Thank you. Sounds risky to me, but many companies do take that option. I certainly wish Boeing the institution all the best, and hope it can recover its pre-McD/D reputation and "engineering-first" culture.

I'm sure I'm a "stockholder" by way of various mutual funds, but I haven't been counting the pennies. I just would like the company to get back to being as respectable as most of the people on the assembly floors and in the design offices.

On occasion lawsuits against big corporate entities hold significance because of the impact the litigation is likely to have on other aspects of the corporate entity's business prospects and even its existence.

The court's opinion tells the story of the 737 MAX in what might be - up to this point - pretty unique way. Recall that the plaintiffs, suing in the form of derivative action on behalf of the company, had obtained volumes of company documents and records prior to filing the "complaint" that is the basis of the court's decision. To indulge posters who wish that lawyers would just go away, and presumably would be willing either to fend for themselves in whatever form of legal and court system might obtain (or in the absence of any such system), I'm not using the formal nomenclature of this pleading here. But...

It actually is important to note that it is a "Verified" complaint. Unless Delaware law (I'm not licensed in that State, hence the caveat) contains some quirky wrinkle, when the complaint is "Verified" it means the parties filing it have sworn, under penalty of perjury - just like on the witness stand at trial in open court - to the truth of the factual assertions stated in the complaint. In other words, this is a significantly more advanced foray into the sordid facts of how badly Boeing went astray than the more familiar kind of complaints which are filed mostly just to get the courtroom process started.

I have to wonder, though, about how this Board "should" have considered the question of "safety" as that term has gained the prominence it now holds in this case. In an earlier client engagement of mine, a senior official of the entity was fond of remarking how much it irked him when the Board members wanted to get involved in "how the grass was getting cut" - the entity wasn't a golf course or anything where it would matter to the fundamental direction of its existence. Here, the right answer can't possibly be that the Directors were supposed to be quadruple, quintuple, x-multiple-guessing the evidently vast corporate bureaucracy responsible for deriving yet one more version of that venerable old workhorse airplane, "the" 737.

Isn't the better understanding of what the Boeing Board failed to do, that it failed to structure and direct the management of the business so to assure a very high degree of fidelity to all applicable regulatory and safety requirements, with a margin of safety to spare? I mean, several derivatives into "the" 737 is it realistic to envision any director, let alone the Board in a formal way, saying, "but will it be safe? Are airplanes ever safe? Sometimes there are crashes, you know." The notion that a derivative, the next derivative in what had become a very long line, was either safe or unsafe seems a bit, well, simplistic.

Maybe it's unfair to see the prominent role "safety" has claimed as the equivalent of requiring the board to question fundamentals of aeronautical design, calculations of lift and drag, intricacies of how synthetic airspeed might interact with possibly conceivable in-flight instrument failures and emergencies, at such an organic level.

In any event, with the changes made by the legislation hammered out by Rep. DeFazio's (excellent) Committee, oversight of Boeing not only by FAA, but by the professional staffs on Capitol Hill, and increasingly by other regulatory authorities especially in Europe, isn't going back to sleep at the switch. The progress of this shareholder lawsuit in Delaware, and the revelations that could yet occur, very likely will underscore the importance of implementing that legislation and doing so effectively, regardless of partisan political games being played. But please, no one need refer to "safety infrastructure."

Who ultimately green lighted the MAX program? That decision to proceed must have contained important caveats as to time lines and approved maximum spending. These were obviously fatally flawed so is the board responsible for incentivizing a corporate culture of cheap over safe and fast over good or is the problem centred in the C suite ?

WillowRun 6-3

If that's a roundabout way of saying that safety should never be a Band-Aid, but rather the lifeblood that courses through the veins of any company making things that can kill people, then I suspect few would disagree.

DaveReidUK

Thanks for articulating that point, though I wasn't trying to suggest there is much disagreement with regard to the intrinsically fundamental nature of "safety" for an airplane manufacturer.
(That said, we could summarily describe what the company did in the case of the 737 MAX as indeed putting a Band-Aid on a fatally flawed aircraft type variant.)
What I was trying to get at, is the idea that the particular engineering, design, and flight operations details about the flaws in the MAX - which obviously implicate safety of the aircraft - would not be subjects the Directors ordinarily would be expected to be deeply knowledgeable about. These subjects all are delegated to managerial ranks and their staff cadres. To draw on my Board experience, a trustee of a university viewing a presentation about expansion of a degree program wouldn't ask the presenters to justify and explain why specific pages of assigned reading are listed on a course syllabus for the degree program (if the syllabus was even tabled to start with).
So the failure of the Board here to drill down from the level of production plans, revenue projections, customer order statuses and so on, to particular detailed workings of - say - number of AoA sensors for anything being included that might bear resemblance to how stability matters were addressed in the KC-46 tanker -- such failure isn't the same as not having a focus on and oversight of safety.
But it is a failure to direct management. I'm not defending this Board (and while I give Kirkland its due, is this why any of them went to law school?).
A university trustee shouldn't ever have to ask if course syllabus content is being done right. Continuous attention to current matters in Academic Affairs should give enough sense about these occasional concerns. Of course building airplanes is much, much different than teaching college students. And much more difficult......but I hope the Delaware court gets more focused on the specific information flows the company's board failed to elicit. Not just "safety" as a broad overall category.

Big Pistons Forever

It might be worthwhile remembering why Boeing launched the MAX.
Boeing didn't really want to do another 737 and was working on a completely new 737 replacement - I knew people who were on the program. But, when Airbus launched the A320 NEO series, it caught Boeing with their pants down. There were two major problems with launching a brand new 737 replacement to answer the NEO - first off Boeing was still struggling to get the initial 787 and 747-8 aircraft certified and into service - the engineering resources to launch an all new aircraft simply were not available. Second, launching a new aircraft means a bare minimum of 5 years from launch to entry into service - probably quite a bit longer (and that's without accounting for the engineering resource shortage). Worse, it takes time to ramp up the build rate of a new aircraft - and at the time they were pumping out 737's at over 2/day, a rate that would probably take another five years from EIS to achieve. So, basically conceding the massive single aisle market to Airbus for about 10 years. Now, ten years later with the benefit of 20-20 hindsight of what happened, that doesn't look so bad. But at the time, conceding that massive market - several thousand aircraft - to Airbus was simply unthinkable. Hence the scramble to come up with the MAX.

And Airbus scrambled to meet the CSeries performance with the neo ending up owning the A220.

The A220-300 basically killed sales of the A319neo, but it does not compete with the A320neo and A321neo. Airbus was also more than happy to use the A319 production slots tot produce more profitable A320's and A321's.

Wall Street Journal reporting (article by Dave Michaels and Andrew Tangel) that former chief technical pilot, Mark Forkner, is expected to be charged criminally relating to his role in the development of the 737 MAX. The article does not identify what specific charge or charges are expected to be filed.

Among several factual items (familiarity with which is now presumed, among those following the sordid tale of the MAX) supporting a decision to charge - according to the article - are the explicit admissions made by Boeing about misconduct on the part of certain unnamed employees in Boeing's "plea bargain" in federal court in Texas, several months ago. More widely known is the regrettable reference to "jedi mind tricks" played on FAA, of course.

Whether this is part of a prosecutors' effort to "go up the ladder", I won't speculate. Especially after the recent posts here about decisions made by company officers and directors, though, if the employee -- whose job it was to carry out a plan for the MAX where that plan had deep and significant flaws to begin with -- gets charged, isn't it logical to expect serious consideration given to charging also those higher-ups who formulated that plan and authorized and directed its implementation from the start?

You would think so given comments made by employees, managers in big companies though like to sheet the blame for any hiccup down to the lowest on the totem pole.

“This airplane is designed by clowns, who are in turn supervised by monkeys”
“I just jedi mind tricked this fools. I should be given $1,000 every time I take one of these calls. I save this company a sick amount of $$$$.”
“Would you put your family on a MAX simulator trained aircraft? I wouldn’t.”
“I’ll be shocked if the FAA passes this turd.”
“This is a joke. This airplane is ridiculous.”
“Best part is we are re-starting this whole thing with the 777X with the same supplier and have signed up to an even more aggressive schedule!”
“Jesus, it’s doomed.”

I find it interesting that Forkner threw in his towel with Boeing before the two crashes, one wonders his motivation, he knew what a cluster %@*^ it all was and was prescient to what he saw as an inevitable out come?

As DeFazio said. “This is not about one employee; this is about a failure of a safety culture at Boeing in which undue pressure is placed on employees to meet deadlines and ensure profitability at the expense of safety.”

I've heard this view before. But surely Boeing would have known perfectly well what Airbus had in hand. The new engines coming along were a known, and doubtless long offered to Boeing on the same timescale. Airlines would have been approached and received presentations on the plans. Suppliers and vendors serving both would be early in on it. Personnel leave one company and join others, taking knowledge with them. Boeing market research, which they have long been regarded as world leaders in, would surely have been aware of where Airbus were heading. The issue that the new engines readily fitted under the A320 airframe but not the 737 was also long known.

There is a piece by Scott Hamilton at leeham news about this. Apparently, Boeing was in a squeeze by the delays and budget issues with other types and then came the unexpected threat of loosing AA as an exclusive customer.

Everyone in he industry knows since decades that higher efficiency engines mean higher bypass ratio, which means larger fan diameter. So nobody can tell me that this came as a surprise for Boeing.

On those decisions the fish stinks always from the head. You see it in the automotive industry too, that it easier to drag the mid management levels to court on misconduct. While every one knows that expensive decisions (or decisions to save said expenses) will be made by top management. Especial if sums way above 6 figures are involved.

The game at court then played out is who knew what at what time. As if CEOs or top managers get paid for not knowing their trade.

As spronrad notes, the problem was that at that time Boeing was severely resource limited. Remember, the 787 was supposed to be certified and in service in 2008. Not only did the delays on the 787 mean that engineering couldn't be released to work another program, Boeing had tens of billions tied up in program (at one point it was estimated that Boeing had over $30 billion just in inventory costs related to the 787 delays). The 747-8 program was also going full tilt - and also over budget and behind schedule although not nearly as bad as the 787 (and most of the schedule issues on the 747-8 could be traced to our being resource starved due to the demands of the 787). There was barely enough to do what needed to be done to get the 787 and 747-8 certified and into service - forget launching an all new program...

The original plan had been to have a new 737 replacement aircraft ready by 2016 (for a while the development program was called 'Project 2016') - which incidentally is when the first A320NEO was delivered. But the fiasco of the 787 program meant that Boeing simply didn't have the resources necessary to do that - which ultimately lead to the MAX fiasco.

If the Max really is such a boondoggle, one wonders why it nevertheless managed to make a very respectable sales volume with mainstream carriers. Putting the software incompetencies to one side for a moment, the rest of it seems to have formed a very significant sales competitor to the Neo, without the clean sheet development costs. It's like the strategy was right, but some aspects of the implementation were screwed.

How were the airlines to know?
They wanted a product that carried more passengers at less cost. The 737 MAX promised just that.
They relied on Boeing's reputation and the FAA's approval, which had always been sufficient before.
Even their pilots who flew it weren't aware of the safety defects.

As to why is the 737max such a sales sucess, two factors need to be remembered:

1. Airlines which already had 737s had already invested in trained crew, spares, etc. and changing to the A320 would nean new costs.

2. The total number of single aisle aircraft being ordered were far beyond the supply capabilities of Airbus. Two, or more, manufacturers were needed to meet the market demands.

This looks to be an interesting development. Can anyone else shed light?
https://www.seattletimes.com/busines...t-report-says/

See post #29. No doubt more details will emerge in due course.

One wonders where Boeing has wandered off to. In addition to the 737 issues, there have been continuing hardware and software problems with the Boeing Starliner space capsule .