And on that subject:

        “RIYADH, May 20 (Reuters) – Saudia Group, owner of Saudia airline and budget carrier flyadeal, placed a hefty order for 105 Airbus narrow-body aircraft on Monday, marking a bounce-back for the European planemaker just months after Boeing had been tipped to win more Saudi business.

        “Ibrahim Al Omar, Saudia Group’s director general, described the order for 12 A320neo and 93 A321neo single-aisle aircraft as the largest in the country’s history.”

        “In November, Saudia Arabia’s newest airline Riyadh Air said it was weeks away from placing a large narrow-body order, which Bloomberg News reported involved the Boeing 737 MAX.”

        “Months later, no such order has surfaced, and Monday’s announcement placed Airbus firmly in the spotlight.”

          • It can be considered to be a lot of things…personal (Calhoun), corporate (sick company), and geopolitical.
            Either way, Boeing is going to (continue to) suffer as a result.

          • Like Saudia Group cares if Boeing CEO gets a pay package?

          • @ Williams
            Saudia cares that a crowd of incompetent, indifferent clowns keep running the show, thus risking continution of all the QC rot, delays, lack of certification, etc.
            You think airlines don’t take note of stuff like that?

          • Airlines have made it known they do not like the management of Boeing and their ineptitude.

            That alone is a reason to order from Airbus. Again, like they care what the Boeing CEO pay package is, they don’t.

          • No wonder UA was recently able to secure a bunch of extra A321neos at short notice…

          • “Thanks all the same, but we’ll wait for good product from Airbus.”

          • I guess also Airbus oversold like 20-30%.

      • When you take a stand you sometimes get burned. Geo Politics is fact of life.

      • Why would Iran wait this long to order Chinese helicopters? Iran easily has the money and it isn’t like many nations are NOT breaking the embargo. How do you think Iran is getting weapons?

        • Iran has a huge domestic weapons industry — it’s a net exporter (as opposed to importer). It’s even developed its own hypersonic cruise and ballistic missiles (various models).

          As regards helicopters: better to wait until it’s a member of BRICS (which it now is) to facilitate payment by means other than oil barter. Via NDB/SCH/CPSS it can now just pay in its own currency. Plus: China has just recently introduced some new helicopter models…so there’s now more choice.

          And why shouldn’t countries ignore the “embargo”? It doesn’t come from the UN…

          • That is the point, if Iran wanted to upgrade to newer helicopters, they could have years ago.

  17. I used to be very sceptical about the COMAC project. After watching that video, my doubt is dwindling…

  18. Airbus: The A321 was 7% of the Airbus’ A320-family backlog in 2011. Today, the A321neo is 69% of the backlog.

      • I wonder what Boing will net- if anything- for all those produced but long-term stored 737MAXes.

        • Net? It’s a negative. It’ll only provide a little bit of cash as they deliver them.

  19. Airline capacity is up and fares are down??

    WaPo: “For June, July and August, domestic airfare is averaging $305 a ticket, a 6 percent drop…”

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