By CCN.com: The Easter trading holiday failed to reinvigorate the Dow, which fell on Monday after the New York Times published a bombshell report about the index’s largest component, Boeing. However, the Dow assembled a moderate recovery on Tuesday.
As of 10:21 am ET on Tuesday, the Dow had gained 43.25 points or 0.16 percent; the DJIA last traded at 0.16 percent. The US stock market’s other major indices also rallied, with the S&P 500 rising 0.32 percent to 2,917.49 and the Nasdaq climbing 0.62 percent to 8,064.79.
On Monday, the Dow Jones Industrial Average endured a sharp decline at the opening bell but managed to sneak back across the 26,500 mark soon after. By the closing bell, the DJIA had lost 48.49 points or 0.18 percent to trade at 26,511.05. The S&P 500 and Nasdaq both clawed back earlier losses to post minor advances, rising 0.1 percent to 2,907.97 and 0.22 percent to 8,015.27.
On Monday morning, the Dow slipped back into decline after the New York Times published a
bombshell report about the Boeing plant in North Charleston, South Carolina, one of two facilities that manufacture the 787 Dreamliner.
According to the NYT, Boeing’s safety flubs extend far beyond the 737 MAX, which remains grounded following two fatal crashes linked to a faulty anti-stall system. At the South Carolina plant, at least, “potentially systemic problems” threaten to permanently scar the century-old aerospace giant’s stellar reputation.
Citing a treasure trove of internal documents, regulatory records, and employees, the NYT alleged that 787 Dreamliners produced at the North Charleston facility suffer from “shoddy production” standards that at times created dangerous safety hazards.
Current and former employees say that Boeing leadership pressured them to prioritize production targets over safety and quality standards, causing the plant to regularly ship aircraft that had debris and other foreign objects littered among the planes’ internal components.
One American Airlines employee found a piece of Bubble Wrap near the co-pilot’s pedal and loose objects touching electrical wires that control the 787 Dreamliner’s landing gear. Boeing employees say that they once found a ladder inside a plane’s tail.
“I’ve told my wife that I never plan to fly on it,” said technician Joseph Clayton, who worked at Boeing’s North Charleston plant. “It’s just a safety issue.”
“As a quality manager at Boeing, you’re the last line of defense before a defect makes it out to the flying public,” added former quality manager John Barnett. “And I haven’t seen a plane out of Charleston yet that I’d put my name on saying it’s safe and airworthy.”
At best, employees who raised these concerns found themselves ignored. Quality managers who refused to turn a blind eye to safety hazards allege that they were reassigned or even fired on trumped-up violations.
It’s not a good look for Boeing, which already faces increased regulatory and legislative scrutiny following the 737 MAX controversy.
Boeing shares had already plunged 15 percent since the beginning of March, and this NYT report won’t do the firm any favors as it seeks to rebuild its reputation.
To make matters worse, Boeing plans to report its first-quarter earnings on April 24. Analysts warn those results might not be pretty.
Boeing stock dropped 1.29 percent to $375.17, and it dragged the Dow along with it.
Last modified: July 2, 2020 8:11 PM UTC