Boeing CEO addresses public on 737 MAX

Boeing executives are facing shareholders in public for the first time Monday since two fatal crashes led to the grounding of the latest version of its most popular aircraft, the 737 Max.

CEO Dennis Muilenburg, who is set to speak at Boeing’s annual shareholder meeting in Chicago, said in prepared remarks that the aerospace giant is making “steady progress” in implementing a software update that will enable the Federal Aviation Administration to certify the aircraft as safe, according to a statement he read at the meeting.

Almost 90 percent of the more than 50 airline and other operators have “experienced the software update themselves” during a simulator session, Muilenburg said. Test pilots have taken 146 flights in 737 Max aircraft totaling 246 hours of airtime with the new software, he noted.

Follow along for updates as Muilenburg addresses the public.

Safety “for everyone”

One shareholder asked what Boeing was doing to make safety processes more robust. “You don’t have to have 300-plus people die every time to find out something is unreliable,” the shareholder said.

Muilenburg said media reports that Boeing may have “rushed the 737 Max to market” were “simply is not true. It was a six-year development , 1600 test-flights of the airplane, 3700 flight hours of development on the Max so it was thorough and it was disciplined.”

Boeing is first offering standard computer training packages on the new 737 Max software “for everyone” and “then where it makes sense, augmentation with simulator training,” Muilenburg said in response to a question from a retired Air Force Lt. Colonel who also said he owned Southwest shares.

CEO has no plans to leave

When a reporter asked him if he’d considered resigning, Muilenburg said he intends to stay, focusing on “safety and quality and integrity.”

“I am strongly vested in that my clear intent is to continue to lead on safety and quality and integrity,” he said. “Its important to stress that. We deeply regret what happened with these accidents. It gets to the core of our company”

Earlier, a shareholder proposal to remove Muilenburg from his position as chairman of the board failed, with less than 40 percent of shareholders supporting the proposal.

It’s far from the first time that question has been posed. On an investor call last week, analysts asked if the outcome of the 737 Max and the ability to restore public trust were key to keeping both roles. Muilenburg said he believes in keeping the roles combined.

“I have daily communications with the board, both in my chairman role and in my CEO role,” Muilenburg said on the call. “We think that is the right, most effective structure for our company. And I think that’s, again, showing it to be the case even in the midst of this challenging situation.”

$260 million less revenue

Investment firm Raymond James estimates the 737 Max grounding will reduce revenue at Southwest Airlines, the largest U.S. user with 34 of the jets, by $260 million in the first quarter, while American Airlines will take an estimated $185 million hit in the second quarter.

American Airlines flies 24 of the 737 MAX jets, while United Airlines has 14. Raymond Jones also expects the grounding to result in reduced seating capacity during the summer, which can drive up airfare.

Safety “not optional”

“We don’t make safety features optional,” Muilenburg said in his prepared remarks. “Safety has been and always will be our top priority, and every one of our airplanes includes all of the safety features necessary for safe flight.”

4 whistleblower calls

Earlier on Monday, CBS News confirmed that the Federal Aviation Administration has received at least four calls from potential Boeing employee whistleblowers about issues with the company’s new 737 Max jetliner.

American Airlines pilots warned that Boeing draft training proposals don’t go far enough to address their concerns about training, according to written comments submitted to FAA and seen by Reuters, the news organization reported.

The Wall Street Journal on Sunday reported that Boeing didn’t tell Southwest Airlines, the biggest U.S. operator of 737 models, and other carriers about a safety feature found on earlier versions of the aircraft that warns pilots about malfunctioning sensors had been deactivated.

$1 billion in fixes

Boeing last week said costs tied to the global grounding of its 737 Max plane jumped $1 billion in the first quarter and withdrew its 2019 forecast as it works to get the aircraft re-certified.

The planemaker is trying to stem the damage from a halt in deliveries of the 737 Max after its grounding following two crashes that resulted in the deaths of 346 people — the March crash of an Ethiopian Airlines 737 Max flight and the October crash of a Lion Air flight.

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