The Boeing Board of Directors, facing a class-action lawsuit from the families of the Boeing crash victims, and under scrutiny by way of the Justice Department’s ongoing criminal investigation, just chose a classic “Circle The Wagons” strategy to manage the mess bequeathed to them by Dennis Muilenburg.  Conclusion – the Boeing story just got worse

Because corporate law allows it, the board has chosen two of the ultimate insiders, David Calhoun and Larry Kellner both who have been Board members and close Muilenburg associates for more than ten years, to manage the company going forward.

And with this stroke, seemingly without an objection raised by anyone, GONE is the opportunity for fresh eyes to examine the records and fresh ears to hear the accounts of associates as to what REALLY went on. Rather, the moat is full of crocs, the drawbridge is up, and the Board has effectively kept any new eyes, ears or noses “out of the tent” for the foreseeable future.

Calhoun, the former head of GE’s jet engine manufacturing business has been named as the new CEO and Kellner the former CEO of Continental Airlines will take on the Chairman of the Board role.

Some key points:

• Both of these gentlemen would rightfully be regarded as sophisticated, aerospace industry executives.
• Both have been on the Board for more than 10 years, meaning they were present and at Muilenburg’s side through much of the Max certification process when Boeing virtually replaced the F.A.A. to speed up the approval process.
• Prior to joining the BA board, Calhoun ran GE’s jet engine business which would become the supplier of Max engines.
• Nobody would know better than Mr. Calhoun that because they were larger, heavier and more powerful than previous 737 engines, and also had to be attached to the wings at a different location than previous 737 engines, that those GE engines were chief culprits of the Max nose rising on its own in various test flights in the first place, an aviation no-no, if ever there was one!
• The engines are also the primary factor that led to BA’s surreptitious decision to add the MCAS software to the mix but remove it from the pilot’s manual in order to “fool” pilots into thinking they were flying “just another 737” and thus avoid any calls for pilot training that might have compromised their delivery deadlines and postponed their ability to convert the enormous backlog to “revenue/earnings.”

It would be a real stretch to accept that Mr. Calhoun had no knowledge of, or participation in decisions around these matters.

Likewise, Mr. Kellner is an industry insider having been CEO of Continental Airlines prior to joining the BA Board. They stood at Muilenburg”s side through most of the Max certification process and initial sales and and building of the huge backlog. They praised him to the skies until his recent unceremonious firing.

Now they are the buffer that stands between the Board’s potential civil and criminal liabilities as Muilenburg’s enablers, and those seeking the real culprits. Of course, neither Calhoun nor Kellner nor any other current member of the Board wants anyone else sticking their nose in there with the authority to poke around, examine records and have meetings they would not be invited to. The question is should THOSE people now be running the Briar Patch/ Hen House?

It is clearly a matter of corporate law that permits the Board to vote in whoever they want to occupy those positions. However, considering the dire circumstances surrounding the Boeing scandal, the F.A.A., and House/Senate Transportation Committees once again been complicit with Boeing criminality in not raising could have at least raised a ruckus and issued serious concerns about the fact that in essence, nothing has changed. It is essentially the same team!

The concern arises partially from the weak performance of the new head of the F.A.A. Stephen Dickson, when he recently testified in D.C. before U.S.Representative Peter DeFazio’s Transportation Committee. When the subject of a whistle-blower, who had written to Dickson three times in the four months he’d been in charge of the F.A.A. came up and DeFazio wanted to know why he (Dickson) had not responded to meet or speak with the white blower, Dickson sounded just like Muilenburg had in his testimony, ie: humming and hawing and denial until DeFazio had enough and demanded a commitment from him to meet the whistle blower post haste! As far as I know, we have yet to hear about the resolution of that matter.

What we do know is that the Boeing Board was well prepared for the decision to fire Muilenburg and wasted no time in announcing his successor, a tag-team combo of “keep-it-in-the-house” Board members, before anybody else could get their noses in there. The fact that they were allowed to do so verges on incomprehensible and gets to the heart of the conundrum about how debacles become institutionalized in their execution?

Consider Volkswagen’s long-lasting emission deception, Wells Fargo’s institutionalized fee cheating of thousands of elderly customers, The Enron fraud, the thousands of murder’s committed by the Sackler family’s evil opioid empire, the hundreds of thousands of sexual assaults committed by officials of the Catholic Church! Each take on a life of their own and build steam through their collective might until something happens to expose the blight! What Goes Around Comes Around as sure as night follows day, but depending on how clever, intelligent and willing to lie the players are, it can take a long time to see those stars.

In all cases they involve the collective intelligence and deception of many people, across generations to deceive and plunder for “their” corrupted cabal at the expense of whoever happens onto their radar screen.

Just as there are significant differences in how long individual or small teams of criminals such as money managers employing insider trading, or Ponzi schemes, or drug dealers controlling certain neighborhoods, or rogue Police officers taking bribes for gun licenses, or the purveyors of child pornography, etc, the larger, more clever and intelligent and better coordinated the teams become, the longer they may be able to stay that, “One step ahead of the judge!”

In Boeing’s case it was starting to look like the “jig was up!” But Nope! The most expensive, corporate legal team ever assembled did their job and the jig goes on for some additional and impossible to define period of time. The key was keeping the Board’s control intact to fight another day, without any outside additions and their prying eyes or private meetings with employees to expose what’s really gone on.

I can hear those guys say, “That would not be good! It might mess up our current narrative about faulty MCAS and badly trained pilots and hurt our chances with the upcoming lawsuits and Governmental criminal investigations.

Sure Muilenburg had to be removed to make it look like a big change had occurred, where none had actually happened. He’d lost all credibility anyway and has the most to lose from lawsuits aimed at the Board and possible criminal liability. Also the comfort of a cool $100million or so tucked away for a rainy day. So passing on control to his two closest allies makes total sense. and actually adds up to ZERO change! They are also the most experienced aerospace pros on the board which the lawyers are figuring will at least give them some daylight to come up with their next leg of strategy.

So in essence, we have just witnessed what may be the greatest example in American corporate history of a legal teams ability to “change the narrative” and live to fight another day. We thought we were going to see management draw the “Go Directly To Jail Card! Do Not Pass Go, Do not Collect $200.00!” Instead they received the “Advance To Go Card! Collect $200.”

What it means to investors is that the Boeing uncertainty gets played out longer. Most people no doubt will think it’s all been solved with this management shakeup so the stock may recover to some degree. But each week that goes by increases likelihood that there just is no fix and the 737 Max never gets certified,

At this point, that is an extreme view that would leave Boeing with 700 carcasses on the ground to dispose of before finally getting back to the drawing board to start over from scratch, as many would argue they should have done in the first place. It would still be unlikely that BA goes away, but very likely that it recovers from much lower levels. The next three or four months should clarify a great deal.