Boeing employees mocked federal rules, talked about deceiving regulators and joked about potential flaws in the 737 Max as it was being developed, according to over a hundred pages of internal messages delivered Thursday to congressional investigators.
“I still haven’t been forgiven by God for the covering up I did last year,” one of the employees said in messages from 2018, apparently in reference to interactions with the Federal Aviation Administration.
The most damaging messages included conversations among Boeing pilots and other employees about software issues and other problems with flight simulators for the Max, a plane later involved in two accidents, in late 2018 and early 2019, that killed 346 people and threw the company into chaos.
The employees appear to discuss instances in which the company concealed such problems from the F.A.A. during the regulator’s certification of the simulators, which were used in the development of the Max, as well as in training for pilots who had not previously flown a 737.
“Would you put your family on a Max simulator trained aircraft? I wouldn’t,” one employee said to a colleague in another exchange from 2018, before the first crash. “No,” the colleague responded.
In another set of messages, employees questioned the design of the Max and even denigrated their own colleagues. “This airplane is designed by clowns, who are in turn supervised by monkeys,” an employee wrote in an exchange from 2017.
In several instances, Boeing employees insulted the F.A.A. officials reviewing the plane.
In an exchange from 2015, a Boeing employee said that a presentation the company gave to the F.A.A. was so complicated that, for the agency officials and even himself, “it was like dogs watching TV.”
Several employees seemed consumed with limiting training for airline crews to fly the plane, a significant victory for Boeing that would benefit the company financially. In the development of the Max, Boeing had promised to offer Southwest a discount of $1 million per plane if regulators required simulator training.
Boeing has a real mess on its hands. Any future aircraft malfunction already has plenty of evidence of malfeasance ready to be presented in court.
Would you feel comfortable flying a Boeing 737 Max? I know I wouldn’t.
Boeing “expresses regret” about the communications being made public. Err, their PR team told them to say this:
Boeing on Thursday expressed regret over the messages. “These communications contain provocative language, and, in certain instances, raise questions about Boeing’s interactions with the F.A.A. in connection with the simulator qualification process,” the company said in a statement to Congress. “Having carefully reviewed the issue, we are confident that all of Boeing’s Max simulators are functioning effectively.”
“We regret the content of these communications, and apologize to the F.A.A., Congress, our airline customers and to the flying public for them,” Boeing added. “The language used in these communications, and some of the sentiments they express, are inconsistent with Boeing values, and the company is taking appropriate action in response. This will ultimately include disciplinary or other personnel action, once the necessary reviews are completed.”
Boeing depends upon taxpayer dollars more than most corporations.
See for instance:
The top welfare recipient of them all is aerospace giant Boeing, which has operations spread all across the country building aircraft and working on numerous Department of Defense projects. The amount of work Boeing does for the federal government no doubt plays a part in the amount of subsidies the company has been able to secure, but Boeing has also played hardball with local jurisdictions to get enormous tax breaks. With more than $13 billion coming in from 148 handouts, Boeing has thoroughly entrenched itself in the interest of the government and taxpayers.
Despite the immense amount of money the company receives, it has still gone on to hold cities hostage in tax negotiations, threatening to remove jobs and open up shop in friendlier climates. In 2013, Boeing secured the highest ever tax break at the state level when it cornered the Washington legislature into ceding to its demands, lest it move its production plants to another part of the country. The legislature granted Boeing its wish, but Boeing went on to announce drastic layoffs anyway, angering many locals.
According to the Federal Aviation Administration, its decision was based solely on its evolving understanding of the evidence. But critics have suggested that the delay in joining the international consensus may have been the result, at least in part, of the close relationship that Boeing, a major political force in Washington and a large government contractor, has with American officials.
Boeing receives more federal money than any corporation other than Lockheed Martin, its main competitor in the defense contractor industry. Boeing took in over $23 billion in con tracts from the government in the 2017 fiscal year — near its annual average. (Just this fall, the company won a $9.2 billion contract to make a new generation of jets for the Air Force.)
Senator Elizabeth Warren publicly questioned whether the government had “put lives at risk” to protect Boeing’s bottom line. She and a bipartisan group of her colleagues requested congressional hearings to investigate.
In 1940, Congress passed a law barring individuals and firms from making federal campaign contributions while they negotiate or perform federal contracts. The intent was to prevent companies from trying to bribe politicians for lucrative deals and to prevent lawmakers from extorting money from companies with business before the government.
So how do campaign donations that appear to be connected with Boeing manage to avoid violating this law? The answer is a loophole, cemented in the law in the 1970s, that permits government contractors to set up “separate segregated funds,” or political action committees, to make political contributions using money typically pooled from the contractors’ executives and major shareholders. Such funds are legal even if the parent company pays for their operating and fund-raising costs. This exemption — whose ostensible justification is the free-speech rights of contractors’ employees — is why political action committees like Boeing’s can exist.
“It’s a huge loophole,” said Craig Holden, a government affairs lobbyist for Public Citizen who has helped states write pay-to-play laws more restrictive than the federal-level bans.
There is also, in effect, another even larger loophole for contractors looking to influence national politicians: the inaugural committee for a president-elect. Because inaugural committees are technically not connected to the political campaign, “all bets are off,” as Mr. Fischer put it. Boeing gave a million dollars to Mr. Trump’s inaugural committee — a giveaway now under scrutiny as a possible conflict of interest for the president.
Thanks to this maze of loopholes and legal niceties, federal contractors are able to effectively spend or direct the spending of money on political campaigns, despite the original intent of the law against contractor contributions. One clear result of this system is the widespread suspicion, warranted or not, of the government’s initial decision not to ground Boeing’s plane.
Boing and Lockheed Martin and similar companies slurping up tax payer dollars is why Flint still doesn’t have clean water, why college education isn’t basically free, why millions of people don’t have health insurance, and so on. Corporate welfare is like a black hole, distorting our entire economy.
The chief executive of the aerospace giant Boeing downplayed the fallout from the president’s decision to withdraw from the Iran nuclear pact, saying on Wednesday that the company would abide by the Trump administration’s decision to cancel Boeing’s licenses to sell $20 billion of aircraft to Iran.
“We will continue to follow the U.S. government’s lead,” Dennis A. Muilenburg, the chief executive, told a luncheon crowd at the Economic Club of Washington.
Craven. Is there any other word for it? $20,000,000,000 is a rather large contract, wouldn’t you say?
I wouldn’t be surprised if Boeing has had discussions with Michael Cohen for a “consultant” deal, like AT&T, Novartis, or Korea Aerospace Industries. I wonder if Boeing agreed to it? I’m guessing they did not, and thus Trump has gone out of his way to antagonize Boeing.
Double Rainbow Over Boeing
3rd World Man:
Among the other payments to Mr. Cohen’s company described in the financial records were four for $99,980 each between October and January by Novartis Investments S.A.R.L., a subsidiary of Novartis, the multinational pharmaceutical giant based in Switzerland. Novartis — whose chief executive was among 15 business leaders invited to dinner with Mr. Trump at the World Economic Forum in January — spent more than $10 million on lobbying in Washington last year and frequently seeks approvals from federal drug regulators. Novartis said in a statement that its agreement with Essential Consultants had expired.
In addition, Korea Aerospace Industries paid Mr. Cohen’s company $150,000 last November, according to the records. The company, an aircraft manufacturer, has teamed with the American defense contractor Lockheed Martin in competing for a multibillion-dollar contract to provide trainer jets for the United States Air Force that is expected to be awarded this year.
Boeing was hit Wednesday by the WannaCry computer virus, initally raising fears within the company that it could cripple some vital airplane production equipment.
Mike VanderWel, chief engineer at Boeing Commercial Airplane production engineering, sent out an alarming memo calling for “All hands on deck.”
“It is metastasizing rapidly out of North Charleston and I just heard 777 (automated spar assembly tools) may have gone down,” VanderWel wrote, adding his concern that the virus could hit equipment used in functional tests of airplanes ready to roll out and potentially “spread to airplane software.
Couple that with reports that a trade war with China is going to hit Boeing hard, not a good time to be Boeing.
The NYT reported:
Much of the Dow’s underperformance can be traced to the aircraft maker’s stock.
The Trump administration’s trade policies have hit Boeing, the most-heavily weighted stock in the Dow, particularly hard.
Aluminum makes up about 80 percent of the weight of most commercial aircrafts, according to Brooke Sutherland and David Fickling of Gadfly. That means tariffs on imported aluminum would likely raise Boeing’s costs more than its competitors. Boeing also views China, the main target of the Trump administration’s protectionist trade policies, as an important growth market. The country is set to overtake the U.S. as the biggest aviation market by 2022, Ms. Sutherland and Mr. Fickling write.
China could target Boeing if the country decides to retaliate against the U.S.
On Wednesday, Boeing hosted Chinese President Xi Jinping at a tour of its widebody commercial plane factory in Everett, Wash. Concurrent with the visit, Boeing announced that it has finalized agreements to sell 300 aircraft to various Chinese customers — and to open its first factory in China to complete assembly of 737 airliners in particular.
The planes Regarding the airplane sales, Boeing announced the finalization of orders for $38 billion worth of airplanes (at list prices), including:
50 widebody jets, of models not named, to be bought by Chinese airlines (also unnamed). 190 single-aisle 737s to be bought by the same group of airlines. 60 more 737s to be bought by the leasing arm of Industrial and Commercial Bank of China and by CDB Leasing. Boeing did not clarify how many, if any, of said 300 airplanes may have already been entered into its order book under previously announced “firm orders.” Tellingly though, Boeing’s latest plane order update contained mention of not 300 new firm orders, but just two — and not for 737s, but 787s.
Damn, that sounds like a pretty serious, life-threatening bug. If I were a stock trader, I’d be shorting Boeing right about yesterday…
The US air safety authority has issued a warning and maintenance order over a software bug that causes a complete electric shutdown of Boeing’s 787 and potentially “loss of control” of the aircraft.
In the latest of a long line of problems plaguing Boeing’s 787 Dreamliner, which saw the company’s fleet grounded over battery issues and concerns raised over possible hacking vulnerabilities, the new software bug was found in plane’s generator-control units.
The plane’s electrical generators fall into a failsafe mode if kept continuously powered on for 248 days. The 787 has four such main generator-control units that, if powered on at the same time, could fail simultaneously and cause a complete electrical shutdown.
“If the four main generator control units (associated with the engine-mounted generators) were powered up at the same time, after 248 days of continuous power, all four GCUs will go into failsafe mode at the same time, resulting in a loss of all AC electrical power regardless of flight phase.”
Should the electrical shutdown happen at a critical phase in flight such as take-off or landing, or while manoeuvring in the air, the loss of control could be catastrophic.
The most amusing headline we read the day after Eric Cantor (Smug R) lost his primary to the Tea Bagger, and Ayn Randian acolyte, David Brat, was this one. Poor, poor Boeing, lost one of their sugar daddies…
Boeing Co. (BA) fell the most in two months as U.S. House Majority Leader Eric Cantor’s defeat in a primary election threatens congressional reauthorization of low-cost lending that benefits the world’s largest planemaker.
Keeping alive the Export-Import Bank will be an “even more high-profile/challenging fight,” Chris Krueger, a senior policy analyst for Guggenheim Securities LLC, said today by e-mail. Boeing was the “biggest loser” besides Cantor in the Virginia Republican’s surprise loss yesterday, Krueger wrote.
Ex-Im arranges financing that helps foreign airlines buy jets, a service that Boeing said last month would support $10 billion of 2014 sales. As Congress debates reauthorization, House Financial Services Committee Chairman Jeb Hensarling of Texas is being promoted as a possible Cantor successor. He has said the U.S. should “exit the Ex-Im.”
So what exactly is the Export-Import Bank? The Wikipedia entry:
The Export-Import Bank of the United States (Ex-Im Bank) is the official export credit agency of the United States federal government. It was established in 1934 by an executive order, and made an independent agency in the Executive branch by Congress in 1945, for the purposes of financing and insuring foreign purchases of United States goods for customers unable or unwilling to accept credit risk. The mission of the Bank is to create and sustain U.S. jobs by financing sales of U.S. exports to international buyers. The Bank is chartered as a government corporation by the Congress of the United States; it was last chartered for a three-year term in 2012 which will expire in September 2014. Its Charter spells out the Bank’s authorities and limitations. Among them is the principle that Ex-Im Bank does not compete with private sector lenders, but rather provides financing for transactions that would otherwise not take place because commercial lenders are either unable or unwilling to accept the political or commercial risks inherent in the deal.
Corporate welfare, in other words. Propping up the bottom line of the military-industrial complex, and other crony capital chores. Sure, after World War 2, the bank was perhaps justifiable, the Marshall Plan and all that. But in today’s economy? Why does Boeing, GE, Halliburton or ExxonMobil need special low-interest loans subsidized by US taxpayers, loans that are not available to the rest of the business world? Especially when so much of what the bank subsidizes is bad for the planet.
The bank’s environmental policy is a disappointment because it would allow an increase in spending on coal and other technologies harmful to the environment, said Steve Kretzmann, who runs Washington-based Oil Change International, which seeks to curb government aid to fossil-fuel companies.
“It makes a mockery of the Obama administration’s supposed commitment to phase out fossil-fuel subsidies,” Kretzmann said in an interview.
The project in Papua New Guinea led by Irving, Texas-based Exxon has become a particular point of contention.
The pipeline’s construction will destroy pristine tropical forests, PacificEnvironment’s Norlen said in a submission to the lender in September.
Exxon “is the most profitable corporation on the planet,” Kretzmann said. “This is the last place that taxpayer support should be going.”
President Barack Obama’s goals of boosting U.S. exports and combating climate change are colliding as the U.S. Export-Import Bank expands financing for oil, gas, mining and power-plant projects.
Bank-supported ventures approved in the year ended Sept. 30 will emit an estimated 17.9 million metric tons of carbon annually, more than triple the previous year and the most since the lender started releasing data in 2001, according to its annual reports. Among companies aided were General Electric Co. and Petroleos Mexicanos, Mexico’s state-owned oil business.
“Ex-Im is on a fossil-fuel binge,” said Doug Norlen, policy director at PacificEnvironment, an environmental advocacy group in San Francisco.
You Can’t Bribe No one
We’re not alone in wondering why in our current economic climate, this corporate welfare bank continues to exist.
For instance, from those hippies at Forbes:
Nothing brings out the well-tailored lobbyists in Washington quite like a threat to corporate welfare. With the Export-Import Bank’s legal authorization set to run out this year, the Chamber of Commerce recently led a Big Business march on Capitol Hill to protect what is known as Boeing’s Bank. Over the last eight decades ExIm has provided over a half trillion dollars in credit, mostly to corporate titans. Congress should close the Bank.
ExIm was created in 1934 to underwrite trade with the Soviet Union. The agency piously claims not to provide subsidies since it charges fees and interest, but it exists only to offer business a better credit deal than is available in the marketplace. The Bank uses its ability to borrow at government rates to provide loans, loan guarantees, working capital guarantees, and loan insurance.
The result is a bad deal for the rest of us. For instance, ExIm is not free, as claimed. Recently made self-financing, the agency has returned $1.6 billion to the Treasury since 2008. However, economists Jason Delisle and Christopher Papagianis warned that the Bank’s “profits are almost surely an accounting illusion” because “the government’s official accounting rules effectively force budget analysts to understate the cost of loan programs like those managed by the Ex-Im Bank.”
In particular, the price of market risk is not included, even though doing so, explained the Congressional Budget Office, would provide “a more comprehensive measure of federal costs.” Delisle and Papagianis figured ExIm’s real price to exceed $200 million annually. Indeed, both the Government Accountability Office and ExIm Inspector General raised questions about the accuracy of the agency’s risk modeling.
Federal Reserve economist John H. Boyd took another approach, explaining: “For an economic profit—that is, a real benefit to taxpayers—Eximbank’s income must exceed its recorded expenses plus its owners’ opportunity cost, a payment to taxpayers for investing their funds in this agency rather than somewhere else.” If ExIm was private, he added, “one must suspect that its owners would have pulled out long ago in favor of a truly profitable enterprise.” He figured the Bank’s real cost averaged around $200 million a year in the late 1970s but had increased to between $521 million and $653 million by 1980. Given the recent explosion in Bank lending the corresponding expense today could be much higher.
The National Labor Relations Board on Friday officially dropped its high-profile case challenging Boeing’s decision to open a nonunion aircraft manufacturing plant in South Carolina.
The board acted after the Machinists union approved a 4-year contract extension with Boeing earlier this week and agreed to withdraw its charge that the company violated federal labor laws. Lafe Solomon, the board’s acting general counsel, said he had always preferred a settlement. The agency settles about 90% of its cases. Under the deal, Boeing (BA) promised to build the new version of its 737 airplane in Washington state. The Machinists also agreed to drop allegations that Boeing opened the South Carolina plant in retaliation for past union strikes.
The GOP wants the Obama administration to be Republicans, and negate the legal process. Not going to happen…
Labor allies are defending the White House from attacks by South Carolina Gov. NIkki Haley (R) and other Republican lawmakers over a union dispute with Boeing, accusing them of interfering with an independent federal agency.
At the Chamber of Commerce on Tuesday, Haley and other Republicans called on President Obama to condemn the independent National Labor Relations Board, which is tasked with enforcing labor laws, for suing Boeing over a production line in South Carolina that it says constitutes illegal retaliation against unionized Boeing workers in Washington State. Obama has no direct control over the agency, but does choose its members, and Republicans have sought to block appointments they consider too pro-labor.
Sen. Tom Harkin (D-IA), chairman of the Senate Health, Education, Labor and Pensions Committee, issued a statement accusing the GOP of an “overly dramatic response” to a “routine unfair labor practice charge.” He added that it was unfair to target the White House when it has no say in the NLRB’s lawsuit.
“That’s what this all comes down to: powerful corporate interests are pressuring public officials to interfere with an independent agency, rather than let justice run its course,” Harkin said. “And we should not tolerate this interference. Instead, we should turn our attention back to the issues that really matter to American families – how we can create jobs in Washington, South Carolina, Iowa, and across the country?”
An ugly spat between a huge corporation, organized labor, the White House, and a Tea Party governor whose union-busting rhetoric would make Chris Christie blush, is becoming the next national flashpoint in this year’s ongoing war on unions.
The dispute centers around a planned Boeing airplane production line for its 787 Dreamliner in South Carolina using nonunion labor. The National Labor Relations Board issued a complaint earlier this month looking to halt operation of the new plant after members of the International Association of Machinists at Boeing’s Washington state production line claimed the decision to expand outside the state was retaliation for previous strikes. The NLRB is demanding that Boeing open a second production line in labor-friendly Washington state.
Boeing responded that because the corporation is not closing its Puget Sound plant, the retaliation claims are “legally frivolous.” Boeing recently issued a further statement claiming it would have opened its South Carolina line regardless of labor conditions in Washington state. The case will come before an administrative law judge in June and Boeing can appeal that decision in federal court if it doesn’t go its way.
Given that the NLRB languished under the Bush administration — at one point the AFL-CIO called for it to be shut down — the NLRB’s complaint represented a coming out party of sorts for the revamped agency.