Boeing’s shareholders sue it for fraud over 737Max

A group of Boeing shareholders are suing the manufacturer for fraud having lost millions in share values over the last few weeks.

Their case is based around the fact they believe they can prove Boeing deliberately withheld safety information, which if revealed, would have impacted their investment decisions. They claim that Boeing persued profits in a way that was reckless and endangered lives.

The 737Max case is now looking to be the most financially damaging in the company’s history and the public relations aspect is considered a disaster.

Some analysts are looking at the 737 Max costing as much as $35 billion in lost revenue, court claims and compensation. That figure will hang over the company over several years. While it seems a lot of money on an individual basis, it’s relatively minor, amortised over years and will do little to the company long term.

What Boeing cannot now afford is another mistake – any more issues with the 737 would be a catastrophe, anything found to be wrong with the new 777 would be a calamity, one crashing in service would have repercussions beyond imagination.

The question is how does Boeing and the FAA deal with future certification? Carry on as they are? Be open and honest internally and listen to prevent potential problems, without letting commercial pressures force an issue? Or suppress everything behind a veil of secrecy?

How they decide to move on will make the difference.

Advertisements