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Wednesday, January 19, 2022

News: Boeing to face Max 737 investor lawsuit

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The board of directors of Boeing will face a lawsuit from shareholders over two fatal crashes involving its 737 Max plane, a judge in the United States has ruled.

Morgan Zurn said the first crash was a “red flag” for the aviation manufacturer about a key safety system on the aircraft “that the board should have heeded but instead ignored”.

In his ruling the Delaware judge said: “While it may seem callous in the face of the families’ losses, corporate law recognises another set of victims: Boeing as an enterprise, and its stockholders.

“Stockholders have come to this court claiming directors and officers failed them in overseeing mission-critical airplane safety to protect enterprise and stockholder value.”

The crashes in Indonesia and Ethiopia in 2018 and 2019 killed all 346 people on board, leading to the 737 Max being grounded around the world.

Investigations later found a flaw in an automated flight control system, known as MCAS, was at fault.

In January, Boeing paid $2.5 billion to settle criminal charges it concealed information about changes to MCAS from safety officials, contributing to the crashes.

But it still faces civil lawsuits from families along with the latest action from shareholders.

A Boeing spokesperson said: “We will review the opinion closely over the coming days as we consider next steps.”

Investor relations

Also today, Boeing named Matt Welch as vice president of investor relations.

Welch will succeed Maurita Sutedja, who has accepted an opportunity outside of Boeing following more than a decade of leadership within several finance roles at Boeing.

He will lead interactions with the investment community.

“Matt is a proven financial leader with extensive understanding of Boeing’s operations and the markets we serve,” said Brian West, Boeing chief financial officer.

“His broad experience with our financial stakeholders and his commitment to transparency will help us further advance our efforts and build upon Maurita’s exceptional work over the last several years.”

Welch and Sutedja will work together to ensure a smooth transition.

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