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Boeing board to meet in Texas as scrutiny intensifies: sources

Published 10/19/2019, 08:54 PM
© Reuters. FILE PHOTO: The Boeing logo is displayed on a screen, at the NYSE in New York
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By Eric M. Johnson and Tim Hepher

(Reuters) - Boeing Co's (N:BA) board of directors and top executives from its airplanes division and supply chain were due to meet on Sunday in San Antonio, Texas, two days after the U.S. planemaker was plunged into a fresh crisis over its banned 737 MAX jet.

The meeting comes as pressure mounts on the world's largest planemaker not only from investigations into the 737 MAX following two deadly crashes, but also from the financial burden caused by the jet's safety ban and continued high production.

Several industry sources said there was speculation inside the company of significant job cuts as Boeing, unable to deliver 737 MAX planes to customers, continues to drain cash.

And although Boeing has so far told suppliers it expects to maintain a production rate of 42 single-aisles monthly with plans to increase to a record level next near, rates may have to come down if regulators further delay the MAX's return to service, the people said.

The schedule for the board's face-to-face meetings was set for Sunday and Monday in San Antonio, one of the people said, two days before Boeing reports earnings on Oct. 23.

The week after, Boeing Chief Executive Officer Dennis Muilenburg - who was stripped of his job as board chairman eight days ago - is due to testify before U.S. Congress about the plane's development.

In conjunction with the board meeting, top executives including Boeing Commercial Airplanes chief executive Kevin McAllister and Jenette Ramos, senior vice president of Manufacturing, Supply Chain & Operations, were due to fly on Sunday to Boeing's Kelly Field facility in San Antonio, where numerous 737 MAX jets are parked in storage, two of the people said.

A Boeing spokesman declined to comment on the board's agenda and the company's production or staffing levels.

Apart from those issues, the board is likely to discuss a series of 2016 internal messages, first reported by Reuters on Friday, in which a senior Boeing pilot said he might have unintentionally misled regulators.

The pilot also said the stall-prevention system known as MCAS - which investigators have linked to the crashes in Indonesia and Ethiopia that killed 346 people - was "running rampant" during a simulator session.

The messages sent Boeing shares tumbling, prompted a demand by U.S. regulators for an immediate explanation, and a new call in Congress for Boeing to shake up its management.

© Reuters. FILE PHOTO: The Boeing logo is displayed on a screen, at the NYSE in New York

Federal prosecutors aided by the FBI, the Transportation Department Inspector General and several blue-ribbon panels are also investigating the plane's approval.

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