The Boeing Backstory That's Being Overlooked
|the b|e note||Jun 20, 2019|
There’s been much conversation on what’s been happening to Boeing since the tragic March 10 crash of an Ethiopian Airlines 737 Max 8 that killed 157 people. That happening only five months after the same type airplane flown by Indonesian Lion Air crashed killed 189 people. After other countries, namely China, took immediate steps to ground the 737 Max, the U.S. Federal Aviation Administration finally grounded it … but, only after the public optics of taking so long to ground it looked so bad that regulators had no choice. There was an interesting twist suggesting foreign air regulators and investigators don’t trust the American Federal Aviation Administration …
Ethiopia, Indonesia and at least five other major regulators are expected to join the U.S. Federal Aviation Administration’s (FAA) review panel on the Boeing 737 MAX, officials said on Tuesday.
But, it’s interesting how several very related stories and obvious relevant intelligence have not been connected to the 737 Max episode. Reports focus mainly on the grounding of the 737 Max, the near $40 billion hit the company has sustained since the Ethiopian crash, how it’s responded and it’s effort to rebrand ever since, in addition to the fact that the airplane is still in production and is actually receiving orders, with its stock price surging 5.4 percent this week on the announcement. It does not help Boeing, of course, that American Airlines just announced that it’s ordering 50 Airbus - the Europeans primary consolidated aerospace company - A321XLRs. That’s not a good look when the world’s largest airline, American, is purchasing from a European brand versus a U.S. brand like Boeing.
Here’s what Boeing stocks have looked like as of June 20th since the beginning of the year …
Still, what’s been strangely left out of much reporting are six interesting facts:
The FAA has yet to fine Boeing, even though it grounded the 737 Max planes in the U.S. It hasn’t fined Boeing since 2015 (during the Obama administration). It just fined low-cost carrier Allegiant Air $700,000 for unaddressed mechanical problems.
In May, the White House had pressed ahead with announcing its nomination of former Boeing executive Patrick Shanahan as permanent Defense Secretary, just two months after the second high-profile crash of a Boeing civilian airliner and amid worries that Boeing was taking over the Pentagon and had an inside advantage on defense contracts.
Now, take a look at Boeing political contributions since 1990 - and zoom in since 2012 …
Prior to Shanahan announced as DefSec nominee, in March, the Pentagon purchased 78 new F-18 “Super Hornets,” currently the primary attack fighter used by the U.S. Navy and U.S. Marines for a price tag of $4B - days after the Ethiopian airlines incident and after years of intense Washington lobbying by Boeing for lawmakers and the White House to consider botching the F-35 Joint Fighter produced by rival Lockheed Martin in favor of a newly-modified upgrade of the aging F-18 for the Navy and an upgraded F-15X for the Air Force (yeah, that F-15 from the ancient Hollywood hit Top Gun). Shanahan, incidentally, was a constant critic of the F-35, which was plagued by cost overruns.
But, suddenly, just last week the Pentagon announced a $34 billion deal with Lockheed - more than eight times the size of the Boeing F-18 deal - to purchase nearly 480 F-35s.