Boeing just announced plans to freeze hiring and save cash in response to the coronavirus pandemic, but it's really in response to their own ineptitude. They're fooling themselves if they think they can hide behind this virus.
The coronavirus might actually be helping companies like Boeing (NYSE:BA) that were a complete mess before the pandemic outbreak. The beleaguered airline manufacturer just announced that they will put a freeze on hiring and limit overtime for current employees. They’ll also cash out a $13.8 billion loan.
But they’d probably be forced to take similar measures, even if the coronavirus never left the Wuhan fish market, or wherever it originated. The deadly virus might actually help to camouflage the company’s total lack of competency.
Boeing CEO Dave Calhoun and CFO Greg Smith sent a note to employees on Wednesday stating:
On top of the work of safely returning the 737 MAX to service and the financial impact of the pause in MAX production, we’re now facing a global economic disruption generated by the COVID-19 coronavirus.
Sure, the coronavirus is not helping. But let’s be clear: Boeing is not just facing an economic disruption from “out there.” It’s creating its own due to its repeated incompetence. When you go down the laundry list of mistakes, it’s hard to believe this company didn’t make these changes months ago.
It’s been a brutal 12 months for Boeing. Almost exactly one year ago, Donald Trump halted all Boeing 737 MAX 8 flights. The order followed two crashes that killed 346 people. During his statement Trump said,
Boeing is an incredible company. They are working very, very hard right now, and hopefully they’ll very quickly come up with the answer, but until they do the planes are grounded.
It’s been a year, and there are no answers in sight. Things have only gotten worse.
Following Trump’s orders, the airline industry lost billions of dollars, and Boeing recorded its first annual loss in over 20 years. Boeing said that the grounding of the 737 MAX will cost them over $18 billion. They expect to compensate other airlines up to $8.6 billion due to lost sales. That sounds like a self-created “economic disruption” to me.
Another Boeing aircraft crashed this February in Instanbul, killing three people. While this may have been weather-related, it was the third time in two years that a Boeing/Turkish Airlines flight skidded off a runway.
According to leaked internal documents, Boeing discovered foreign object debris in the fuel tanks of several 737 MAX jets less than a month ago.
To top it off, one hedge fund manager called the airline manufacturer’s accounting practices into question. He claimed that Boeing “could be the Enron scandal of our day.”
Clearly, this company is not the victim of a deadly virus. It’s the victim of its own ineptitude.
Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com.
This article was edited by Josiah Wilmoth.