4 things Boeing shareholders want to see at annual meeting

All eyes are on Boeing's (BA) annual shareholder meeting as a vote will be held to determine whether the company's embattled CEO, Dave Calhoun, will be reelected to the board. Boeing shareholder and Gabelli Funds Portfolio Manager Tony Bancroft joins Catalysts to break down what shareholders want to see from today's big meeting.

Bancroft lays out three key areas investors want to see prioritized after leadership decisions: a finalized Spirit deal, FAA authorization for increased 737 MAX production, and a better handle on the 787 supply chain.

Calhoun will step down as CEO at the end of the year, and despite mounting criticism, Bancroft says he believes he's done "a great job." "He took over in the midst of two mishaps, and then obviously, on top of that, COVID hit — the worst downturn in commercial air travel in history. And he essentially brought Boeing back from about zero production of the 737 MAX to 38 a month. That's a large increase," he explains.

He says that a new CEO doesn't necessarily have to be an insider but should possess a technical background: "Boeing at some point is going to have to design a new plane...I think someone who has that understanding and background to work with engineers could be heavily weighted for the decision."

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This post was written by Melanie Riehl

Video transcript

Boeing's annual shareholder meeting is set to kick off 11 a.m. Eastern time today.

One of the big questions being voted on is whether an embattled Ceo Dave Calhoun, who will step down by the end of the year, whether or not he's going to be re elected to the company's board for more on this and what ultimately shareholders want to see happen at Boeing or prioritize here for Boeing.

We wanna bring in Tony Bancroft, the Belly Funds portfolio manager and Boeing shareholder.

I it's great to see you, Tony.

So talk to me just about what you think Boeing should prioritize and what you're hoping to learn at today's shareholder meeting.

Hey, Shawna, uh great to be here.

Thank you.

Uh You know, I think for priority uh my focus as a shareholder in our uh Gabelli commercial airspace and F uh GC ad ETF I think would be number one.

I, I mean, I know they've got to get through the, the um uh the technicalities of just going through the uh the annual meeting and uh voting on um on voting on directors and, and uh and uh CEO pay.

But to me, the focus is, they've got to get a, uh, they've got to announce and in place in a new CEO now that they've announced that the O Calhoun is leaving, uh, you know, they, they've got to get the Spirit deal, uh, done with and, uh, put in the books.

Uh, thirdly they've got to get the 737 max, um, uh, authorization increased production with the fa, uh, increase to above 38.

And then lastly, they, they've got to get the 787 deliveries production and, you know, uh and supply chain uh squared away and, and that's what I'd be looking for in the sort of the, the near term.

So I'm curious, Tony, uh you obviously know that shareholders are voting today on whether outgoing Ceo Dave Calhoun should remain on the board.

What would your take on that be, you know, iii I refer that to our proxy voting committee.

Uh But me personally, I, you know, I, I have no, no problem uh with Ceo Calhoun uh mad, I think he's, you know, actually I've done a great job, you know, just remember he took over in the midst of, of uh two mishaps.

Um And then obviously on top of that, uh COVID hit the worst downturn in uh commercial air travel in history and, and he essentially brought Boeing back from about zero production of a 737 max to 38 a month.

That's a, you know, that's a large increase and he did a, he did a pretty good job.

Um So overall, I have no issues with the Ceo Calhoun.

Who do you think Boeing should consider or, or when you talk about what that past experience should be?

Who do you think some of those not, not naming specific names, but talking about the possible success or just what that conversation looks like?

Yeah, Sean, I think it's, it's probably gotta be, someone doesn't need to be an insider.

It could be, but it's somebody needs to have a, a technical background.

Um, you know, you know, Boeing at some point is going to have to design a new plane.

There will come a time when, you know, technology and efficiency uh is going to uh out, outrun the current uh the current um production aircraft.

And I think someone who has that understanding and background to work with engineers uh is probably, is probably a pretty uh it can be heavily weighted for the decision, at least, at least in my opinion.

And I think most probably uh investors are probably thinking the same way.

Well, Tony, let's just talk about the obvious here.

Boeing's had a really rough couple of months here.

I mean, my friends, whenever they see a plane issue in the news, they just assume that it's Boeing.

How bad is that for the stock?

And would that issue for them, the safety issues ever change your mind on Boeing?

Yeah.

You know, you know, it's a good point, Maddie.

I think the reality is that Boeing has, has, has partially lost the narrative of, of, of sort of the reality of what's going on.

You know, right now there's multiple 737 max aircraft launching and safely recovering all, all around the world.

And, you know, uh just statistically speaking, the fa uh fleet is the safest fleet in the world and probably the safest uh you know, form of public transportation in history.

We haven't had a crash related fatality since 2009 of 15 years.

That's about 10 to 12 billion passengers traveling safe safely in under FAA watch.

And 51% of that fleet of the FAA fleet are Boeing aircraft.

So they're by far the mass majority of, of us driving the safety in this country.

But, you know, with that being said, you know, sometimes perception is reality and I think the reality is Boeing is just gonna have to just keep blocking and tackling, moving forward and, um, you know, producing safe aircraft which they have done for, you know, last uh multiple, multiple decades and they'll continue to do uh going forward to www when we talk about the future of Boeing, what exactly that's going to look like the potential acquisition interest here that we have seen in spirit AO systems.

I'm curious from a shareholder perspective.

Does that increase the value here for shareholders?

Why or why not?

And then there have been some issues raised just about the, the impact that this is ultimately going to have on the industrial industry and the defense industry at large.

How should investors be looking at that?

I, I think in the near term, it's gonna cause volatility.

Obviously, it's gonna be a big cost, you know, Boeing is gonna, is gonna have to pay uh pay for, for spirit.

Uh Obviously, they have to get figured out with the Airbus of how they're going to uh deal with the two production plans um that, that produce uh you know, Airbus, Airbus um components.

Um And then after that, you know, at a run rate is probably gonna save Boeing about a billion dollars a year in uh in cost by, by owning these businesses.

And I, I think more importantly, you know, it's, it's gonna own the culture and it's sort of gonna be one team, one fight.

Uh you know, fuselage is the critical uh go stores component for an aircraft.

You, you're not gonna get two fil suppliers.

And I think it's just, you know, it's just, it's, I think it's pretty apparent that uh the OEM who's producing the aircraft needs to own needs to own that, that component of the aircraft, it's just so critical as far as production supply chain, you know, you name it.

So I think in the long run this is gonna be very beneficial to Boeing and uh, it's, it's just the right thing to do.