Boeing Co. (BA) - Get Report shares traded lower Monday as the company reacted to a New York Times report focused on production and oversight at the planemaker's South Carolina factory that produces its long-haul 787 Dreamliner.
The Times cited hundreds of internal emails, federal records and corporate documents in a report that suggested Boeing's ten-year-old South Carolina plant has been "plagued by shoddy production" and "weak oversight" that could raise questions over the safety of the Dreamliner and the company's broader culture in the wake of two fatal accidents for its 737 MAX 8 over the past six months. The Times report said Boeing pressured employees into working more quickly to avoid production delays while "at times ignoring issues raised" by those closest to the Dreamliner's assembly.
Boeing, through its South Carolina site leader Brad Zaback, said the Time report "paints a skewed and inaccurate picture of the program and of our team" and features "distorted information, rehashing old stories and rumors that have long ago been put to rest."
Boeing shares were down 0.5% to $378.01 on Monday, a move that would leave the stock down about 11% from the level it traded at prior to the March 10 Ethiopian Airlines Flight 302 crash.
Late last week, the U.S. Federal Aviation Administration said nine international aviation regulators would join a comprehensive review of the 737 MAX that will begin on April 29.
Boeing said earlier this month that the preliminary report into the cause of Ethiopian Airlines Flight 302's fatal crash, which killed all 157 passengers on board on March 11, as well as the Lion Air 610 disaster in Indonesia in early October, which took the lives of 189 people, were caused by activation of the Maneuvering Characteristics Augmentation System, or MCAS, in response to "erroneous angle of attack information" from a broken sensor.
Boeing vowed to correct the cause of the tragic incidents while recognizing the "devastation of the families and friends of the loved ones who perished."
The FAA said it would "evaluate aspects of the 737 MAX automated flight control system, including its design and pilots' interaction with the system, to determine its compliance with all applicable regulations and to identify future enhancements that might be needed."
The U.S. Transportation Department is looking into the FAA's certification of the 737 MAX, and reports have suggested the Justice Department is also investigation the Administration's oversight of both Boeing and aircraft certification processes.
More than 300 of Boeing's flagship MAX aircraft have been grounded by regulators around the world since the March 10 disaster, with the world's biggest planemaker facing the potential loss of a a $6 billion order after Indonesia's national airline moved to cancel or amend a previous agreement for the controversial aircraft.