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Boeing gathering to take shareholder temperature amid 737 MAX crisis

PTI Chicago | Updated on April 29, 2019 Published on April 29, 2019

Shareholders overwhelmingly sided with Boeing on similar votes on company leadership structure and lobbying last year, but that was before the 737 MAX crisis.

Boeing management faces a potential rebuke by shareholders on Monday when investors gather at an annual meeting six weeks after a top-selling plane was grounded globally following two deadly crashes.

Proposals that Boeing opposes would direct the company to make its chairman an independent director and to disclose its lobbying activities and trade association memberships.

Majority votes against the company would be the most visible sign of displeasure among shareholders at Boeing and Chief Executive Dennis Muilenburg, who opened the gathering at the in Chicago with a moment of silence.

“We at Boeing are sorry for the loss of lives in these tragedies,” Muilenburg said early in the gathering when a moment of silence was held.

The annual gathering for investors -- often a speedy affair at Boeing and other highly profitable companies -- has the potential this year to be a much more contentious affair.

The 737 MAX has been grounded since mid-March following Ethiopian Airlines and Lion Air crashes that together claimed 346 lives, a crisis that has raised questions about whether the US giant sacrificed safety in its zeal to market a new narrow-body plane and compete with Airbus.

US carriers such as American Airlines and Southwest Airlines are targeting August to resume flights on the 737 MAX in the expectation that Boeing will receive regulatory approval for its fix by that time.

Shareholders overwhelmingly sided with Boeing on similar votes on company leadership structure and lobbying last year, but that was before the 737 MAX crisis.

“The company faces serious challenges in regaining the confidence of regulators, airlines, pilots and passengers worldwide,” Institutional Shareholder Services said in a note earlier this month that supported both measures.

“Any missteps in the process of remediating the issues and open questions that have led to the grounding of the 737 MAX, or any repeat of the problems in future aircraft programs, could have a devastating impact on the company’s prospects, its brand and its reputation, for years.”

Beyond those two votes, the Boeing shareholder meeting could also provide a sounding board for critics.

Fresh questions were raised over the weekend following revelations Boeing deactivated a signal on 737 MAX planes for Southwest without telling the carrier.

The Federal Aviation Administration considered recommending grounding the planes as they explored whether pilots flying the aircraft needed additional training about the alerts, said a source familiar with the matter.

They decided against that -- but never passed details of the discussions to higher-ranking officials in the FAA, the source said.

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Published on April 29, 2019
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