Boeing's Directors Are Now Facing an Investor Lawsuit Over Fatal 737 Max Crashes (bbc.co.uk) 62
Alain Williams (Slashdot reader #2972) brings this report from the BBC:
Boeing's board of directors must face a lawsuit from shareholders over two fatal crashes involving its 737 Max plane, a U.S. judge has ruled. Morgan Zurn said the first crash was a "red flag" about a key safety system on the aircraft "that the board should have heeded but instead ignored".
She said the real victims were the dead and their families but investors had also lost billions of dollars... In her ruling the Delaware judge said: "While it may seem callous in the face of [the families'] losses, corporate law recognizes another set of victims: Boeing as an enterprise, and its stockholders...."
The crashes have already cost Boeing about $20bn in fines, cancelled orders and other costs.
She said the real victims were the dead and their families but investors had also lost billions of dollars... In her ruling the Delaware judge said: "While it may seem callous in the face of [the families'] losses, corporate law recognizes another set of victims: Boeing as an enterprise, and its stockholders...."
The crashes have already cost Boeing about $20bn in fines, cancelled orders and other costs.
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Good. There is a serious lack of taco trucks in my area.
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Damn those illegal migrants seeking refuge with all their money to drive up the rent costs! /sarcasm
Seriously, do you even hear yourself?
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Legal migrants fleeing from the coasts, who have discovered they can live in the midwest and still get paid obscenely for working from home, are coming in like locusts and driving up housing prices here.
Meanwhile, in the background, the Fed money printer continues to go Br r r r r r inflating all asset prices and not taking real measures in to account. Steaks are still 2x what they were a year ago at the grocery store, only now not with any supply chain issues. The same can be said about a great many thin
Finally actions are taken (Score:4, Interesting)
Except for the wrong reasons. Clearly those who lost relatives in the accidents are fine. Shareholders, on the other hand, are suffering their major losses.
People are disposable in the eyes of legal system, and this is now clear if anyone still had questions.
Re:Finally actions are taken (Score:4, Insightful)
Not so, imho.
Shareholders were hugely rewarded by massive share repurchases. The downside was that there was no money to do a 737 replacement, hence the -MAX kludge.
There was a time when Boeing's directive was to 'let no advance in aviation pass us by'.
Then the emphasis shifted to "shareholder value'., which worked great until it did not.
The good news is that the company can now get back to speed technically more cheaply than if Boeing had actually found the way itself.
The bad news is that they have lost the experience of innovation. I expect them to produce accordingly.
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Shareholder-value is great for short-term profits, but utterly destructive for any strategic developments. It is time to kill the idea. It is ultimately far too bad for society as a whole.
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Etudiant, thank you for your post. Could you explain this statement,
"The good news is that the company can now get back to speed technically more cheaply than if Boeing had actually found the way itself."?
It seems to me (I am no expert at all. I think of myself as an ordinary systems engineer.), that getting back up to speed technically requires a lot of engineering hours and training of engineers. Why is it cheaper now than it would have been previously?
Yeah, we'll just ignore the last sentence (Score:3)
Yeah there ya go. Let's ignore the last sentence about the $20 BILLION they've already paid out so far, including $2.5 billion in one action, with more law suits ongoing. It advances the narrative better if we pretend nine of that ever happened, right?
I'm curious, does it ever make you feel shitty when you think about how much effort you put into intellectual dishonesty, into lying to yourself and others? Is the "buzz" of whining about "omg corporations" really worth lying to yourself every day, and knowing
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Yeah there ya go. Let's ignore the last sentence about the $20 BILLION they've already paid out so far, including $2.5 billion in one action, with more law suits ongoing. It advances the narrative better if we pretend nine of that ever happened, right?
Honestly, I couldn't care less if they had to pay out $100MM per victim, or $5 and a McDonald's coupon. The financial penalties are much less relevant than the fact that apparently Boeing has turned into a PowerPoint engineering firm with no culture of safety. Yes, the families of the victims need some kind of restitution (though what kind of check can replace a spouse? a child? No amount of money would make me feel whole after that loss, IDK about you). But what really matters is - Is this MAJOR supplier t
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though what kind of check can replace a spouse? a child? No amount of money would make me feel whole after that loss, IDK about you
It's a challenging problem. As soon as you decide that some kind of compensation is due to the family you then have to get into the business of determining the amount... in the face that no amount will be a true replacement.
I recently heard an interview with Kenneth Feinberg, who was tasked with solving this problem for the 911 Victim Compensation Fund.
https://allthatsinteresting.co... [allthatsinteresting.com]
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That it's an impossible problem may indicate that it's being framed incorrectly. How it should be framed, however, isn't clear. (And I *would* assert that as framed it's not just difficult, it's impossible.)
Financial recompense needs to be a PART of the answer. But what else is feasible?
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Agreed that no financial 'compensation' can actually replace a lost loved one. But it CAN make sure that the families of the dead are at least taken care of financially. It seems reasonable to insist on at least that much.
As for the rest, it's a deep cultural problem and it's going to take a very large slap in the face to wake Boeing up. They cheaped out on engineers, they replaced those grumpy expensive senior engineers with cheaper noobs and MBA yes men and as a result got a half-baked non-soloution for
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it's going to take a very large slap in the face to wake Boeing up
I've been sent a lot of reading links on this, and it seems to be a really deep problem that goes back to the Douglas merger. I've also read a lot about the specifics of the MAX and how it was designed to compete with Airbus offerings - in terms of cheap training and no separate certification. I'm not an aerospace guy, but I was a real embedded systems engineer for many years and I was astounded by the compromises in the MAX design. Not just the engineering compromises but also .... customers had to PAY for
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Ity's even worse. The second AoA sensor was not optional, just the trivial step of letting the pilot know they disagreed. Further, even if the disagree warning was lit, MCAS would continue on oblivious to it.
Only an MBA trying to chisel out an extra dime on a million dollar deal could have loved that. Leaving out a way to disable MCAS without turning off the entire electric trim system was a big screw up as well, especially after reducing the mechanical advantage available in the manual trim system.
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Did those 20B bring anybody killed by their gross negligence back from the dead? Did anybody go to prison for what they did? No? Question answered.
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"Except for the wrong reasons. Clearly those who lost relatives in the accidents are fine. Shareholders, on the other hand, are suffering their major losses."
Shareholders have better lawyers.
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People who lost relatives in the accidents got paid out, either by directly suing Boeing or via the airlines concerned suing Boeing.
Shareholders are the ones who provided those payouts. Now the shareholders are suing the people who actually made the decisions. The corporate shield doesn't allow the victims to sue the directors and execs (usually). They have to be held accountable by the shareholders.
profits vs. people (Score:2, Interesting)
It's always been that way. When money is involved, wealthy people only think about the money, not about the lives lost. The recent court ruling on the Sackler family shows how wealth let's you get away with just about anything. Hundreds of thousands of Americans dead from opioid overdoses, and they get a fine plus sweeping immunity. At the same time, regular people rot in jail for years for minor drug possession. The good news is this does not prevent Federal criminal charges being filled against the Sackle
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This is a form of corruption. The type that ultimately destroys society.
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Don't many large companies have insurance which pays out if directors are sued?
I think that was the case with Tesla recently (except for Musk it seems, who wanted to fight it out).
So worst case, the insurance premiums go up after this. And the company will pay for this. The directors may not even have to spend a single cents in this thing, win or lose.
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Capitalism (Score:5, Insightful)
Losing money can bring you to courts, killing 300+ people is a fine.
Oh, give it a break (Score:5, Interesting)
This case says NOTHING about the people Boeing murdered - that's in a different set of lawsuits.
You did the typical leftist drive-by shooting of "capitalism sucks!", accompanied by something good actually being inverted and presented as something obviously bad [to ignorant fools who ignore details] and implications that any other system [usually something Marxist] must obviously be better.
1. NOTHING about this lawsuit affects any other lawsuits, and in fact even the left wing hacks at NPR admitted back in January [npr.org] that Boeing is paying out $2.35BILLION in the settlement over the two crashes $500Million of which will be divided among the families of the 346 victims (some of the settlement is criminal penalties and some is to the airlines who bought 737Max airframes that were then grounded). That means that each victim family will end up with over a million USD, which may not be what it used to be but is certainly not trivial.
2. This is excellent news - in a market economy like this one, shareholders SHOULD be making their boards of directors and corporate execs responsible for their bad actions. Sadly, most investors sit on the sidelines and ignore all the garbage the executives at the companies they invest in get into - which is how so many corporations have ended up going so far astray. This is a very positive development - long overdue.
3. You anti-capitalism guys always compare market economies to perfection, NEVER to the real world alternatives. Please point to the non-capitalist system in the real world where simultaneously one sees the sort of economic growth and success for the general population we see in market economies, AND there is MORE accountability for lost human lives. As a general rule, people living under non-market-based systems get treated like interchangeable cogs in a machine and their families are treated appallingly when they are killed.
Let the capitalist butthurt flow through you (Score:1)
SSDD. Same story as tobacco executives, faulty GM ignitions, putting the fire in Firestone tires on Ford Exploders, Sacker family profiting off opioid epidemic, Wells Fargo signing people up for fraudulent accounts, etc etc.
Slaps on the wrist with fines far smaller than the profits generated by their criminality. Corruption, exploitation, and criminality are the inevitable end results of capitalism. Your average shoplifter faces harsher consequences than a Boeing executive that murdered hundreds. A system t
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Because I'm pretty sure what happened to Pan-Am was actual capitalism.
Only way to win (Score:2)
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How many Gungans do you imagine died to bring this lawsuit?
Money (Score:2)
The bar for conviction is a lot lower when only money is at stake, so they are more likely to win than if it were a criminal case.
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If you were to desire to make it a criminal case, which laws would you believe would apply?
OTOH, criminal law also doesn't adequately recompense the victims. There needs to be a better answer, but it's not clear what it would be.
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OTOH, criminal law also doesn't adequately recompense the victims.
My hope is that if the stockholders win, then the victims will also be able to win a civil wrongful-death suit or something.
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For other western nations - for example the UK - it would be possible to charge the company with “Corporate Mansalughter”. That would have to require that the prosecution could show that the company knew the aircraft was unsafe [for example, from internal emails] and then from that show that nothing was done about it.
In the United States, however, no such statute exists. Given the stranglehold of corporate corruption being exerted over CongressCri
Criminal case? (Score:2)
Lying to the FAA might well be a basis for a criminal complaint, under fraud (and possibly conspiracy) statutes.
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Why would there be a criminal case against a board of directors? Do you imagine they pushed a big red "crash" button?
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Because they created a system that allowed bad planes to be built and sold. It's useful for comparison to consider the question, "What if a company is polluting a river, should the CEO be responsible?"
For the first crash, maybe the shouldn't be held responsible. But after the first crash, maybe the should have changed some things before selling more planes.
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"Why would there be a criminal case against a board of directors? Do you imagine they pushed a big red "crash" button?"
No, they put a banana sticker on the red light saying 'crash imminent'.
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Look up what a board of directors does in a company.
Hint: They hire and fire the top executives. They oversee certain corporate filings related to the stock and the investors. It. Hiring/firing and stock-related stuff. They not only don't press buttons, they also don't label buttons.
What took so long? (Score:2)
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Large companies usually take out insurance policies against corporate malfeasance. It is unlikely that any of them will be paying a nickel out of their own pockets.
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Satanists always try to resolve matters secretly before turning to the legal system.
How very American (Score:1)
They get sued over the loss in shareholder value.
Not over the loss in lives.
So Cyberpunk 2020 is to some degree real. OK, no simstim and jacking into the matrix, but at least we have the values down.
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Cyberpunk as a genre are 1980s taken to their logical conclusion. These "values" have been real for a long time.
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Always form opinions based on conclusions that are easily discovered, but which you didn't bother checking.
It reveals the quality of your character.
Good (Score:2)
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That's a good idea. What would be the appropriate legal justification? (I can see it as the basis of a liability suit, but not of an official investigation...which is what's needed, with appropriate penalties.)
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We damn well know they did. I wouldn't have been hearing rumors about them coordinating this travesty a decade or more in advance otherwise from people who have since all died under suspicious circumstances or simply disappeared.
Why aren't they facing jail time (Score:4, Insightful)
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Because that's a stupid idea, and you don't even have the right people.
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Management made to decision to introduce MCAS. MCAS killed those people. Therefore management is culpable in the deaths.
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You think the board of directors made a decision about which technology to use in the product?
I don't believe you that you think that. I think you just shouted about jail time like a moron without even checking who they were talking about, and trying to cover your ass.
Accountability (Score:3)
Sadly, none of these people who "deserve the huge rewards because they take the big risks" will be having to choose Ramen over a thick steak for dinner as a result of their huge failure. But a bunch of people who had no power to make Boeing behave better will.
IANAL, but surprised judge let CEO off (Score:4, Informative)
It seems to me that "lying to the board and then getting to retire with full pension and options' sure -should be- actionable against the board! The extensive narrative from the judge shows that the Board knew, or damn well should have known, that Muilenberg lied to the board about 737 MAX safety and MCAS.
I also note in passing the current CEO was also accused of 'bad things' in the judge's summary.
Given the high bar for such a suit, that probably explains the lengthy and detailed judicial opinion. No judge likes to be overturned on appeal... Definitely some blunt characterizations by the judge in this report! (And given my own experience with Dennis Muilenberg and with Boeing, I'm glad to see the blunt language.)
so, how did they fix the 737 Max? (Score:2)
Besides renaming the latest gen aircraft into 737-9, what else did they do? Did they add an extra angle of attack sensor or an MCAS system failure warning? Did they send all pilots to retrain or did everything end with just a software fix?
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They put on some duct-tape and hope they are now save enough. Face it: Boeing does not know how to do it anymore. They cannot provide a reliable fix. They can only hope for the best.
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It's in the 737 RTS doc from the FAA, here. [faa.gov]
On Sacklers, oxycontin and investor law suits ... (Score:3)
People who actually died in these crashes, any engineer who stood up to management pressure they will get no justice. But these "investors" who gorged themselves on the profits made when the company cut the corners now demand the remaining stock holders to pay them for their imaginary losses. Board is not going to pay out of their pockets. They have contracts with the company to backstop and indemnify them.