The Boeing CEO Board said moving quickly on MAX Safety; New information suggests otherwise

That and other new information in the suit cast doubt on whether Boeing leaders were pressuring regulators about safety issues or seriously considering putting down the plane ahead of the second 737 MAX crash in early 2019.

Parts of the internal Boeing documents, which show dates and details of meetings held by the directors and discussed, are cited in the shareholders’ action claiming that directors breach of their fiduciary duties in overseeing governance. The suit also supersedes David Calhoun, then chief executive who became CEO, adding to the reporters the extent to which leaders were serving safety concerns between and after the two crashes.

The suit alleges that Mr Calhoun, who became Chief Executive in early 2020, launched a public relations campaign that “called for the board to be more involved in crisis and more involved than it was for him. “Really” after the two crashes that killed 346 people in October 2018 and March 2019. The suit cites internal Boeing emails and other documents that were not previously public.

A Boeing spokesman said the lawsuit certainly provides an anonymous account of Mr Calhoun’s interviews, and said the company’s court films in the case reflect the board’s “broad and active view”. “was correctly explained in these interviews. The spokesman said the company was trying to dismiss the lawsuit, saying there was a lack of merit and it was “giving a false and incomplete picture” of the lawsuit. activities at Boeing and the inspection carried out by the board.

The company declined to provide the CEO with a view to comment, or to address the specific claims of the Mr. Calhoun lawsuit or the board’s response to the crisis. The spokesman said Boeing is “committed to the values ​​of safety, quality and integrity in everything we do.”

Plaintiffs’ lawyers collected the records in the law, filed in the Delaware Chancery Court, and allowances were recently released after the Wall Street Journal asked a judge to make them public. Different versions of the suit were submitted. Delaware law allows complainants access to internal board documents in such cases.

Mr Calhoun, director of Boeing since 2009, was a prominent defender on board the company and then its CEO, Dennis Muilenburg, after the second 737 MAX crash. That crash forced global regulators to take down the plane, sparking a heavy-handed physical emergency that shook Boeing’s leadership and monitoring ramp safety.

Now, as CEO, Mr. Calhoun is navigating Boeing through the events of the MAX crisis and falling out of the Covid-19 pandemic that has pushed demand for new aircraft and forced the manufacturer reduce jobs and productivity.

The main aim of Mr Calhoun’s media interviews in May 2019 was: “Set up Boeing’s board of directors as an independent body that has exercised appropriate control,” according to a Boeing internal document that went public for the first time in the suit. . It was not confirmed who wrote or received the document.

In one interview, according to documents cited in the trial, Mr. Calhoun said that directors were immediately notified, as a general board ”when the first 737 MAX in Indonesia fell on 29 October, 2018. A portion of the recently released suit said Boeing’s interior records show that directors received their first written communication from Mr. Muilenburg on November 5, a week after the crash.

Mr Calhoun said in another interview that the board met “very quickly” after the initial crash to discuss it, according to the suit. The suit said the first meeting of the board came a few weeks after the crash, which involved a Lion Air jet in Indonesia. The phone meeting was Nov. It was 23, 2018 which was considered optional due to Thanksgiving holiday weekend, the suit said. It was not determined how many leaders were present.

The lawsuit and a Boeing court slam note about a dozen exchanges between management, the board and individual members in the two months following the first MAX crash, include a request from directors for more information about the crash.

The first formal boarding session – a regularly scheduled directors’ meeting – took place in mid-December, according to a lawsuit and excerpts from Boeing documents. A presentation for the board’s action session lists the Lion Air crash as a “hot topic.” However, the suit said, board materials did not show any “meaningful debate” on safety issues, including the MAX flight control system of suspects in the crash or possible sensors of a plane. Both topics had attracted media attention at the time.

Minutes from the December 16-17, 2018 meeting show that the board received a presentation on the 737 MAX which instead focused on “the state of product recovery, focusing on the factory, the supply chain, and the engines, ”as well as“ Ready for the next possible rate hike, ”according to a section of the minutes cited in the lawsuit. Boeing had expected production rates on the single-axle pier, a major cash retailer, at the time but had been stuck with supplier bottles.

Mr Calhoun said in one interview in May 2019 that the board had engaged in what he called a “deliberation process” with Mr Muilenburg to consider setting up the plane after the first MAX crash, which according to a lawsuit, saying: “We looked over there many times. He said in another interview, according to the suit, that the leaders were not “lamenting that judgment” to keep the plane flying, as details of the first crash made it look “as if -regulation. ”

Summarizing the internal Boeing documents, a portion of the recently published lawsuit stated that “board or email communication is not disputed” such a fundamental decision, and no be board minutes or agendas in the nearly five months between the crashes.

After hitting the second 737 MAX in Ethiopia on 10 March 2019, Mr Calhoun said in one interview that he was “immediately corraling[ed] board discussion, ”according to a lawsuit. The Boeing filing said the management warned the board the same day. The suit said leaders met three days later with a conference call to discuss the potential base of the MAX fleet.

In its court file, Boeing said it has long relied on established procedures to keep the board engaged in design, safety and other matters over the years. The filing noted Boeing’s contribution to safety improvements, including “a consistently improved safety record of the 737 model, generation by generation. “After the first MAX crash, his filing said, the board responded quickly and these procedures” allowed him to diligently and appropriately monitor the company’s response. “

The board has since set up a committee to take greater control of safety. U.S. regulators approved the 737 MAX to resume commercial service in November 2020.

Details in the lawsuit also appear to contradict Mr Calhoun’s May statement in May 2019 in one interview in which “the company’s position in the media deach was never debated Mgr ”By the board. The suit includes sections of internal emails and announces multiple communications among Mr. Muilenburg and directors by May 2019 about what the then-CEO saw as negative media coverage.

As time went on, Boeing’s challenges intensified amid more transportation and regulatory scrutiny. The board shook the ruling at the end of 2019, including the removal of Mr Muilenburg from his dual role as chairman and handing over that job to Mr Calhoun.

As chairman in November 2019, Mr Calhoun defended Mr Muilenburg and the company’s “very active board” through the MAX crisis.

“No one is going to say they were fast enough,” he told CNBC.

Write to Andrew Tangel at [email protected] and Andy Pasztor at [email protected]