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Boeing CEO Defends His Safety Record, Spars With Senators And Apologizes To Crash Victims’ Relatives

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Boeing | AP News Image

During a bruising Senate hearing on Tuesday, Boeing CEO David Calhoun defended the company’s safety record while members accused him of prioritizing profits over safety, failing to protect whistleblowers, and even receiving excessive pay.

Relatives of victims killed in two Boeing 737 Max plane tragedies were in the room, some holding photos of their loved ones to remind the CEO of the dangers. Calhoun began his speech by standing, turning to face the families, and apologizing “for the grief that we have caused,” pledging to prioritize safety.

Calhoun’s testimony before Congress was the first by a high-ranking Boeing official since a panel blew off a 737 Max on an Alaska Airlines flight in January. The event did not result in significant injuries but aroused new concerns about the company’s best-selling commercial aircraft.

The tone of the hearing before the Senate investigations subcommittee was established hours earlier when the panel released a 204-page report containing additional charges from a whistleblower who expressed concern that defective parts were being used in 737s. The whistleblower is the latest in a long line of current and former Boeing employees who have expressed concerns about the company’s manufacturing practices, which federal regulators are investigating.

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Boeing | AP News Image

Boeing CEO Defends His Safety Record, Spars With Senators And Apologizes To Crash Victims’ Relatives

“This hearing is a moment of reckoning,” subcommittee chairman Richard Blumenthal, D-Conn., declared. “It’s about a company, a once iconic company, that somehow lost its way.”

Sen. Josh Hawley, R-Mo., blamed Calhoun, claiming that the man who became CEO in January 2020 was too focused on the bottom line.

“You are cutting corners, you are eliminating safety procedures, you are sticking it to your employees, you are cutting back jobs because you are trying to squeeze very piece of profit you can out of this company,” Hawley stated in a higher tone. “You are strip-mining Boeing.”

Hawley repeatedly cited Calhoun’s $32.8 million salary from last year and questioned why the CEO had not resigned.

“Senator, I’m going to see this through. I’m proud to have taken this position. I’m pleased of our safety record, and I’m proud of our Boeing employees,” said Calhoun, who has announced his resignation by the end of the year.

Hawley interrupted. “You’re proud of the safety record?” he asked, perplexed.

“I am proud of every action we have taken,” Calhoun said.

Senators grilled Calhoun on allegations that Boeing managers penalized employees who raised safety concerns. They asked the CEO if he had ever spoken with any whistleblowers. He said he hadn’t but agreed it was a nice idea.

The latest whistleblower, Sam Mohawk, a quality assurance investigator at Boeing’s 737 assembly facility outside Seattle, told the subcommittee that “nonconforming” parts — those that could be defective or not properly documented — could end up in 737 Max aircraft.

Mohawk alleged that Boeing suppressed evidence after the Federal Aviation Administration informed the business that it planned to inspect the factory in June 2023.

“Once Boeing received such a notice, it ordered the majority of the (nonconforming) parts that were being stored outside to be moved to another location,” Mohawk stated in the report. “Approximately 80% of the parts were moved to avoid the watchful eyes of the FAA inspectors.”

Mohawk stated that the parts, which included rudders, wing flaps, and other components necessary for aircraft control, were later returned or lost.

A Boeing spokeswoman stated that the firm received the subcommittee report late Monday night and is evaluating the claims.

The FAA stated that it would “thoroughly investigate” the allegations. A spokeswoman stated that the government has received more reports of safety issues from Boeing personnel since the January 5 rupture on the Alaska Airlines Max.

The 737 Max has a troublesome history. After Max jets crashed in Indonesia in 2018 and Ethiopia in 2019, killing 346 people each, the FAA and other agencies grounded the aircraft for more than a year and a half. The Justice Department is considering prosecuting Boeing for breaking the terms of a 2021 settlement over charges that the corporation misled regulators who authorized the plane.

Mohawk told the Senate hearing that the quantity of problematic parts has increased dramatically since production of the Max resumed following the incidents. He claimed that the increase prompted superiors to instruct him and other employees to “cancel” documents indicating that the parts were unsuitable for plane installation.

Following the mid-air burst of a plug covering an emergency exit on an Alaska Airlines plane in January, the FAA temporarily grounded certain Max flights. The agency and the National Transportation Safety Board began separate investigations into Boeing, which are still ongoing.

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Boeing | AP News Image

Boeing CEO Defends His Safety Record, Spars With Senators And Apologizes To Crash Victims’ Relatives

Calhoun stated that Boeing has responded to the Alaska tragedy by reducing production, encouraging employees to raise safety problems, shutting down assembly lines daily to allow workers to discuss safety, and appointing a former Navy admiral to conduct a quality review. Late last month, Boeing delivered an improvement plan requested by the FAA.

Calhoun defended the company’s safety culture, admitting it “is far from perfect.”

The drumbeat of bad news for Boeing has continued throughout the last week. The FAA said it was looking into how falsely documented titanium parts ended up in Boeing’s supply chain; the company revealed that fasteners were incorrectly installed on the fuselages of some jets, and federal officials examined “substantial” damage to a Southwest Airlines 737 Max following an unusual mid-flight control issue.

During the hearing, Howard McKenzie, Boeing’s top engineer, stated that the problem with the Southwest airliner, which he did not describe in detail, was limited to that plane.

Blumenthal first requested Calhoun’s appearance before the Senate subcommittee when another whistleblower, a Boeing quality engineer, claimed that manufacturing flaws were posing safety hazards on two of Boeing’s largest jets, the 787 Dreamliner and the 777. He stated that the corporation needed to explain why the public should believe in Boeing’s work.

Boeing denied the whistleblower’s assertions, claiming that comprehensive testing and inspections revealed none of the issues the engineer had foreseen.

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Boeing | AP News Image

Boeing CEO Defends His Safety Record, Spars With Senators And Apologizes To Crash Victims’ Relatives

Last month, the Justice Department found that Boeing breached a 2021 settlement that protected the firm from fraud charges for allegedly deceiving regulators who approved the 737 Max. According to a senior department official, Boeing failed to implement steps to detect and prevent future infractions of anti-fraud rules.

Prosecutors have until July 7 to decide what they will do next. Blumenthal claimed that there is “mounting evidence” that the firm should be penalized.

Families of the victims of the Max crashes have frequently urged the Justice Department to punish the business and its leaders. They want a federal judge in Texas to overturn the 2021 deferred-prosecution agreement or DPA — effectively a plea deal — that allowed Boeing to escape prosecution for fraud in connection with the Max.

Catherine Berthet, whose daughter Camille perished in the second disaster, stated outside the Capitol on Tuesday that despite having three years to improve their safety process, they failed to do so. “Now they have to be made accountable.”

SOURCE – (AP)

Kiara Grace is a staff writer at VORNews, a reputable online publication. Her writing focuses on technology trends, particularly in the realm of consumer electronics and software. With a keen eye for detail and a knack for breaking down complex topics, Kiara delivers insightful analyses that resonate with tech enthusiasts and casual readers alike. Her articles strike a balance between in-depth coverage and accessibility, making them a go-to resource for anyone seeking to stay informed about the latest innovations shaping our digital world.

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Boeing Case Puts A Spotlight On Plea Agreements Involving Corporate Defendants

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Following the deaths of 346 people in two airplane disasters, a $2.5 billion deal that allowed Boeing to avoid criminal prosecution failed to address concerns about the safety of the company’s aircraft.

Federal prosecutors accuse the business of failing to meet the terms of the 2021 settlement. Boeing has agreed to plead guilty to a felony fraud allegation under a new agreement with the Justice Department. The agency said Thursday it plans to file the detailed plea deal by mid-next week.

Boeing Case Puts A Spotlight On Plea Agreements Involving Corporate Defendants

According to corporate behavior experts, whether the current agreement has a greater long-term influence on safety than the previous settlement may depend on how much power is placed in the hands of an independent monitor designated to watch Boeing for three years. Prosecutors appointed such a monitor as a condition of the plea agreement, which also includes a fresh $243.6 million punishment from Boeing.

“Your real concern is preventing the loss of future lives in future crashes, and the monitor can have a greater impact on that than the amount of the fine,” said John Coffee, a Columbia University law professor who analyzes corporate governance and white-collar crime.

The official plea and punishment will be submitted to the Fort Worth, Texas US District Court. The submission will provide a more detailed description of how the compliance monitor will be selected and the scope of the monitor’s responsibilities. Already, the government appears to have backed down from a plan that would have given Boeing the most influence in selecting the watchdog.

Families of some of the passengers killed in the crashes have stated that they intend to protest the accord. They want a trial, not a plea deal, and believe Boeing should pay a $24 billion punishment. According to Paul Cassell, a lawyer for the families, relatives of crash fatalities should be able to nominate a monitor for the judge to appoint.

According to attendees in a June 30 briefing given by department officials to passengers’ relatives and lawyers, the Justice Department initially planned to select a monitor from a list of three nominees offered by Boeing and would request additional names if required.

The arrangement, which Boeing agreed to “in principle” a week later, said that the Justice Department would seek candidates via a public job posting on its website and then select one “with feedback from Boeing.” The specific scope of the company’s involvement was unknown.

Once the department and Boeing have decided, prosecutors will inform U.S. District Judge Reed O’Connor. If he does not object within 10 days, the appointment will go forward. According to the petition, the selected candidate must match the “specific qualifications” outlined in the posting as well as the department’s guidelines for appointing monitors in criminal cases.

The monitor will oversee Boeing’s adherence to the plea agreement during a three-year probation term in which the official will prepare “a confidential annual report for the government” and provide an executive summary to the court.

The employment of monitors in plea agreements with firms guilty of crimes indicates prosecutors’ unwillingness to file indictments and go to trial.

Brandon Garrett, a Duke University law professor who analyzes criminal cases involving corporations, says prosecutors have always been concerned that a criminal indictment may destroy a huge, publicly listed company, so they have favored out-of-court settlements in the most serious instances. That changed, he said, after the 2008 financial crisis, and there was fear that firms were being viewed as “too big to jail,” Garrett used as the title for his 2014 book.

The usefulness of plea deals and deferred prosecution agreements, which allow defendants to avoid criminal punishment, such as Boeing in 2021, has been questioned.

“Especially when you had companies repeatedly getting prosecuted, something needs to change — maybe these companies really should get a criminal record,” said Garrett. “That’s when we started to see … more large cases where companies would be convicted.”

Nadia Milleron, whose 24-year-old daughter, Samya Stumo, perished in the second of two tragic 737 Max crashes, believes the Boeing plea deal is far superior to the compensation negotiated three and a half years earlier. In January 2021, the Justice Department agreed not to prosecute Boeing for conspiracy to defraud the US government, a claim based on allegations that the corporation misled regulators who approved the 737 Max nearly a decade earlier.

Milleron and relatives of other crash victims, however, seek a trial that will reveal additional facts about discussions within Boeing leading up to, and even after, the incidents, which occurred in Indonesia in 2018 and Ethiopia in 2019.

The Justice Department looked to be dropping the 2021 charge until this January when a panel covering an unused emergency escape burst off a Max plane during an Alaska Airlines flight. The Federal Aviation Administration strengthened its oversight, and the agency’s chief stated that Boeing’s manufacturing issues “don’t seem to be getting resolved.”

The Justice Department defends its choice to seek a plea deal by claiming it carries the most severe sentence allowed under the charges against Boeing.

“We should be asking whether these prosecutions are working and what can be done to make them more effective,” according to Garrett. He urged the judge to actively monitor Boeing to ensure it complies with the new agreement after violating the previous one.

Coffee, a Columbia law professor, believes that a robust and independent monitor will be critical in determining if the agreement deters Boeing from future infractions.

“Companies fear a free agent roaming around in their files,” he told me. “On the other hand, if there isn’t some ability for the monitor to directly go to the court and say ‘They are not living up to the terms of the agreement,’ you have an ineffective monitor.”

Boeing Case Puts A Spotlight On Plea Agreements Involving Corporate Defendants

In one prominent instance, prosecutors prevented a federal judge in New York from disclosing a monitor’s report on HSBC, a London-based bank that went into a deferred prosecution deal on charges that it failed to prevent a Mexican drug cartel from laundering money.

“I’m not saying we shouldn’t have deferred prosecution agreements, but they tend to be negotiated to be strongly in the interests of the defendant,” according to him.

The judge in the Boeing case has suggested that after the Justice Department files the specifics of the plea agreement, he will give victims’ relatives seven days to file objections. The government and Boeing will have 14 days to reply.

The Justice Department’s decision not to pursue Boeing in January 2021 coincided with the end of the Trump administration. US Sentencing Commission data shows that federal corporate prosecutions increased marginally in 2022 and 2023.

We are in an election year, so we will be looking to see how that focus by the Department of Justice plays out after the election in November, and whether the focus on corporate crime remains the same,” said Kya Henley, a former public defender in Maryland who now represents companies and individuals in white-collar cases. “Everyone gets to set their agenda.”

SOURCE | AP

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Fandango Founder, Michael Cline Identified As Man Who Fell To Death From New York City Hotel

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Michael Cline | CNN Image

J. Michael Cline, the founder of movie ticket company Fandango, died after falling from a New York City hotel on Tuesday, a law enforcement official told CNN.

According to the New York Police Department, the 64-year-old was discovered at 10 a.m. on Tuesday with injuries consistent with falling from an elevated height from The Kimberly Hotel, a luxury boutique hotel in midtown Manhattan. Investigators suspect he jumped from the hotel’s 20th floor. He was declared dead shortly after that by emergency medical responders.

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Michael Cline | CNN Image

Fandango Founder, Michael Cline Identified As Man Who Fell To Death From New York City Hotel

According to LinkedIn, Cline established Fandango in 1999 and continued to work there until 2011. NBCUniversal now owns the ticket company.

Cline was a founding and managing partner of Accretive Private Equity and executive chairman of Juxtapose Venture Fund when he died. He had also created several more enterprises.

Cline was chairman of the National Fish and Wildlife Foundation, where he talked about the significance of conservation efforts in 2020.

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Michael Cline | Page Six Image

Fandango Founder, Michael Cline Identified As Man Who Fell To Death From New York City Hotel

Michael was married and father of six children. According to the HBS alumni association website, he obtained his bachelor’s degree from Cornell University and his MBA from Harvard Business School.

SOURCE | CNN

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Wipro’s ADR fell 7% in Pre-Market trading as Q1 Revenue Growth Disappointed.

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(VOR News) – The American depositary receipts (ADR) of the information technology business Wipro experienced a decline of over seven percent during the pre-market trading session that occurred today.

The Wipro trading session showed this phenomenon.

This occurred as a result of the general public’s disappointment with the company’s first quarter’s operations.

The company’s sales increased by minus one percent when measured in terms of constant currency, which was a deviation from the anticipated growth of either neutral or positive. It was anticipated that both of these outcomes would transpire.

In order to assess the development, a constant currency analysis was implemented. It was anticipated that these two incidents would occur, and so they did.

In terms of CC, Wipro has experienced a decline in revenue growth over the past six quarters. This is in stark contrast to the growth that was observed in the quarters that preceded it.

To be more precise, the organization was quoted as predicting that the income generated by its IT Services business sector would be between $2,600 million and $2,652 million at some future date.

It is more precise to state it this way. This estimate is situated in the middle of the range within that range. Nevertheless, when this is defined in terms of constant currency conditions, it is comparable to sequential guidance that spans from a negative 1.0% to a positive 1.0%.

Assume that currency conditions remain the same for Wipro.

This is due to the fact that the conditions associated with the money are consistently consistent. Wipro’s earnings before interest and taxes (EBITDA) for the Wipro first quarter of fiscal year 25 were Rs 3,625 crore, which were higher than those of the previous quarter. This is a 1.8% increase from the earnings of the previous quarter.

This indicates a 1.8% increase in earnings when contrasted with the results of the previous quarter.

The company’s operating margin, which increased by 47 basis points (bps) from the previous quarter to the subsequent quarter in the first quarter of fiscal year 25, reached 16.5%.

This represents a substantial improvement in comparison to the prior quarter. Improvements in the operating margin also occurred during this period. The occurrence of this transpired simultaneously.

This was the most significant Wipro victory we had achieved in the past few years, and we achieved it by successfully securing an additional quarter of all large deal commitments that exceeded one billion dollars.

This was the most significant victory that we had achieved in the past few years. Our most significant accounts have continued to expand throughout the Americas, and this expansion has been accompanied by growth in the consumer, BFSI, and SMU sectors at the same time.

Wipro’s expansion has been ongoing for quite some time.

We are delighted with the momentum that we have established in all industries and sectors during the first quarter.

As we Wipro transition into the second quarter, we would like to convey our satisfaction with this momentum. This momentum has enabled us to advance with a greater sense of confidence, thereby enabling us to keep moving forward.

We are pleased with the momentum we have established and the potential to enhance our performance in terms of growth and reservations that will generate a profit. We are delighted with the momentum that we have established.

Wipro’s AI360 strategy will be further developed as the company continues to prepare its personnel for an Al-first future, according to Srini Pallia, Management Director and Chief Executive Officer.

The corporation will continue to broaden its AI360 strategy for the foreseeable future as we continue to develop it. “While we are doing this, we are also thinking about the future.”

SOURCE: UTB

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