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Boeing CEO to testify before Senate panel: What to expect

Outgoing Boeing (BA) CEO Dave Calhoun will testify before a US Senate panel on June 18 to address safety concerns about the Boeing 737 MAX.

Yahoo Finance Reporter Pras Subramanian joins Catalysts to discuss Boeing's latest development, what to expect from the congressional testimony, and what it means for the company moving forward.

Read more about the DOJ's investigation of Boeing here.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Nicholas Jacobino

Video transcript

Boeing is back in the hot seat this week.

Outgoing Ceo Dave Calhoun is testifying before a senate panel on Tuesday where he's expected to answer questions about whistleblower allegations and quality control for aircraft.

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You find it pro superman and joins us with the details on this and more pro great to have you here.

Talk to me about what we can anticipate before this uh test testifying for our Ceo Dave Calhoun tomorrow.

What can we anticipate from that?

Yeah, you know, so basically those are the two main topics, the whistle blowers safety and the quality control since Post Alaska Airlines blowout situation in January.

So we're gonna kind of like hear what Callan is saying that they might be up to these days in terms of addressing those two issues.

Obviously, whisper safety comp came up in the last two incidents recently and quality control is a big deal there especially when in light of the 787 Dreamliner, uh more allegations about that plane.

But I think the big question here is about the Boeing's deferred prosecution agreement or basically, it's like a probationary type of agreement that that they made with the Doj about how they were able to sort of defer some prosecution there based on what happened with the max.

Uh a couple of few years back now with the Alaska Airline situation, the journal had a story recently about how the DOJ was talking to families about, hey, what are you doing here in terms of going after Boeing in a more aggressive manner?

Basically, if the doj does go after Boeing and say, hey, you know what, you guys committed fraud here from a compliance safety issue.

That could mean they could lose their government contracts open to more lawsuits, et cetera.

So it's a big deal for them.

Uh, come July 7th when the DOJ has to decide what they're going to do.

You know, Ross.

It's so interesting when you take a look and I know you been covering this now for quite some time, the analyst reaction to this.

They still don't seem too concerned with all this uncertainty.

Any idea just from the notes that you have read over the last several months.

Why that is and why there isn't more of, I guess some angst or concern about what exactly the next several months is going to look.

Maybe there is and they're just taking much more of that longer term view.

Yeah.

You know, I think in the near term there's concern about how can they raise money, right.

Their debt rating goes, I think it was down a little bit recently and that makes it more and more expensive to kind of finance these large operations, building their planes.

That of course, now are sort of delus are slowing.

They're not getting that much revenue in, uh, because of the fact of the, of the compliance issues with, uh FAA.

But, uh, I think you raise a good point about why buildings are getting slammed by analysts.

And I think the big question is we probably, I think we discussed before is that they're the only game in town.

They're the only big major uh uh play maker we have in this country, both from commercial but also defense industry.

The government can't put Boeing out of business.

That's the whole like the crux of the argument.

So, hey, Boeing Stock not doing too great.

Maybe now is the time to buy sort of what analysts are saying because of that.

But for me, that doesn't, as an investor doesn't make you confident in the company.

Oh, they're not gonna go down because the government says they can't, I mean, like that's the question.

I think investors are saying, hey, do I really wanna be invested in this company if that's the case?

But hey, it's, if it's not going to go away, maybe that's a good time to buy.