Boeing Stock Grounded After CEO Testimony To Congress: ‘Issues Before Us Today Have Real Human Consequences: Life And Death’ (UPDATED)
Editor’s Note: Additional information has been added to this article.
On Tuesday, The Boeing Company (NYSE:BA) CEO David Calhoun testified before the Homeland Security & Government Affairs subcommittee on investigations sharing more on the shortcoming of the company and what comes next.
What Happened: Subcommittee chairman Sen. Richard Blumenthal (D-Conn.) said Boeing is making leadership changes that look more like musical chairs. Blumenthal called this a “moment of reckoning” for Boeing.
Blumenthal recognized the family members of several airline disasters in attendance and the family members of one of the Boeing whistleblowers who committed suicide.
“The issues before us today have real human consequences: life and death,” Blumenthal said.
The chairman called Boeing a once iconic company that has lost its way and took shortcuts that caused two preventable tragedies that put production speed over safety.
“Stock price over people.”
Blumenthal said there is “mounting evidence” against Boeing brought forward by whistleblowers and encouraged more whistleblowers to come forward.
“These are chilling allegations.”
Blumenthal encouraged Boeing to stop thinking about the next earnings call and start thinking about the next generation, adding that “we want Boeing to succeed.”
Related Link: Boeing Testimony Before Congress Comes As Several Members Sold Shares Of Aerospace Giant
Calhoun Responds: In his opening remarks, Calhoun addressed the families of victims present in the room and said he’s sorry for their losses. Calhoun said the company will right the wrongs in their honor.
The Boeing CEO called commercial aviation the safest mode of transportation and shared details on how the company has moved past recent tragedies. Calhoun called the commercial aviation sector an industry where “we simply must get it right.”
Calhoun said Boeing took responsibility and has cooperated in all investigations.
“We took immediate action,” Calhoun said.
Calhoun said the company does not retaliate against whistleblowers and encourages them to come forward.
“It is our job to listen,” Calhoun said, adding that the company is committed to moving forward.
The Boeing CEO was asked if the company has done enough to date to fix the safety issues
“We have revamped our engineering process,” he responded.
Calhoun was unable to provide a number when asked how many whistleblowers had been fired or disciplined by the company. The Boeing CEO also said he has not spoken to Boeing whistleblowers directly and agreed with a suggestion that he should.
Calhoun emphasized the company’s commitment to safety, saying, “Safety and quality, that is what we talk about.”
Meanwhile, Sen. Josh Hawley (R-Mo.) said it was a “travesty” that Calhoun is still in his job.
“Why haven’t you resigned?” Hawley asked.
Calhoun told Hawley he was proud of every action the company has taken. “I’m sticking this through,” he said.
Hawley also raised the issue of Calhoun’s $32.8 million annual compensation, questioning whether the Boeing CEO’s pay is based on metrics like transparency, safety, and accountability. Calhoun confirmed that his compensation is indeed linked to these factors.
The meeting, which lasted about two hours, involved intense questioning, with Calhoun often struggling to provide satisfactory answers.
BA Price Action: Boeing shares closed 1.95% lower at $174.99 on Tuesday, versus a 52-week trading range of $159.70 to $267.54. Boeing stock is down 33% over the last year and down 18% year-to-date in 2024.
Read Next: Boeing Heads To Space: Could NASA Deal, Starliner Help Fend Off Airplane Segment Weakness?
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