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Even More Bad News For Boeing

Say Contributor

Boeing announced yesterday that the fall-out from its 737 Max crashes will cost the company at least $7.3 billion, and possibly more. Grounded In the wake of the crashes of two different 737 Max models, which lead to more than 400 deaths, Boeing had to take the plane out of the air and halt production of the popular model, which may not fly again this year. Rectify Airlines that flew the 737 Max have been pushing for compensation, and Boeing estimates that this will cost $5.6 billion. Furthermore, the company expects the production slowdown to cost an additional $1.7 billion. This is all in addition to the $100-million dollar fund the aviation giant pledged to create for the family of victims of the crash, which many critics feel just isn’t enough, as well as possible further litigation down the line. As you’d guess, this is a big hit even for a company the size of Boeing, as these costs are expected to affect the profitability of the Max program. Hot Water This is just the latest bad news Boeing, following reports that whistleblowers’s attempts to alert investors to safety flaws in the Max 737 were ignored, and after consumer advocate Ralph Nader wrote the SEC to call for Boeing's board to include more commercial aviation experts. In response to this debacle, 34% of shareholders recently voted to break up CEO Dennis Mullenberg dual roles as chair and board—so that long-term strategy and day-to-day operations would be separated—but the measure wasn’t enough to pass. -Michael Tedder Photo via Adobe