Company stock falls following two horrific crashes under the same circumstances
The Boeing 737 Max 8 has crashed in both Indonesia and Ethiopia under very similar circumstances five months apart. The first crash taking place in Indonesia on October 29th, 2018 and the second on March 10th, 2019. The crashes claimed the lives of 346 people. The tragedy led to an uproar among the public and a 10% fall in the value of the company’s stock, after the crash in March. The company has grounded its bestselling plane after they crashed under alleged technical glitches with the sensors aboard the plane. The company announced a 21% fall in earnings post this crisis and in order to conserve cash have suspended plans to repurchase share.
The planes being grounded have already cost the company millions of dollars. All this has given a great deal for the shareholders to complain about and will address these concerns on this Monday when the company hosts its annual meeting. The meeting will be headed by CEO Dennis Muilenburg, who in an interview to CNN said that he would start the meeting off with a moment of silence for all those killed. In the interview, he continued to elaborate that his main aim in the meeting will be to reinforce that the topmost priority of the company has always been the safety of their customers and that that remains the same.
He also said that the Boeing 737 will be the safest aeroplane in the skies once they fix the automatic safety feature that has been found out to be the cause for the crash. Shareholders have also been pushing for a change in the machinery of the company with a change in the current setup. This means that they feel that the fact that Muilenburg is both the chairman and CEO has to change. A lot of their shareholders are threatening to pull funding if they are not satisfied with the changes that are made post the tragedy. Only time will tell if Boeing will recover from this hit and fly again.